WASHINGTON (AP) — The Patient Protection and Affordable Care Act (PPACA) individual health insurance requirement that the Supreme Court is reviewing isn’t the first federal mandate involving health care.
There’s a Medicare payroll tax on workers and employers, for example, and a requirement that hospitals provide free emergency services to indigents. Health care is full of government dictates, some arguably more intrusive than President Barack Obama’s overhaul law.
It’s a wrinkle that has caught the attention of the justices.
Most of the mandates apply to providers such as hospitals and insurers, and many of those mandates require the affected entities to engage in some type of activity, or engage in more of an activity than they might like, not simply to refrain from activity. For example, a 1990s law requires health plans to cover at least a 48-hour hospital stay for new mothers and their babies. Such requirements protect some consumers while indirectly raising costs for others.
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One mandate affects just about everybody: Workers must pay a tax to finance Medicare, which collects about $200 billion a year.
It’s right on your W-2 form, line 6, “Medicare tax withheld.” Workers must pay it even if they don’t have healthinsurance. Employees of a company get to split the tax with their employer. The self-employed owe the full amount, 2.9% of earnings.
The tax revenue that funds the traditional Medicare program does not go directly to private companies, but Medicare administrators use some of the revenue to pay private companies to run the traditional Medicare program, and they send some of the money to the private insurers that participate in the Medicare Advantage program.
Lindsey Donner, a small-business owner from San Diego, pays the Medicare tax although she and her husband are uninsured. Donner, 27, says she doesn’t see much difference between the mandate that workers help finance Medicare and the health care law’s requirement that nearly everyone has to have some sort of health insurance.
“My understanding of what is going on in the Supreme Court is that it seems to be something of a semantics issue,” she said. “Ultimately, I don’t see the big difference. If I am paying for Medicare, why can’t I also be paying into something that would help me right now or in five years if I want to have children?”
Donner is a copy writer for businesses; her husband specializes in graphics design. In the past they had a health plan with a high deductible, but they found they were paying monthly premiums for insurance they never used — something she said they couldn’t afford on a tight budget.
Under the law, people such as Donner and her husband would have to get insurance or pay a fine. But they may qualify for federal subsidies to help pay premiums for policies that would be more comprehensive. Preventive care would be covered with no co-payments.
“We have jobs, we pay our bills, we pay our taxes,” said Donner. “Yet it is very difficult to find affordable, reasonable health care.”
There’s no question the Medicare payroll tax is a government mandate, said Mark Hayes, former chief health counsel for the Republican staff of the Senate Finance Committee.
But he makes a distinction between the payroll tax and the individual health insurance mandate in Obama’s health care law.
Congress used more clearly defined constitutional powers when it created Medicare. “The power to tax and the power to spend,” Hayes said. “Here, with the individual mandate, it’s a different question — regulating interstate commerce. This is a novel question from a legal standpoint.”
Obama’s law makes health insurance both a right and a responsibility for most. It would provide coverage to more than 90% of the population, subsidizing private insurance for millions. But it also requires nearly everyone to carry health insurance, either through an employer or a government program, or by buying an individual policy.