Advertisement

Politics 2012: An incentive (or penalty) by any other name ...

Likely Republican presidential nominee Mitt Romney is having trouble defining his position on the Supreme Court's decision upholding the individual mandate that's part of the Affordable Care Act. Is it a tax or a penalty? Romney now says it's both. UPI/Kevin Dietsch
Likely Republican presidential nominee Mitt Romney is having trouble defining his position on the Supreme Court's decision upholding the individual mandate that's part of the Affordable Care Act. Is it a tax or a penalty? Romney now says it's both. UPI/Kevin Dietsch | License Photo

Remember the old commercial that proclaimed a mint was a breath mint? No, wait. It's a candy mint. Wait … it's two mints in one.

The same could be said of the Affordable Care Act's individual mandate: It's a penalty; no, it's a tax.

Advertisement

Ever since the U.S. Supreme Court ruled the individual mandate was constitutional because it was a tax, not because Congress could regulate interstate commerce, all bands of the political spectrum have been parsing the word "tax," which Republicans say the mandate is, and the word "penalty," the term used by President Obama and Democrats.

Presumptive Republican presidential nominee Mitt Romney and his campaign, however, has said it's both -- like that one-time popular mint.

Romney adviser Eric Fehrnstrom told MSNBC that Romney agrees with Justice Antonin Scalia's minority opinion that "very clearly stated that the mandate was not a tax."

Advertisement

The former Massachusetts governor "disagrees with the court's ruling that the mandate was a tax," Fehrnstrom said.

By saying the mandate wasn't a tax, Fehrnstrom's comments sucker-punched a key Republican attack on the Affordable Care Act.

Romney is caught in the middle. He's blistered the healthcare law and vowed to start the repeal process if he's elected. But Romney advocated and signed similar legislation when he governed Massachusetts.

The 2006 Massachusetts law included a fine on people who refused to buy health coverage and Romney called it a "penalty" and "incentive," but not a tax, The Washington Post reported.

However, days after Fehrnstrom's comments on MSNBC, Romney told CBS News Obama's individual mandate is "a tax."

"The Supreme Court has spoken, and while I agreed with the dissent, that's taken over by the fact that the majority of the court said it's a tax, and, therefore, it is a tax. They have spoken. There's no way around that," the presumptive GOP presidential nominee said in an exclusive interview about the 5-4 ruling upholding the healthcare law.

"I said that I agreed with the dissent, and the dissent made it very clear that they felt it was unconstitutional," Romney said. "But the dissent lost -- it's in the minority."

Advertisement

Romney then used "tax" to say Obama broke his promise not to raise taxes on the middle class.

"You can try and say you wish [the court] had decided a different way, but they didn't," Romney told CBS News. "They concluded it was a tax; that's what it is. And the American people know that President Obama has broken the pledge he made. He said he wouldn't raise taxes on middle-income Americans, and not only did he raise the $500 billion that was already in the bill, it's now clear that his mandate, as described by the Supreme Court, is a tax."

Just how similar is Obamacare and Romneycare? Real similar, The Daily Beast said.

Both programs create exchanges in which insurance companies compete for potential customers. Both require individuals to purchase insurance if they're able, providing subsidizes for those who can't afford it.

One difference is the "incentive" under the Romney plan and the "penalty" under the Affordable Care Act, the Beast said. Romney's plan levies $1,200 while ACA calls for a penalty of $695.

Concerning subsidies, the Beast found Massachusetts provides more money to fewer people; Obama's plan gives less money to more people.

Both plans require employers to provide insurance, but in Massachusetts, companies with 11 or more employees must provide insurance or pay a $295 penalty per employee, The Daily Beast said. Under the Affordable Care Act, companies with at least 50 employees must offer insurance or pay a $2,000 penalty per employee.

Advertisement

While both plans allow children to remain on their parents' plan until they're 26 years old, the Massachusetts plan says children can stay on their parents' plan for two years after they're no longer claimed as a dependent or until they turn 26, whichever comes first.

The Affordable Care Act bars insurers from limiting benefits, either in a year or a lifetime. Romney's plan doesn't, but most Massachusetts insurance plans don't impose limits because they could violate the state's Minimum Creditable Coverage regulations.

Both plans require insurers to cover pre-existing conditions and bar insurers from dropping coverage retroactively, the Beast said. In Massachusetts, an insurer can limit coverage of specific pre-existing conditions to six months while the Affordable Care Act has no limit.

Insurers in Massachusetts can charge co-pays for preventative care but must cover preventive care without a deductible. Preventative care is free under the Affordable Care Act.

The Affordable Care Act includes the controversial requirement that contraception under the "preventative care" insurers must be provided for free, including by some businesses and faith-affiliated colleges. Romney tried to make hay of the controversy noting the Massachusetts plan doesn't mention contraception.

Under the 2002 Massachusetts law, insurers must cover contraception as they would cover other prescription drugs, the Beast said. Unlike the Affordable Care Act, the Massachusetts law didn't require insurers to provide contraception gratis, but it did require them to cover it. Romney's comments last week also don't square with several-years-old interviews about the Massachusetts healthcare law.

Advertisement

In a 2009 interview with CNN, Romney said if residents opted to skip health insurance when they could afford it, they would face the loss of a tax exemption.

"There are a number of ways to encourage people to get insurance and what we did, we said, 'You're going to lose a tax exemption if you don't have insurance,'" Romney said during CNN interview.

To qualify for the tax exemption, Romney added: "[You've got to] have health insurance because we want everybody in the system. No more free riders."

During the interview, Romney said the Massachusetts law could be a model that "could inform Washington on ways to improve health care for all Americans" -- something he now says isn't the case because the healthcare law was strictly for Massachusetts, not the nation.

"Our plan was a state solution to a state problem, and his plan is a power grab by the federal government to put a one-size-fits-all plan across the nation," Romney said in 2011 just before throwing his hat into the GOP race.

Also resurfacing is a 2008 interview with ABC News in which Romney said he imposed tax penalties under the Bay state law.

"[We] said, look, if people can afford to buy it, either buy the insurance or pay your own way; don't be free-riders," he said in the interview.

Advertisement

The muddled message put forth by the Romney campaign drew sharp editorial criticism from The Wall Street Journal last week.

"The Romney high command has muddied the tax issue in a way that will help Mr. Obama's claims that he is merely taxing rich folks like Mr. Romney," the editorial said. "And it has made it that much harder for Republicans to again turn Obamacare into the winning issue it was in 2010."

The "unforced error" was made, the Journal said, "[because] it fits with Mr. Romney's fear of being labeled a flip-flopper, as if that is worse than confusing voters about the tax and healthcare issues."

"Mr. Romney favored the individual mandate as part of his reform in Massachusetts," the editorial said, "and as we've said from the beginning of his candidacy his failure to admit that mistake makes him less able to carry the anti-Obamacare case to voters."

Latest Headlines