According to news reports on the U.S. Supreme Court decision to consider appeals of the Patient Protection and Affordable Care Act, a key issue will be whether the requirement that all Americans have health insurance is constitutional.
It's unclear why the issue is highlighted when only one appeals court ruled that the requirement is unconstitutional. It's also unclear what the legal argument entails since the requirement appears to be similar to the mandate on all Americans to buy retirement insurance in the form of Social Security.
There are exceptions to the Social Security mandate. Federal government employees in a federal employee retirement plan are exempted. But other Americans with income from working must pay a tax under the Federal Insurance Contribution Act that amounts to 12.8 percent of their income (up to a maximum of $106,800 annually).
The employed worker pays half while his employer pays half. But there is an assumption that if employers didn't need to pay the "contribution," it could go to the employee in a higher wage. In any case, the self-employed are required to pay the full 12.8 percent - half of which is for themselves as employees.
As with the Affordable Care Act, Social Security Act/FICA has a social purpose - to assure that Americans have financial coverage when they reach "retirement" age or are no longer able to work. The Affordable Care Act seeks to assure that Americans have financial coverage for health care when needed.
The justification for both mandates appears to be the same. An uninsured retiree will be supported by society, if not by the government directly. The uninsured individual will receive health care supported by society, and in most cases the government. Americans are not yet ready to allow the uninsured to die for lack of food or medical care.
There is a difference. FICA funds go to the U.S. Treasury, and by definition are a tax. With the Affordable Care Act, the mandate to enroll in health insurance involves payments to private insurance companies, except for the fine to be imposed for not having insurance, which is characterized as a "tax" paid to the U.S. Treasury.
That difference matters since most private health insurance companies are for-profit, which means priority to profitability over services. The Affordable Care Act places services ahead of profitability, specifying that 80 percent of premiums paid by the insured must go to covering the insured - not to administrative costs, profits or dividends. With everyone required to purchase health insurance, insurance companies are barred from discriminating against anyone based on age or medical conditions. Another provision blocks insurance companies from capping or cutting coverage on individuals in need of medical care. Former health insurance executive Wendell Potter blogs that private companies are pressing Congress to amend the Affordable Care Act to eliminate provisions that affect profitability.
"Bills are now being considering in the House that would strip some of the most important consumer protections from the new law . . . health insurers would be free to spend as little of our premium dollars on our health care as they want, and they would be able to continue setting lifetime limits on policies and cancel our coverage at the time we need it most - when we get sick," he writes ("GOP backs insurance industry-friendly, anti-consumer bills," Sept. 15, 2011, www.prwatch.org/news/35267).
The court actions seek the same end. If the Supreme Court rules the mandate to purchase insurance is unconstitutional, insurance companies would not need to accept all applicants. But if the federal government has no constitutional authority to require individuals to acquire health insurance, what basis is there to require individuals to acquire retirement insurance?
* Edwin Tanji is a former city editor of The Maui News. He can be reached at email@example.com. "Haku Mo'olelo," "writing stories," is about stories that are being written or have been written. It appears every Friday.