Obamacare Facts: 'Individual Mandate' Explained

By Tanya Roth, Esq. on June 03, 2011 | Last updated on March 21, 2019

The Patient Protection and Affordable Care Act is in court this month. The 4th Circuit Court of Appeals, among others, is hearing the case against Obamacare.

But while many people are talking about it, not all understand the exact debate before the courts. The Obamacare issue, at least as presented before the 4th Circuit Court of Appeals, is much deeper than a right or wrong, blue or red issue.

The cases before the 4th Circuit against the Obama Administration are brought by Liberty University and on behalf of the state of Virginia by its Attorney General, Kenneth Cuccinelli. Prior to rehashing down this month’s events, it’s probably best to explain a few issues underlying the Obamacare debate a little further.

The Patient Protection and Affordable Care Act, or PPACA, was passed by Congress on March 21, 2001 and signed into law on March 23, 2010. One of the issues prior to this week’s events was whether the Anti-Injunction Act would forbid the federal courts from even ruling on the PPACA. This argument was recently dropped, as all three parties took the same position in their supplemental briefs, reports The Washington Post. The other tax law argument relating to the Congressional power to tax, however, remained.

Let’s step back for a minute. Before we can even explain why the Anti-Injunction Act was even invoked (and what it means, anyway), it would be useful to explore some basic legal facts about Obamacare. Here is a step-by-step outline:

  1. The Individual Mandate. PPACA was enacted under the budget reconciliation process. As such, it had an impact on the Tax Code, namely, by adding a section to the Tax Code. The section it added stated a “Requirement to Maintain Minimum Essential Coverage” with certain exceptions carved out for specific people (e.g. prison inmates, certain low income taxpayers). Nevertheless, those who were mandated to get this coverage also faced a penalty for violating the mandate.
  2. Characterizing the Mandate as Tax. If the individual mandate is a “tax”, as the Obama Administration alleges, then the Anti-Injunction Act applies. The “mandate equals tax” idea has another benefit — it could justify the Administration’s actions in imposing the mandate under Congress’s power to tax for the general welfare.

In an upcoming blog post, we’ll talk further explore the Anti-Injunction Act and the arguments made for and against its application.

Keep posted to this blog and the 6th Circuit blog as we further discuss the Patient Protection and Affordable Care Act lawsuits.

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