Thursday, June 28, 2012

US Supreme Court Upholds Obamacare Indivisual Mandate as "Tax"

Nancy Pelosi gushed they "made history" when the Congress passed the Affordable Care Act, aka "Obamacare".

Sure. As if it was a good history.

Today, SCOTUS (Supreme Court of the United States) ruled 5 to 4 with Chief Justice Roberts siding with the liberal judges in stating that "Obamacare"'s mandate that forces individuals to buy health insurance or face penalty is constitutional, but as a "tax". So the pathetic performance by Obama's Solicitor General in front of the Supreme Court didn't make a difference. Too bad.

Mr. Obama and his administration, and his party have been saying it is not a tax, but SCOTUS says it is. Obama's word on the SCOTUS decision? "Let's move forward..." Not a word about "tax".

The US stock market tanked on the news of the decision. Right now, tech-heavy Nasdaq is down 1.9%, Dow down 1.2%, S&P down 1.2%. The stock market, or what's left of it after incessant intervention and manipulation from the central bank, sees it correctly, for today, that it is a tax burden - the last thing that the economy needs right now.

Washington Post is a handy calculator to assess the impact on your household budget.

Using the calculator, if you have no insurance, 2 people in the household, annual adjusted gross income of $20,000 (barely above the federal poverty level), and you are married, you may be able to buy insurance in the federally assisted state insurance exchange for $800, or 4% of your gross income. If you do not buy the insurance, you will get penalized and required to pay the maximum fine of $1,390.

If your adjusted gross income is $40,000 (national average), then the cost of insurance at the insurance exchange will jump to $3,800, or 9.5% of your adjusted gross income. If you don't buy the insurance, you will be penalized with the same $1,390 fine.

If your adjusted gross income is $60,000, the cost of insurance at the insurance exchange will be $5,700, or 9.5% of your adjusted gross income. Penalty will be the same as in the previous two cases, at $1,390.

SCOTUS has decided it's all within the right of the Congress to tax citizens, as long as this Individual Mandate is a "tax".

GOP House Majority Leader Eric Cantor says a vote to repeal the law will be on July 11. Conservative media thinks the 2012 election has just become the 2010 election, a referendum on Obamacare.


Atomfritz said...

Just a cui bono question.
Do the banks own the Obamacare insurance companies?

Anonymous said...

If the amount of the premium increases with your income then it is obviously a tax...

Anonymous said...

"Every day the bucket goes to the well.
One day the bottom will fall out."

-- Bob Marley

Anonymous said...

There is no such thing as a 'free lunch'.

Anonymous said...

It was a fraud. Sold as "not a tax", turns out to be the biggest tax hike in the US history. Nothing to do with 'free lunch'.

Anonymous said...

I agree that the last thing the US economy needs in general is another tax, although calling it a tax is merely a legal distinction, not a financial or economical one. However, just for once it is "tax" money spent for the common good as it is part of a bigger package that allows millions of people access to healthcare.

The only option uninsured, financially not well-off people have to access healthcare in the US is to go to the unbelievable expensive Emergency Rooms, and that often when an untreated and not seldom entirely preventable condition finally got bad enough to be most costly to treat. This scenario is paid for with tax dollars directly and/or costs are being rolled over by the hospitals into their other services so that it is paid for by others through their ever-rising insurance premiums. THIS is what no one can afford any longer - apart from the fact that not providing access to affordable healthcare to all citizens is inhuman and ethically unjustifiable. Curiously enough, the American society recognizes this by providing (and paying for!) healthcare to prisoners, while law-abiding citizens are denied such rights and benefits. In this, most hospitals struggle financially to survive the madness of the system and insurance companies rake in tremendous and ever-increasing profits.

There is a LOT wrong with the American healthcare system on the financial and administrative side of things (I speak from 25 years of experience of working in healthcare management). "Obamacare" does not and indeed cannot possibly address it all, but it is at least finally a step in the right direction to start solving a problem that no one can afford to have any longer.

And if the annual dollar amount for such access to healthcare or percentage of gross annual income scares anyone, try this for scary:
My insurance premium just for myself for basic healthcare coverage in the US in 2009 would have been $600 PER MONTH when I was unemployed and without ANY income! Previously, through an employer-sponsored and hence discounted insurance plan, it still came to a hefty $400 per month, based on location, sex, and age and regardless of whether annual income was $20,000 or $500,000. Does anyone feel like doing percentage calculations on those numbers for scary?

If now only someone could get accomplished that the penalties for not obtaining healthcare coverage will also be a percentage of income instead of penalizing the wealthier by far less than lower income people, this new "tax" would be downright perfect for everyone considering the big picture, i.e., the excessive and unnecessary healthcare costs it seeks to get under control.

While, as already said, Obamacare doesn't solve all problems with the US healthcare system, paying this new "tax" at a minimum means to stop being penny-wise and dollar-foolish.


Anonymous said...

I grew up in a socialist system (former Yugoslavia). Unlike the people in the Soviet block, we were allowed to travel globally.

For me, having lived in Asia, Europe and the US, decent health care means being able to see a doctor (even a dentist) at 10 PM during the night shift, without me or my parents at the time paying for anything. Our taxes were not that much higher than the ones in the US, i.e. they were lower than the ones in the Germany.

Now, fast forward to a Ph.D. from the Ivy League and two years of no income whatsoever. I have never had insurance for dental healthcare in the US (beyond cleaning). I have delayed having a child because I would have had to pay for birth out of pocket.

Do I advocate universal free health care? Absolutely. The US system is rotten to the core and rotting other countries which model themselves off it.

Yet -- Obamacare is a pile of shit. It's another way to funnel money to insurance companies. It does not "seek to get under control" the health care costs, it seeks to extract even more from most people. Fortunately, I will leave the country for good before it is implemented...or rather, it may not be implemented as we get the robot Romney, completely the same class of person, financially, morally and intellectually (hah!) as Obama.

Atomfritz said...

Thank you mscharisma for that information!
Compared with that, I really like the German model.
Around 13-14% of income for normal German basic healthcare, capped at less than 300 Euros/month.
(The German public insurance is not profit-oriented, premiums at private insurance companies are usually much higher, depending on age).

Anonymous said...

@ Anonymous at 9:18: I emphasize with you and couldn't agree more with you about universal healthcare and the rotten American system.

However, the Obamacare package includes restrictions on how much profit insurance companies can make, although right off the top of my head I can't remember the exact details (something to the regard that health insurance premiums cannot exceed the actual cost of services provided by more than a certain percentage).

Should the healthcare reform package have included much more and stricter cost/profit control measures? Absolutely!!! Unfortunately, that wasn't possible thanks to the Republicans' (meaning, the insurance industry's) opposition. Likewise, it was the Republicans/insurance industry who pushed for the individual mandate (the "tax" here criticized). If it were up to Obama or other Democrats, universal healthcare would long since have been implemented in the US and it would have been the most economical, human, ethical and reasonable way to reform the existing system. "Obamacare" is what's left of this original plan/idea thanks to the Republicans'/insurance industry's fighting it tooth and nail.

The Obama reform package is indeed by no means great, but imho still at least a step - and a way overdue one at that - in the right direction. Let's hope, if or when fully implemented, it will be continued to be reviewed and reformed, and maybe some day even the US will have an at least decent healthcare system that provides access to healthcare for everyone.


Atomfritz said...

anon 9:18
I agree with you, too
Very illustrative comparison.

Anonymous said...

Actually, for anyone interested, a good summation of how "great" US healthcare is right now can be viewed here:

arevamirpal::laprimavera said...

US healthcare has descended into a mess, thanks in significant part to the laws and regulations by the government. To assert that further government-mandated programs will fix things is almost akin to asserting NISA can make nuke plants safe by regulating the industry.

Anonymous said...

@ arevamirpal: Share your distrust in the effectiveness of government entirely. However, US government healthcare programs such as Medicare etc. function fairly well. Polls asking those beneficiaries whether or not they'd rather be without, the overwhelming majority answers no.

Imho, the question is not whether there should be government programs, but rather what can every individual do to force the government to make them work.

I'm guessing you too would rather not just simply abolish NISA etc. and leave it up to the likes of TEPCO to regulate themselves?


arevamirpal::laprimavera said...

mscharisma, I would rather see NISA simply abolished, and have TEPCO, KEPCO, HEPCO, and all the other *EPCOs directly accountable to the citizens and residents.

Governments can move out of the way.

Anonymous said...

@ arevamirpal: Would again agree with you. Would be ideal, though practically impossible. You can't gather the population of a whole country every time (or ever) to make decisions/vote on every rule, regulation, and procedural decision to be made. As far as I know, the Swiss come closest to that idea of democracy, and even there it is workable/practical only within limits. And they too have to have representatives, i.e., a government. No practical way around government that I can think of. Only way out is for everyone to take responsibility for their government and not let them get away with whatever the flip nonsense they come up with at any given point.


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