Beginning in 2014 every American will have to carry health insurance or pay a penalty. That much the Supreme Court’s June 28 decision on the Affordable Care Act made perfectly clear. What the justices’ ruling didn’t resolve: how the individual mandate will be enforced. That task, along with dozens of others, now falls to the IRS.
Over the next year and a half, the agency has to figure out a way to flag the tax returns of the 3 million people expected to skip insurance. It has to come up with a system for doling out annual subsidies to 18 million people who make roughly $45,000 or less, and another mechanism to deliver yearly tax credits to small businesses—all the while making sure nobody games the system. It will have to start collecting taxes on medical devices as well as a Medicare surtax on Americans who make more than $200,000. It also will be responsible for conducting more audits of tax-exempt hospitals.