Kevin McKechnie
Florida’s legislature, when asked to ratify the 16th amendment to the Constitution establishing a federal income tax, declined to even consider the issue. Virginia did consider the amendment, but rejected the very notion of income taxes in 1910 just a year after the amendment was proposed.

Neither state’s legislature thought the idea of income taxes was constitutional, thinking instead that it violated the protections afforded by the 4th amendment, namely the prohibition against seizure which provides security to every American with respect to “persons, houses, papers, and effects.”

Both states were part of the 26-state coalition that petitioned to have the Affordable Care Act – ObamaCare - overturned. Neither made this request based upon their historic objection to taxes (Florida, together with 8 other states, still does not have an individual income tax).

Instead, the objection to the individual mandate arose from an interpretation of the commerce clause holding that the government cannot compel individuals to buy insurance just so Congress can regulate it.

Chief Justice Roberts, and a majority of the Court concurred in this interpretation.

But, the Chief Justice then went on to say that the mandate, if considered a tax, is a constitutional use of Congress’ taxing authority. Which is to say that should the government decide to protect its investment in General Motors by requiring every American to buy a Volt, or be taxed a certain amount for failing to comply, there’s not much anyone can do about it.

To appreciate how large a problem this poses to the successful operation of ObamaCare, consider that the tax for failing to buy insurance is just a fraction of the cost of an annual policy. In other words, it makes significantly more financial sense to remain uninsured and either pay the tax penalty; or, purchase a policy only when you need it instead of when you don’t.

Such perverse incentives for non-compliance will cripple the dynamics of the Exchanges. Why participate in health insurance if the tax penalty for not doing so is so low?

In addition, the Supreme Court decision provided no relief from the two regulations most injurious to Health Savings Accounts (HSAs) and the qualifying health insurance plan integral to them. The Medical Loss Ratio (MLR) and the Actuarial Value (AV) regulations do violence to the insurance plans of the very people ObamaCare is supposed to help the most: individuals and small businesses.

Kevin McKechnie

Kevin McKechnie is the Director of the HSA Council, a partnership of banks, health insurers and technology partners working to finance healthcare for more Americans by increasing the adoption velocity of Health Savings Accounts (HSAs) nationwide. The HSA Council is part of the American Bankers Association and is located in Washington DC.