The recent death of Justice Ruth Bader Ginsburg didn’t just scramble the political landscape six weeks before the election, it could also have major policy implications. Joe Biden may not want to say it publicly prior to Nov. 3, but Ginsburg’s death could prompt a future Biden administration to re-enact Obamacare’s individual mandate in an attempt to stave off a Supreme Court ruling striking down the law.
About the Case
The week after the election, the Supreme Court will hear arguments regarding a lawsuit in which a Texas-led group of states seeks to invalidate Obamacare. The suit, supported by the Trump administration’s Department of Justice, argues Congress’s 2017 decision to zero-out the mandate penalty eliminates its status as a tax, making it unconstitutional according to the Supreme Court’s 2012 ruling in NFIB v. Sebelius.
Furthermore, Texas argues if the court finds the mandate unconstitutional, the rest of the law must fall with it. Some conservatives, including this one, have criticized the logic of Texas’s case regarding severability. Yet, irrespective of what we want to happen regarding Obamacare, the facts seem obvious: Because Congress in 2017 decided to zero-out the mandate while retaining the rest of Obamacare, courts should abide by the decision made by the elected branches, striking the mandate should they find it unconstitutional while retaining the rest of the law.
Court watchers had hitherto assumed that the five-justice majority that upheld Obamacare’s individual mandate in 2012 would preserve the law from Texas’s challenge. Ginsburg’s death, however, removes one of those five justices, increasing the uncertainty of the ruling. On the other hand, if a Biden administration revives the mandate tax, it would likely render the lawsuit moot.
Reimpose the Mandate?
Biden has shown inclinations toward reimposing a national coverage requirement, supporting the move in an interview last July:
While his health plan did not include a mandate, it did reference an Urban Institute white paper calling for reinstating tax penalties on those who refuse to purchase insurance. Other proposals from Obamacare advocates have called for a de minimis levy — say, $5 — such that the mandate raises enough revenue to meet constitutional muster as a tax and head off the legal challenge mounted by Texas.
A Biden administration and a Democratic Party-controlled Congress could quite easily re-enact the individual mandate. In 2017, Republicans set the mandate penalty to $0 via a budget reconciliation bill, enacted via a simple majority in the Senate. Democrats could use the same process early next year to avoid a Republican filibuster and re-enact the mandate, quite possibly before the Supreme Court can even rule on the Obamacare lawsuit.
Bad Policy, Bad Politics
In the final analysis, however, taxing Americans who cannot afford health coverage represents both bad policy and bad politics. Internal Revenue Service data indicate that in 2018, the last year the mandate levy remained in effect, more than two-thirds of the returns paying the mandate penalty, and more than half of the revenue paid, came from households reporting less than $50,000 in adjusted gross income.
The mandate’s unpopularity stemmed not only from its unprecedented intrusion on the lives of Americans but also because it hit those least able to afford it. Acknowledging the struggles faced by middle-class families, Biden has pledged not to raise taxes on households making under $400,000. Reinstituting the individual mandate would break that promise, just like Barack Obama violated his “firm pledge” not to raise middle-class taxes when he imposed the mandate in the first place.
Obamacare Taxes for Thee — But Not for Me!
Complicating matters further, Biden avoided paying nearly $120,000 in payroll taxes imposed by Obamacare. Vast swathes of the American public already find the hypocritical behavior of its political elites loathsome. On that front, a Biden platform of “Obamacare taxes for thee — but not for me” might just take the cake.
In the presidential debates that start next week, Biden will likely use the lawsuit as a cudgel against Trump, claiming his Supreme Court nominee will vote to eradicate the law. The moderators and Trump should press Biden on what actions, if any, he would take as president in response to the suit — because millions of Americans could once again be paying a mandate tax before they know it.