Obamacare was passed by Congress on March 21, 2010, and signed into federal law by President Barack Obama on March 23. This law furthers the process of socializing the United States health care system, which began with Medicare. The centerpiece of Obamacare is the individual mandate, a provision that makes it mandatory for every citizen to purchase private health insurance, which was unprecedented in American history.
Through legislative mandates, Obamacare requires private citizens to purchase health insurance, involuntarily fund abortions, and pay for sex offenders to use Viagra under the threat of legal sanctions if they do not. The new law imposes penalties that will increase to 2.5% of one's income if he fails to purchase government-approved health insurance.
Monthly payments for Obamacare are massive, roughly 12-15% of an individual's annual salary. If an individual fails to purchase coverage and does not meet the exceptions or the religious exemption, then a financial penalty will be assessed for non-indigent individuals. An exemption is available if more than 8% of the individual's household income would be required to pay for the cheapest available coverage.
Fines were to be paid to the HHA of the State in which the person resides. That agency also may establish a procedure to waive the penalty if the penalty poses a hardship. Each State would determine appropriate mechanisms to enforce the requirement that individuals be enrolled.
The law that was enacted replaced the state-based approach with a direct penalty to be paid to the United States.
Basis for Legal Challenges
There have been several grounds for challenging the Cosntitutionality of the bill. Obamacare includes an "individual responsibility requirement" compelling persons to buy health insurance or pay a penalty. The one legal justification for this requirement by Congress is the Commerce Clause:
|“||The individual responsibility requirement provided for in this section ... is commercial and economic in nature, and substantially affects interstate commerce, as a result of the effects described in paragraph (2). ... [Paragraph (2) states,] The requirement regulates activity that is commercial and economic in nature: economic and financial decisions about how and when health care is paid for, and when health insurance is purchased.||”|
Apparently uncertain that this would withstand legal scrutiny as a valid exercise of Commerce Clause authority, on March 21 (the same day as passage) the Joint Committee on Taxation released a 157-page "technical explanation" of the bill. This "explanation" grounded the justification for the bill in the tax authority of Congress, and nowhere mentioned commerce. As Professor Randy Barnett explained in an article on April 29, 2010 in the Wall Street Journal:
|“||The word "commerce" appeared nowhere. Instead, the personal mandate is dubbed an "Excise Tax on Individuals Without Essential Health Benefits Coverage." But while the enacted bill does impose excise taxes on "high cost," employer-sponsored insurance plans and "indoor tanning services," the statute never describes the regulatory "penalty" it imposes for violating the mandate as an "excise tax." It is expressly called a "penalty."||”|
Professor Barnett then explained that in Bailey v. Drexel Furniture (1922), "the Supreme Court struck down such a penalty saying, 'there comes a time in the extension of the penalizing features of the so-called tax when it loses its character as such and becomes a mere penalty with the characteristics of regulation and punishment.'" A subsequent Supreme Court decision, U.S. v. Kahriger (1953), upheld a punitive tax on gambling based on an express statement in the law that Congress was exercising its power to tax. No such statement exists in Obamacare. See also Sonzinsky v. U.S. (1937) ("Inquiry into the hidden motives which may move Congress to exercise a power constitutionally conferred upon it is beyond the competency of courts."). Professor Barnett noted that the penalty is not enforced as a tax in a customary manner, providing further evidence that Obamacare is based on the Commerce Clause and not on any taxing authority.
Requiring Americans to buy insurance "would invite unbridled exercise of federal police powers," wrote Judge Hudson, a George W. Bush appointee in the Eastern District of Virginia. The federal judge also wrote:
|“||At its core, this dispute is not simply about regulating the business of insurance—or crafting a scheme of universal health insurance coverage—it's about an individual's right to choose to participate.||”|
It has also been pointed out that because the penalty applies to inactivity, it is beyond the powers authorized by the Sixteenth Amendment.
Since the federal judge decided the entire healthcare reform bill law was unconstitutional, states such as Alaska have decided not to implement the mandated reforms. This prompted Obama's Justice Department to appeal to Judge Vinson by claiming that states cannot ignore the new health care law while his ruling is being appealed.
- Epic new spending and taxes, pricier insurance, rationed care, dishonest accounting: The Pelosi health bill has it all. Nancy Pelosi's New Health-Care Bill, The Wall Street Journal, November 01, 2009.
- President Obama, Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi rammed Obamacare down the throats of an unwilling American public. Half a year removed from the unprecedented legislative chicanery and backroom dealing that characterized the bill's passage, much more is known about the bill than when it was passed into law. Examiner Editorial: Obamacare is even worse than critics thought, Washington Examiner, September 22, 2010.
- http://wyden.senate.gov/issues/Healthy%20Americans%20Act/HAA_Section_by_Section.pdf (Link doesn't work.)
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- Alaska Governor Refuses to Enact 'Obamacare', Fox News, February 17, 2011