The Affordable Care Act Includes an Unconstitutional, Discriminatory Tax (resulting in a 116% rate increase for self-paying Arizonians)

The following discussion is lengthy because it lays out the absurd scheme of manipulating health care premiums for one, small group of citizens to provide benefits to all Americans. The small group of citizens that are getting the short end of the stick are those that pay for their own health insurance. Health insurance premiums for self-payers are rising an average of 25% across the United States in 2017. However, if you live in Phoenix, Arizona, your premium is rising 146% in 2017. All self-paying health insurance Americans, but particularly Arizonians, should read this to understand why your premiums are skyrocketing. You will not be happy to learn that the law singles you (a self-payer) out to bear the cost of socializing health care. Employers that provide health insurance to their employees are not seeing astronomical rate increases because the Affordable Care Act (ACA) was written to keep health care affordable for employers by shifting costs to the individual health care consumer.

A “tort” is a legal term that refers to bodily, emotional and/or financial injury. This complaint attests that the ACA has caused a financial tort to millions of Americans and that the ACA is therefore unconstitutional. The law establishes a hidden tax that only applies to those individuals that pay for their own health insurance. The tax is then used to benefit all Americans. This is known as a discriminatory tax and it does not conform to the uniform tax clause of Section 8 of the United States Constitution.

When the ACA came into force, my insurance provider informed me that my plan was not compliant with the ACA and that I had to purchase another plan. The cost of my premium immediately went up 100%. At the same time, my “out-of-pocket” deductible skyrocketed to a combined $13,000 for my wife and myself. However, the new plan did include pediatric dental care and free birth control. I was 57 and my wife was 55 at the time we were provided with pediatric dental care and birth control. Needless to say, we were thrilled with our new benefits that were of no value to us.

The ACA has been challenged in the courts on the basis that the individual mandate was unconstitutional. The Supreme Court ruled that the mandate was constitutional. It has also been challenged in our courts as unconstitutional because it required employers with contrary religious views to provide birth control benefits to their employees. The Supreme Court ruled that this provision could be managed to not trample upon Americans’ right of religious freedom. Therefore, again, the Supreme Court ruled that the ACA was constitutional.

The description of this tort affirms that the ACA is unconstitutional based on the operation of the law itself. In fact, Chief Justice Roberts used the operation of the law concept to rule that the “shared responsibility penalty” of the ACA was a tax and not a penalty. The “operation of the law” door has been opened and this complaint is going through it.

My tort is that the government has taken away my right to purchase health insurance as an individual. I must purchase a health insurance plan that is ACA compliant as a member of a risk-pool of all individual health care consumers in the Commonwealth of Pennsylvania. I live in Pennsylvania, if you live in another state and you pay for your own health insurance you must purchase health insurance as a member of your state’s risk-pool of individual health care consumers (the “State Group”). By taking away my right to purchase individual health care coverage based on my needs, my fitness and my well-being, I was required to pay twice as much for less coverage than I had prior to the ACA. That is my tort and I am not alone. This is a class-action lawsuit against the United States of America.

My tort was created by enactment of the ACA that our elected officials either knew or should have known would violate our constitution in two ways: 1) it violates the uniform tax clause of Section 8 of the constitution, and 2) it uses regulation to compel indirect taxation. In fact, it creates a hidden tax that most people do not even know exists. Hiding taxes from people may not violate the words of our Constitution, but it certainly violates the spirit of the Constitution.

In furtherance of the following discussion, I describe the following major classes of health insurance consumers:

Medicare	Individuals that have paid the Medicare wage tax throughout their working life and are now receiving federal government funded health insurance.
Medicaid	Our government provides free health insurance to individuals whose income is too low to afford purchasing their own healthcare, and do not receive healthcare from an employer.
Employer-Self-Insured	Individuals that get their health insurance from their employer as a fringe benefit. The distinction between this group and the following group is that rather than purchasing insurance for its employees, employers that “self-insure” pay for all their employees heath care costs. Typically, they hire an insurance company to handle the administration of defining benefits, enrolling employees, contracting with doctors and processing claims. The insurance company is paid a fee for its administration service, but the employer pays ALL the healthcare costs.
Employer-Provided	Individuals that get their health insurance from their employer as a fringe benefit. Unlike the “Employer-Self-Insured”, the employers in this class purchase insurance. If the costs of their employees’ health care are higher than was expected in determining the premiums, the insurance company must pay the additional costs. Insurance companies spread the risk of loss from one employer by insuring many employers.
Individuals	People that do not get health insurance as a member of any of the above classes. They pay for their own health insurance based on their health status. This class was eliminated by the ACA. Individuals can no longer purchase the insurance that they want, based on their health status. All people that purchase their own health insurance are now included in the State Group class defined below.
State Group	All individuals that purchase their own health insurance under the ACA. Individuals are assigned to a risk-pool on a state by state basis (because of state specific insurance regulations). Because preexisting conditions cannot be used to determine premiums, a 58-year-old that weighs 800 pounds pays the same as a 58-year-old in top physical condition. This is the “shared responsibility” intent of the ACA.

Prior to the ACA, individuals were charged health insurance premiums based on the coverage they needed and based on their risk factors. Just as car insurance is based on an individual’s driving record, age, gender, etc., health insurance was based on an individual’s preexisting conditions, age, weight, smoking status, etc. People that were healthy (usually because they worked on their fitness) paid less than those who were unhealthy. This is not meant to infer that unhealthy people do not work at being healthy, many do.

The ACA imposed new regulations that fundamentally changed how individuals purchase health insurance. An individual can no longer purchase the insurance they want; nor can they negotiate premiums based on their own health and well-being. They have been forced into a risk-pool of all other individuals within their state of residence (the State Group). As I stated above, this has created my tort. By being a member of this new State Group, I must pay a higher premium for less benefits. I must pay for the socialization of health care within my State Group. In fact, the socialism of health care in my State Group is the socialization of heath care in all of America (discussed later). Social programs in the United States of America are paid for by taxation of all Americans, not by imposing higher fees on the products sold to one individual to enable a lower fee for another citizen. Yet this is one way that the ACA pays for socialized health care. This is regulation that compels a hidden, discriminatory tax and it is unconstitutional.

The proof that health insurance premiums include a hidden tax for the socialization of health care is provided by the title of the “penalty” included in the ACA for not purchasing health insurance: “the shared responsibility penalty.” The Supreme Court has ruled that the shared responsibility penalty is a tax. If you do not purchase health insurance, you are not “sharing your responsibility” of helping keep premiums lower for others. That means that purchasing health insurance as an individual includes a tax that is redistributed to other citizens whose health insurance premiums would otherwise be higher. Yes, you are paying a tax and you were not only not told of the tax, but you were not given an income-tax deduction for said tax. Further proof is the spirit of the entirety of the law.

If all Americans were in the same risk-pool, the hidden tax would apply to all Americans and be constitutional. However, the benefits of the State Groups are realized by all Americans (more on this later) while all the hidden taxes (premium averaging) are extracted from the healthy people within the State Group. Yes, someday the healthy people may become the unhealthy people and therefore they are not being penalized. If all Americans were included in this scheme, I would agree. But they are not. In fact, as I will discuss later, almost all the sick people are forced into the State Group class of health care consumers.

Now that insurance premiums are established as a means of taxation; we must look at the legalities of such a tax. Section 8 of the Constitution of The United States of America states: “Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defense and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States.” The Supreme Court has ruled in the past that the “uniform tax clause” relates to the geographical impact of the taxes and that taxes must have a uniform impact among the several states. However, the Court has ruled on the legality of discriminatory tax practices that were not geographically based. Such a case involved the taxation of interest paid on tax-free municipal bonds. By not taxing the interest paid on municipal bonds, the bond-holder is receiving a special tax exemption that is not available to citizens that purchase other bonds. The Court ruled that such tax-free statuses were constitutional. The tax-free nature of the bonds encourage investment in projects for the common good. Furthermore, all citizens are similarly impacted by the lack of taxes paid by the few bond holders. Lawyers refer to matters such as the municipal bond case as “tax discrimination” cases. Therefore, the Court has in the past considered that the uniform tax clause of Section 8 of the Constitution may be broadened to more than a geographical test to determine if tax discrimination exists.

Note that in the tax-free municipal bond case, a few acquire benefits that are paid by all taxpayers. Under the ACA, all receive benefits but only a few pay the cost of these benefits.

The above table described all the classes of individuals that purchase or otherwise acquire health insurance. Of all the individuals represented in that table, approximately 8% reside in the last class of “State Group.” And it is only this group of citizens that pays a hidden tax (premium manipulations) for the socialization of health care that has been enacted by the ACA. This is tax discrimination.

Employer-Self-Insured (see the table above) individuals may or may not receive the required benefits of pediatric dental care, birth control, free preventive care and other ACA mandated benefits. Employers that self-insure their employees’ health care are exempt from the ACA requirements. This is a huge tax loop-hole for the rich – but they get a bigger one (more later).

Employer-Provided (see the table above) individuals receive all the ACA required benefits. But their premium costs are based on their own risk-pool of fellow employees. All individuals (Employer-Self-Insured and Employer-Provided) that get their health insurance from their employer have lower premiums because they are in healthy risk pools. The risk of working people is much lower than non-working people who are all included in the State Group class. Employers cannot discriminate based on disabilities, but they have the right to hire only healthy workers. Furthermore, if an employee suffers a catastrophic illness or accident, the employee can no longer work and falls into the State Group class of health insurance consumers. This is the largest tax loop-hole provided by the ACA – and it goes to the richest among us, whereas, the tax burden goes mostly to the least wealthy among us. This “operation of the law” results in all sick citizens residing in the State Group class of health care consumers. By socializing this class, all of America’s health care is socialized.

The individuals in the Medicare, Medicaid, Employer-Self-Insured, and Employer-Provided class do not pay the “shared responsibility tax.” Only the State Group (8% of the total population) pays the extra, hidden tax for the socialization of heath care provided for in the ACA. This is why health insurance premiums are rising, on average, 25% for self-paying health insurance consumers but not for the rest of America. Our government has stated that this is not a big deal because 85% of the State Group receives subsidies to help them pay for their health insurance premiums. As the unfortunate individual within the 15% of the 8%, it is a big deal to me. However, it should be a big deal to the 85% of the 8% also. Many of them are receiving subsidies to help them pay for an artificially higher premium. Do our elected officials not think that they would take pride in paying for their own health insurance at its true cost?

There are three primary benefits that individuals in the State Groups receive from the ACA: 1) subsidies to help lower-income people afford the premiums, 2) the prohibition of insurance denial due to preexisting conditions, and 3) premiums discounted for the unhealthy. These are benefits to all Americans whether they receive their health insurance from their employer or if they purchase it themselves. As noted above, if you become so disabled that you can no longer work, you will no longer receive health insurance from your employer. You will drop into the State Group class. You will then receive the benefit of an artificially lowered health insurance premium because healthy people are paying an artificially higher premium. On top of that, the government will provide subsidies to help you pay your premium.  The direct subsidies paid by the government on behalf of the low-income individuals is paid for by all Americas. However, the averaging of premiums within the State Group class is paid for by the healthy for the unhealthy. And the unhealthy come from both the self-paying and employer provided populations of health care consumers. This premium averaging is socialized health care for the entire population paid for by a fraction of the total population. Have I beaten this dead horse enough already? Again, if all Americans subjected to the same treatment it would be constitutional.

The healthy pay more than the unhealthy, but even the unhealthy within the State Group pay more than they should because ALL the unhealthy people are in the State Group class of health insurance consumers. The Employer-Self-Insured and the Employer-Provided classes are shielded from the costs of the unhealthy. Have I mentioned discriminatory taxes before? If the risk were spread across all Americans, the State Groups would pay less and the Employer classes would pay more.

The ACA provides a fourth benefit to individuals that receive health insurance from their employer. You pay lower premiums because the State Groups take on all the risk of any catastrophic illness or accidental injury. In addition to the non-uniformity of taxation, there is this non-uniformity of the “general Welfare,” or benefits derived from the ACA. And again, it benefits the rich and paid for by the poor.

It should be noted that those self-paying individuals in the State Group do not receive an income tax deduction for the money spent on their more expensive health insurance, but the employers that receive the benefits of lower premiums do get a tax deduction. Furthermore, the employees receive their health insurance on a income-tax-free basis. Bernie Sanders really should have exposed this ACA scheme.

When our elected officials stated numerous times that we need the young and healthy to purchase health insurance to help pay for the old and sick, they were admitting to a social program that they unconstitutionally designed and unconstitutionally required the poorest among us to pay for.

All citizens receive the benefits of the ACA but a good portion of it is paid for by 8% of the citizenry. This does not stand up to the uniform taxation clause of our constitution. Furthermore, the scheme to utilize regulations to redistribute wealth should be ridden from our society. If as a society, we decide to provide socialized health care (or any other product/service) we must legally declare it and legally pay for it. Regulation that artificially raises and/or lowers prices paid for things to redistribute wealth is something our founding fathers could have never imagined.

The ACA is not unconstitutional because of the individual mandate; it is unconstitutional because it indiscriminately taxes a few to provide benefits to all. I also contend it is unconstitutional because it removes our individual freedoms. The freedom to assemble and associate is also the freedom to not assemble and to not associate. The ACA forces certain individuals (but not all) to associate with all other individual health care consumers in their state of residence. Unless an individual chooses to associate with their State Group, they cannot purchase health insurance. An employee that does not like their employer provided health insurance is free to move to another employer. Sadly, this option is not available to self-paying citizens.

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Note 1: I have done enough legal research on this complaint to realize that I need a lawyer (pro bono of course). My tort is real in that I have suffered damages. Therefore, my case has standing. However, I am only looking to recoup $1 from the government to rectify my tort. What I want is to have the law fixed. I think a careful read of this complaint can identify an obvious solution to fix the ACA. Like Donald Trump, I am keeping you in suspense on the fix. This article/complaint is too long already and I need the material for another article.

Note 2: The ACA was a huge tax increase on the middle-class. So much for President Obama’s pledge not to raise taxes on them. He even created hidden taxes on the middle-class.

Note 3: ...... the system is rigged!