Supreme Court: health care mandate is constitutional as a tax.

• Author: Schreiber, Sally P.

As this issue went to press, the U.S. Supreme Court declared the mandate in Sec. 5000A, requiring U.S. citizens and legal residents to maintain minimum essential health coverage, to he a permissible exercise of Congress's taxing powers under the Constitution (National Federation of Independent Business v. Sebelius, Sup. Ct. Dkt. No. 11-393 (U.S. 6/28/12)).

The court, in a 54 decision, held that the payments required of individuals who do not maintain minimum health coverage under the "individual mandate" were not a penalty, but are a tax and are allowed under Congress's power to tax in Article 1 of the Constitution. This means they are constitutional, even though a majority of the justices found that the individual mandate went beyond Congress's powers under the Commerce Clause.

The entire act was upheld, although the Court did limitthe federal government's power to terminate states' Medicaid funds. The Court held that the Medicaid portion of the Patient Protection and Affordable Care Act P.L. 111-148 (the Patient Protection Act), which requires states to accept an enormous expansion in the number of people they cover under the program or face a cut of all Medicaid funds, was unconstitutional as enacted, but found that a severability clause in the law allowed the Medicaid provision to go forward without the threat of the loss of all Medicaid funds.

Shared Responsibility Payment is aTax

Although the individual mandate's "shared responsibility payment" in Sec. 5000A is labeled a penalty, not a tax, the Court held it is a tax for purposes of determining its constitutionality and ultimately upheld it as a valid exercise of Congress's power to tax.

Chief Justice John Roberts concluded that the individual mandate must be construed as imposing a tax on those who do not have health insurance, if such a construction is reasonable, because "every reasonable construction must be resorted to, in order to save a statute from unconstitutionality" (Hooper v. California, 155 U.S. 648 (1895)).

The Court held that the individual mandate was within Congress's power under the Constitution's Taxing Clause. The Court concluded that the individual mandate is not a legal command to buy insurance, but rather a tax on the choice to forgo buying insurance. It does not apply to people who are not required to file income tax returns. The fact that the Patient Protection Act calls it a penalty instead of a tax was not controlling, the Court said.

Provisions in the...