Economist John Cochrane makes a fascinating point in his blog The Grumpy Economist, writes Two More Cents on the Obamacare Decision, 6/30/12

There is in fact a huge difference between a tax on people without health insurance and a mandate enforced with a penalty.

A mandate is a mandate, a law that everyone must have health insurance. If the minor penalty envisioned in the ACA isn’t sufficient (it’s not) to get people to buy health insurance, it was entirely within HHS power to find more effective means of enforcement. They could literally have sent inspectors around and drag you off to jail for not having health insurance.

A tax is only a tax. If you pay the tax, there is nothing else they can do to you. And taxes have to be approved by Congress, not just HHS. And there is no way Congress is going to vote in a $10,000 head tax for not having health insurance.

Since the penalty under the mandate is so much less than the cost of health insurance, it was already pretty clear that they were going to have to start using strong-arm tactics to enforce the mandate.

They could have started by requiring proof of health insurance for getting a passport, student loan or grant, unemployment check, or any other interaction with the Federal Government. That was, according to the fawning New Yorker article on Obamacare, already contemplated. Next, go to the point of sale: they could have required that delivery of any health service must include a check of health-insurance status and report to authorities. They could have used medicare funds to force states to make proof of health insurance a requirement to get a driver’s license. In the end, yes, they could have sent inspectors around to check health insurance status and haul people off to jail. You think I’m kidding? They already send inspectors around to check immigration status and haul people off to jail.

Now, none of this can happen. By construing the penalty as a “tax,” and holding it unconstitutional as a “mandate,” Roberts has clearly said that the penalty is the only recourse the Federal government can use to enforce its mandate. It is only a tax on individuals who don’t have health insurance. It is nota law that people must have health insurance, enforceable by the usual array of legal administrative and regulatory sanction.

The minute HHS tries anything beyond the penalty to coerce people to buy health insurance (which it will–it must), HHS will be sued (which it will). The suit will say: “A mandate is unconstitutional. It’s only a tax. We paid the tax. Go away.” The suit will go to the Supreme Court. In the current court, it will win in a heartbeat.

That pretty much undermines the whole mandate business just as effectively as striking it down would have done.

HKO Comments:

Pundits are still trying to figure out what happened on this ruling, and many of the conservatives pundits are seething. Perhaps, if professor Cochrane is correct, then all Justice Roberts did was to take the rope ObamaCare gave him, fashion it into a noose and give it back to him. Sometimes answered prayers are more disappointing than unanswered prayers.

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