Health Care In The States

Tax Or Penalty? Individual Mandate Haunts Romney

By Martha Bebinger, WBUR

July 4th, 2012, 11:30 AM

Updated 4:15 p.m. on July 4

The Massachusetts health care law, Mitt Romney’s signature achievement as governor, is adding more pressure to the expected GOP presidential nominee’s campaign. Romney’s support for the requirement that all residents have health insurance, known as the individual mandate, is at the heart of his predicament. The issue is whether the call the mandate a tax or a penalty.

In an interview broadcast today, Romney announced that he considers the mandate a tax.

“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,” Romney told CBS reporter Jan Crawford. “You can try and say you wish they had decided a different way but they didn’t. They concluded it was a tax.”

That marked a turnaround for the campaign. Romney’s longtime adviser, Eric Fehrnstrom, dropped a bombshell Monday when he said the governor does not believe the individual mandate is a tax.

“The governor has consistently described the mandate in Massachusetts as a penalty,” Fehrnstrom told MSNBC’s Chuck Todd.

The point is important for Romney, because if he calls the fine for failure to have health insurance a tax, then he cannot continue to maintain that he never raised taxes in Massachusetts. So Fehrnstrom stuck to the penalty claim as Todd asked him to clarify.

“The governor does not believe the mandate is a tax, that’s what you’re saying,” Todd asked.

“The governor believes that what we put in place in Massachusetts was a penalty,” said Fehrnstrom, “and he disagrees with the court’s ruling that the mandate was a tax.” So he agrees with the president,” said Todd as he and Fehrnstrom went back and forth.

And that stance appears to have confounded other Republicans. “This is very surprising, I would say even shocking, that he would do this to allies who wanted to make Obamacare a huge issue against Obama,” said Repubican Strategist Todd Domke, after the Fehrnstrom interview.

Romney’s record on the individual mandate in Massachusetts is also confusing. His original health care bill said that any Massachusetts resident who did not either have health insurance or post a $10,000 bond as proof they could afford care could lose the personal exemption on their tax returns. In other words, Romney would have imposed a penalty through the state tax form.

Few people in Massachusetts were asking if the fine for not having health insurance was a tax or a penalty before the Supreme Court ruling last week.

“The distinction hasn’t mattered at all, it hasn’t entered the political debate or made any difference in terms of policy,” said Michael Widmer, president of the Massachusetts Taxpayers Foundation. The issue of tax versus penalty just never came up, said Harvard School of Public Health professor John McDonough, because both “Democrats and Republicans agreed that an individual coverage requirement was a smart thing to do. It didn’t become controversial because no one was throwing rocks at each other.”

But there’s still the question: is the individual mandate a penalty or a tax in Massachusetts?

“Well it’s a penalty, but frankly I don’t care what you call it, it’s a solution,” said Gov. Deval Patrick. “It affects a very small number of people who are freeloaders on the system where we pick up their costs.”

For Romney, right now, whether the individual mandate is a tax or a penalty does matter and may, as some Republican leaders suggest, determine his chance to beat Obama on health care.

This story is part of a reporting partnership that includes WBUR, NPR and Kaiser Health News.

One Response to “Tax Or Penalty? Individual Mandate Haunts Romney”

  1. pete says:

    Romneycare defines Mitt Romney as flip-flopper of the decade. Those who support Romney need to be honest and go back to 2006 and watch videos of him promoting Romneycare. It’s disgusting to watch a completely different Romney in 2006 when compared with the Romney he tries to be in 2012. The Obama campaign team needs only play those 2006 videos over and over and over. It matters not that health care is a states rights topic, if you liked mandates in 2006 and now you hate mandates, you flipped! You can put as much lipstick as you want on a mandate, it’s still a mandate! If you are against a tax penalty in 2012, any tax penalty, why were you for the same tax penalty in 2006? Romney is a hypocrite. The Heritage Foundation, the ultra right-wing organization, dreamed up the individual mandate back in 1989. Back then, Republicans jumped on that idea in droves in an effort to combat Hillarycare. The GOP loved the individual mandate back then. Romney loved it so much that he enacted it in Massachusetts. Newt Gingrich loved it so much that he wrote about the virtues of the individual mandate extensively. It wasn’t until the Tea Party said they didn’t support the individual mandate that Republicans abandoned their own idea. Hypocrites! Nothing but a bunch of wimpy hypocrites. Obama needs to play those old Governor Romney videos repeatedly!