Judges Reviewing Health Law Say Penalty Is Not A Tax

So far, the five U.S. District Court judges who have ruled on the merits in the various lawsuits against the Patient Protect Act haven't agreed on much.

But they do agree on one thing: The penalty for people who don't get health insurance starting in 2014 is NOT a tax.

That may make things tough for the Justice Department, because arguing that the penalty IS a tax has been Plan B. It's the argument Justice will pull out of its pocket if it doesn't prevail on its main argument, which is that the requirement for most people to have health insurance falls under the "Commerce Clause" of the Constitution.

Unfortunately for Justice, legislators' active avoidance of the "T" word during the drafting of the health law is so far working against them in court.

"The court notes that to date, every court which has considered whether (the penalty) operates as a tax has concluded that it does not," wrote District Court Judge Gladys Kessler in a ruling issued just last night.

In fact, Kessler goes on to quote favorably, at least on the tax issue, Judge Roger Vinson, the Florida judge with whom she could not have disagreed more on the overall question of the law's constitutionality.

(Vinson struck down the entire law as an unconstitutional overreach by Congress; Kessler found it a legitimate use of Congressional power.)

On the question of taxes, however, Kessler notes that "as Judge Vinson...discusses in great detail, the legislative history...makes clear that Congress did not intend the provision to operate as a tax...To the contrary, the legislative history indicates that Congress specifically rejected the term 'tax' in favor of 'penalty.'"

But maybe the Justice Department won't have to go there. For those keeping score at home, the feds are now up 3-2 in district court decisions.

Kessler swept aside the claims of the plaintiffs in the case who argued that they did not want health insurance, and at least two who pledged not to use medical services in the future:

"No one can guarantee his or her health, or ensure that he or she will never participate in the health care market," she wrote, in part because "in contrast to other markets for goods or services, if an individual is sick or injured, medical providers may not refuse basic medical services under federal law, regardless of the individual's ability to pay."

That's cost shifting, and inherently economic activity, Kessler ruled, and as such, "...[t]he court finds that Congress had a rational basis for its conclusion that the aggregate of individual decisions not to purchase health insurance substantially affects the national health insurance market. Consequently, Congress was acting within the bounds of its Commerce Clause power..."

But, neither Kessler nor Vinson will have the final word. The only other thing the judges seem to agree on is that the Supreme Court is going to have to weigh in.