March 25, 2012

THE SUPREME COURT is set to convene on Monday for the long-awaited showdown over the Patient Protection and Affordable Care Act, President Obama’s landmark health-care plan. The court has set aside an extraordinary six hours over three days to grapple with questions raised by the bill, including whether requiring individuals to obtain health insurance is constitutional. This is the first of three editorials that will assess the merits of the issues scheduled for argument each day.

First the justices will spend 90 minutes on Monday contemplating whether they should even be hearing the case at this time.

The issue arises because of an obscure provision known as the Anti-Injunction Act, which prohibits a legal challenge to a tax provision before it has gone into effect. Typically, those who take issue with a tax must wait until they pay to lodge a challenge and seek a refund.

The Affordable Care Act requires individuals to obtain health insurance; those who cannot afford it may be entitled to participate in government health-care programs such as Medicaid. Those who are able to pay but choose not to enroll in a private health-care plan are subject to a penalty — the specifics of which are included in the Internal Revenue Code. So the question arises: Is the penalty actually a tax and off limits to court challenge until after 2014, when the mandate takes effect and penalties begin to be assessed?

A panel of the Richmond-based federal appeals court and a prominent George W. Bush appointee to the D.C. federal appeals court said ‘yes,’ in part because lawmakers included the health-care fines in the tax code and directed that they be “collected and assessed in the same manner as a tax.”

If the justices agree, the case ends there; the constitutionality of the legislation would have to be decided at a later day. Some have argued this would be the wisest course because it would relieve the justices of rendering judgment on a volatile issue during an election campaign. Politically expedient that may be, but we believe the facts and the law compel a different conclusion.

The Anti-Injunction Act prohibits “suits for the purpose of restraining the assessment or collection of any tax.” But the “purpose” of the legal challenge by 26 states and the National Federation of Independent Business is not to obstruct tax collection but, as they put it, to “invalidate the [health-care act’s] mandate that they must purchase costly insurance from private companies.” Moreover, the court has drawn clear distinctions between a tax and a penalty, regardless of the manner in which it is collected. A tax, the court has said, “is an enforced contribution to provide for the support of government”; a penalty, on the other hand, “is an exaction imposed by statute as punishment for an unlawful act.” The latter is the closer description of the provisions in the health-care program; the justices should proceed with their assessment of the health-care law itself.

Tomorrow: Is the “individual mandate” constitutional?