Is the Individual Mandate Unconstitutional?

The big news story today seems to be that more than a dozen state attorney generals are putting together a legal challenge to the individual mandate in the recently passed health care reform. Here’s what Bill McCollum of Florida said:

“It forces people to do something — in the sense of buying a health care policy or paying a penalty, a tax or a fine — that simply the constitution does not allow Congress to do,” McCollum said at a news conference in Tallahassee.

McCollum, who is seeking the Republican nomination to run for Florida governor, said the healthcare reforms would add $1.6 billion to Florida’s spending on the Medicaid health program for poor people.

I’m no legal scholar, but I cannot see how handling the mandate through the 1040 tax form is any less constitutional than, say, tax deductibility of IRA contributions. Start from a baseline where everyone is presumed to have contributed to the maximum amount to an IRA. The IRA deduction operates as:

If no evidence of a retirement contribution is provided, add $x to taxable income. If evidence of a retirement contribution in the amount of $y is provided, add $x minus $y to taxable income.

So tell me what’s different about treating the individual mandate as follows. Start from a baseline where everyone is presumed to have obtained private health insurance. The individual mandate can operate as:

If no evidence of health insurance is provided, add $x to taxable income. [$x might depend on state of residence, number of dependents, and the level of income.]

Everyone is then presumed to be enrolled in Medicaid unless they show evidence to the contrary. The tax code already conditions on choices people have made. Prefunding health expenditures seems little different from prefunding retirement income. If a court struck down the individual mandate, how could it not strike down all of the other aspects of the tax code that condition on individual choices?

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About Andrew Samwick 89 Articles

Affiliation: Dartmouth College

Andrew Samwick is a professor of economics and Director of the Nelson A. Rockefeller Center at Dartmouth College in Hanover, New Hampshire.

He is most widely known for his work on the economics of retirement, and his scholarly work has covered a range of topics, including pensions, saving, taxation, portfolio choice, and executive compensation.

In July 2003, Samwick joined the staff of the President's Council of Economic Advisers, serving for a year as its chief economist and helping to direct the work of about 20 economists in support of the three Presidential appointees on the Council.

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1 Comment on Is the Individual Mandate Unconstitutional?

  1. Sir,
    The problem with the individual mandate is the precedent is sets. If the Federal Government is allowed to dictate to indviduals that they must contract with a private company because of the “general welfare” clause of the Constitution there is no end to where that could conceivably be taken. It is well within the realm of possibility then to say “The US needs a strong auto industry so we can maintain our manufacturing base and keep millions of people employed. Therefore everyone will be required to buy their car from a US auto maker.” You could apply this concept to anything because “general welfare” is in the eye of the beholder or in this case the eye of those in power. I am all for everyone having health insurance. The Government (at all levels) is already paying 60% of all healthcare costs as it is so hell, just go to a single payer and be done with it BUT this individual mandate is a slippery slope that any liberty loving thinking person will fight to have removed or pray that the court overturns.

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