Insurance companies would be required to end the practice of having exclusionary periods at the beginning of coverage. This rule would allow require immediate coverage of health care claims for those with pre-existing conditions. Insurers would also be barred from imposing caps on coverage, the so-called "lifetime limits." That rule would benefit those whose health care needs -- the chronically ill, those with dread but treatable diseases like cancer -- quickly mount into health care claims in the millions of dollars. Those rules, and others, would have radically changed the margins at which insurance companies operated by raising the amount of payouts being required of offered plans.
To compensate insurance companies for such guaranteed cost increases, Obamacare included certain components designed to compel the broadest possible participation in the economic enterprise of purchasing coverage before it was needed. Key among those requirements were two mandates, the employer mandate and the individual mandate. The individual mandate required income eligible individuals to purchase health care insurance. Individuals that refused to purchase insurance would be required to pay a "shared responsibility payment." Both the Democrats and Obama insisted that the Shared Responsibility Payment was a penalty; Obama recoiled with horror at the notion that he and Congress were imposing a tax.
This, then, brings us to Chief Justice John Roberts. Roberts wrote the opinion for the majority in National Federation of Independent Business v. Sebellius. His opinion upheld the constitutionality of the individual mandate, a key feature of Obamacare intended to provide sufficient liquidity to insurance companies that would be experiencing high usage from those chronically ill now coming into their insurance pools, and being promised that they would never have to leave. To reach the conclusion that the requirement was constitutional, however, Roberts had to characterize the Shared Responsibility Payment as a TAX, precisely against Obama's claim.
Of course, that would not necessarily require the Justice to place his head in Scalia's paper sack. His erroneous reasoning, however, does require that he do so.
Roberts misread and misrepresented the Shared Responsibility Payment by calling it a tax. His intentional twisting of the statute did not constitute the ordinary meaning to be accorded to the language of the provision. In fact, he refused to say whether his twisted reading of the statute was anything other than a "fairly possible" reading. Worse, having concluded that the penalty was a tax, and thus within the power of the Congress, Roberts committed a further error.
There isn't just one category, "taxes," under the Constitution. The Constitution contemplates various kinds of taxes -- income taxes, “indirect” taxes," and “direct” taxes (like a tax on real estate or a head tax). Being "taxed," that is, being required to pay a Shared Responsibility Payment for making the decision not to purchase health insurance is a direct taxes. Direct taxes, however, have a specific rule under the Constitution. Article I of the Constitution prohibits direct taxes unless the method of applying them is such that the tax imposed is proportional to each State's share of the most recent census. (I realize that it is a technical argument, but this technical point limits Congress' power for a reason.) But the Shared Responsibility Payment is not accounted for in proportion to each State's share of the population by census.
Chief Justice Roberts has lived the bulk of his career in the law as a man of the government, of the system. Even here, where liberty, where the discernible meaning of the Constitution, and where legislative history of the questioned provision, compelled a conclusion directly contrary to the one Roberts' drew, there is no doubt the power, interest and predominance of the government is enhanced and entrenched by Roberts' opinion for the Court. For this reason, Roberts too should acquire the Scalia sack and keep his head in it.