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(2) The individual mandate provision of the ACA functions constitutionally as a tax, and is therefore a valid exercise of Congress's taxing power.

(3) Congress exceeded its Spending Clause authority by coercing states into a transformative change in their Medicaid programs by threatening to revoke all of their Medicaid funding if they did not participate in the Medicaid expansion, which would have an excessive impact on a state's budget. Congress may withhold from states refusing to comply with the ACA's Medicaid expansion provision only the additional funding for Medicaid provided under the ACA.[1]

Eleventh Circuit affirmed in part and reversed in part.Court membership
Chief Justice
John Roberts
Associate Justices
Antonin Scalia · Anthony Kennedy
Clarence Thomas · Ruth Bader Ginsburg
Stephen Breyer · Samuel Alito
Sonia Sotomayor · Elena Kagan
Case opinionsMajorityRoberts (Parts I, II, and III-C), joined by Ginsburg, Breyer, Sotomayor, and KaganPluralityRoberts (Part IV), joined by Breyer and KaganConcurrenceRoberts (Parts III-A, III-B, and III-D)Concur/dissentGinsburg (concurring in the judgment in part), joined by Sotomayor; Breyer and Kagan (Parts I, II, III, and IV)DissentScalia, Kennedy, Thomas, and AlitoDissentThomasLaws appliedU.S. Const. art. I; 124 Stat. 119–1025 (Patient Protection and Affordable Care Act)

National Federation of Independent Business v. Sebelius, 567 U.S. 519 (2012), was a landmark[2][3][4] United States Supreme Court decision in which the Court upheld Congress' power to enact most provisions of the Patient Protection and Affordable Care Act (ACA), commonly called Obamacare,[5][6] and the Health Care and Education Reconciliation Act (HCERA), including a requirement for most Americans to have health insurance by 2014.[7][8] The Acts represented a major set of changes to the American health care system that had been the subject of highly contentious debate, largely divided on political party lines.

The Supreme Court, in an opinion written by Chief Justice John Roberts, upheld by a vote of 5 to 4 the individual mandate to buy health insurance as a constitutional exercise of Congress's taxing power. A majority of the justices, including Chief Justice Roberts, agreed that the individual mandate was not a proper use of Congress's Commerce Clause or Necessary and Proper Clause powers, though they did not join in a single opinion. A majority of the justices also agreed that another challenged provision of the Act, a significant expansion of Medicaid, was not a valid exercise of Congress's spending power as it would coerce states to either accept the expansion or risk losing existing Medicaid funding.

The dissent also disputed Justice Ginsburg's claim that the court's opinion failed "to explain why th

The dissent also disputed Justice Ginsburg's claim that the court's opinion failed "to explain why the individual mandate threatens our constitutional order":[47]

Finally, the joint dissent argued that since the ACA exceeded its constitutional powers in both compe

Finally, the joint dissent argued that since the ACA exceeded its constitutional powers in both compelling the purchase of health insurance and in denying non-consenting States Medicaid funding, the whole statute should have been deemed inoperative because the two parts were central to the statute's design and operation.[48] The joint dissent mentioned that "the Constitution requires tax increases to originate in the House of Representatives" per the Origination Clause,[49] though that issue was not addressed by the majority opinion.[50]

In a one-paragraph dissent, Justice Thomas emphasized his long-held belief that the Supreme Court's precedents have broadened Congress's powers under the Commerce Clause in a manner "inconsistent with the original understanding of Congress's powers and with this Court's early Commerce Clause cases". Thomas wrote that he agreed with Roberts' interpretation of precedents allowing Congress to use the Commerce Clause to regulate "the channels of interstate commerce" and the "persons or things in interstate commerce" and disallowing the regulation of commercial inactivity. However, he disagreed with the court's third, "substantial effects" test as established by Wickard v. Filburn, articulated within United States v. Morrison, and strengthened by Gonzales v. Raich.

Reaction and commentary

Med

The Court convened on the morning of June 28, 2012, to announce its decisions on the ACA and two other cases; it announced its ruling on the ACA shortly after 10:00 am EDT. CNN and Fox News initially reported that the individual mandate was found unconstitutional, but corrected themselves within minutes.[51] President Obama initially heard from CNN and Fox News that the mandate had been found unconstitutional, but then heard the correct information shortly thereafter.[52]

Speculation over Roberts' vote

Immediately following the decision, there was speculation that the joint dissent was the original internal majority opinion, and that Chief Justice Roberts' vote changed some time between March and the public issuance of the decision.<

Immediately following the decision, there was speculation that the joint dissent was the original internal majority opinion, and that Chief Justice Roberts' vote changed some time between March and the public issuance of the decision.[53][54][55]

On July 1, 2012, CBS News, citing unnamed sources within the Court, said that over the course of internal deliberations Roberts changed his position from striking down the mandate to upholding it.[56] The article, written by journalist Jan Crawford, reported that during the Court's private conference im

On July 1, 2012, CBS News, citing unnamed sources within the Court, said that over the course of internal deliberations Roberts changed his position from striking down the mandate to upholding it.[56] The article, written by journalist Jan Crawford, reported that during the Court's private conference immediately after the oral arguments, Roberts was inclined to strike down the mandate but, in disagreement with the other four conservative justices, was not certain this required striking down the law in its entirety.[57] News articles in May 2012 that warned of potential "damage to the court—and to Roberts' reputation—if the court were to strike down the mandate" increased the external pressure on Roberts, who "is keenly aware of his leadership role on the court [and] is sensitive to how the court is perceived by the public", and pays more attention to media coverage of the Court than some of his colleagues.[58] It was around this time that Roberts decided to uphold the law. One of the conservative justices reportedly pressed Roberts to explain why he had changed his view on the mandate, but was "unsatisfied with the response".

On July 2, Adam Liptak of The New York Times insinuated that the leak could have come from Justice Thomas, as Liptak pointed out that Crawford has long had a relationship with Thomas, granting rare interviews and Thomas singled her out as his favorite reporter, saying "There are wonderful people out here who do a good job—do a fantastic job—like Jan [Crawford]."[59]

Some observers have suggested Roberts' philosophy of judicial restraint[60] or the lack of Supreme Court precedents available "to say the individual mandate crossed a constitutional line" played a part in his decision.[61] The article reported that after Roberts "withstood a month-long, desperate campaign to bring him back to his original position", with Kennedy, who is typically the swing vote in 5–4 decisions, leading the effort, the conservatives essentially told him "You're on your own."[62] The conservative dissent was unsigned and did not, despite efforts by Roberts to convince them to do so, make any attempt to join the Court's opinion, an unusual situation in which the four justices "deliberately ignored Roberts' decision, the sources said, as if they were no longer even willing to engage with him in debate".[63]

In 2019 it was reported that Roberts had originally voted to invalidate the individual mandate and uphold the Medicaid expansion requirement. He believed that the Constitution's commerce clause never was intended to cover inactivity, such as the refusal to buy insurance. But he was uneasy with the political division in the vote tally and also did not want to invalidate the entire law because he thought the individual mandate was only inseverable from "community rating" and "guarantee issue" provisions of the law. Due to this impasse he explored the argument that the individual mandate could be upheld as a tax and invalidating the Medicaid expansion. Breyer and Kagan had previously voted to uphold the Medicaid expansion, but decided to switch and join Roberts' opinion on that section.[64]

President Obama praised the decision in a series of remarks,[65] while discussing the benefits of the legislation in a statement shortly after the decision. House speaker Nancy Pelosi said that Senator Edward Kennedy of Massachusetts, a longtime proponent of health care reform who died before the bill became law, could now "rest."[66]

The ruling quickly became a rallying cry for Republicans who criticized the Supreme Court's reasoning and vowed to repeal the ACA. Though they had already repeatedly attempted to do so starting in January 2011, they were unsuccessful in enacting a repeal. Conservatives quickly seized on the fact that Obama and the bill's proponents insisted repeatedly throughout the protracted political debate 2009 and 2010 that the mandate was not a tax, but the Supreme Court upheld it on the grounds that it was a tax.[66] Republican presidential candidate Mitt Romney said he would repeal the bill,[66] as did Speaker of the House John Boehner[67] and Senate Minority Leader Mitch McConnell.[68][66] Several state attorneys general who challenged the law stated that they were disappointed with the Supreme Court's ultimate decision but happy that in doing so, the Court limited the powers of Congress under the commerce clause.[69][70] Several state Republican officials indicated their desire to utilize the option granted to them by the Supreme Court to not further expand Medicaid.[71]

The American Medical Association, the National Physicians Alliance, the American Academy of Pediatrics, and the Association of American Medical Colleges said that the ruling was a victory.[72]

The New York Times reported the ruling "may secure Obama's place in history".[73]

Academic commentary

The New York Times reported that the court's ruling was the most significant federalism decision since the New Deal. It reported in this respect about the new limits the ruling placed on federal regulation of commerce and about the conditions the federal government may impose on money it gives the states. With respect to the Commerce Clause, the Court ruled that the federal government had no permission to force individuals not engaged in commercial activities to buy services they did not want.[7] With respect to the Medicaid expansion under the Affordable Care Act, the Supreme Court held that the ACA's requirement that states rapidly extend coverage to new beneficiaries or lose existing federal payments was unduly coercive.[8] The health-care law had to allow states to choose between participating in the expansion while receiving additional payments, or forgoing the expansion and retaining existing payments.[7] Virginia Attorney General Ken Cuccinelli, the first to challenge the ACA in federal court, praised the limits the Court placed on federal regulation of commerce and on the conditions the federal government could impose on money it gives the states.[70]

Georgetown Law professor Randy Barnett stated that by invalidating the withholding of existing Medicaid funding as unconstitutionally coercive[74] the Supreme Court found an enforceable limit on the Spending Power of the federal government.[75] This limit on the Spending Power of the federal government is part of Neal K. Katyal's ruling analysis. Law professor Neal K. Katyal at Georgetown University, who served as acting solicitor general of the United States and argued the health care cases at the appellate level, argued that the Supreme Court ruling could change the relationship between the federal government and the states because of "the existence of an extraconstitutional limit"[76] on the federal government's power under the Spending Clause. Katyal said that until now it had been understood that when the federal government gave money to a state in exchange for the state's doing something, the federal government was free to do so as long as a reasonable relationship existed between the federal funds and the act the federal government wanted the state to perform. He then referred to the Court holding that the ACA's requirement that states rapidly ex

The ruling quickly became a rallying cry for Republicans who criticized the Supreme Court's reasoning and vowed to repeal the ACA. Though they had already repeatedly attempted to do so starting in January 2011, they were unsuccessful in enacting a repeal. Conservatives quickly seized on the fact that Obama and the bill's proponents insisted repeatedly throughout the protracted political debate 2009 and 2010 that the mandate was not a tax, but the Supreme Court upheld it on the grounds that it was a tax.[66] Republican presidential candidate Mitt Romney said he would repeal the bill,[66] as did Speaker of the House John Boehner[67] and Senate Minority Leader Mitch McConnell.[68][66] Several state attorneys general who challenged the law stated that they were disappointed with the Supreme Court's ultimate decision but happy that in doing so, the Court limited the powers of Congress under the commerce clause.[69][70] Several state Republican officials indicated their desire to utilize the option granted to them by the Supreme Court to not further expand Medicaid.[71]

The American Medical Association, the National Physicians Alliance, the American Academy of Pediatrics, and the Association of American Medical Colleges said that the ruling was a victory.[72]

The New York Times reported the ruling "may secure Obama's place in history".[73]

The New York Times reported that the court's ruling was the most significant federalism decision since the New Deal. It reported in this respect about the new limits the ruling placed on federal regulation of commerce and about the conditions the federal government may impose on money it gives the states. With respect to the Commerce Clause, the Court ruled that the federal government had no permission to force individuals not engaged in commercial activities to buy services they did not want.[7] With respect to the Medicaid expansion under the Affordable Care Act, the Supreme Court held that the ACA's requirement that states rapidly extend coverage to new beneficiaries or lose existing federal payments was unduly coercive.[8] The health-care law had to allow states to choose between participating in the expansion while receiving additional payments, or forgoing the expansion and retaining existing payments.[7] Virginia Attorney General Ken Cuccinelli, the first to challenge the ACA in federal court, praised the limits the Court placed on federal regulation of commerce and on the conditions the federal government could impose on money it gives the states.[70]

Georgetown Law professor Randy Barnett stated that by invalidating the withholding of existing Medicaid funding as unconstitutionally coercive[74] the Supreme Court found an enforceable limit on the Spending Power of the federal government

Georgetown Law professor Randy Barnett stated that by invalidating the withholding of existing Medicaid funding as unconstitutionally coercive[74] the Supreme Court found an enforceable limit on the Spending Power of the federal government.[75] This limit on the Spending Power of the federal government is part of Neal K. Katyal's ruling analysis. Law professor Neal K. Katyal at Georgetown University, who served as acting solicitor general of the United States and argued the health care cases at the appellate level, argued that the Supreme Court ruling could change the relationship between the federal government and the states because of "the existence of an extraconstitutional limit"[76] on the federal government's power under the Spending Clause. Katyal said that until now it had been understood that when the federal government gave money to a state in exchange for the state's doing something, the federal government was free to do so as long as a reasonable relationship existed between the federal funds and the act the federal government wanted the state to perform. He then referred to the Court holding that the ACA's requirement that states rapidly extend Medicaid coverage to new beneficiaries or lose existing federal payments was unduly coercive by noting that the court found that "such a threat is coercive and that the states cannot be penalized for not expanding their Medicaid coverage after receiving funds. And it does so in the context of Medicaid, which Congress created and can alter, amend or abolish at any time. ... This was the first significant loss for the federal government's spending power in decades. The fancy footwork that the court employed to view the act as coercive could come back in later cases to haunt the federal government. Many programs are built on the government's spending power, and the existence of an extraconstitutional limit on that power is a worrisome development."[76] Katyal also mentioned that the federal government told the court that long-standing laws contain clauses that condition money on state performance of certain activities. "The decision leaves open the question of whether those acts, and many others (like the Clean Air Act), are now unconstitutional as well."[76] However Reuters reported later that Katyal reversed his opinion and stated that he didn't see any litigation coming out of the Supreme Court holding in the near term.[77]

In the same direction as Katyal argues Kevin Russell, who teaches Supreme Court litigation at Harvard and Stanford Law Schools and clerked for Judge William Norris of the Ninth Circuit and Justice Stephen Breyer. According to him several significant civil rights statutes, enacted under Congress's Spending Power, are at risk to be unconstitutional, because the Court held that Congress exceeded its Spending Clause authority by forcing states into an all-or-nothing choice by threatening to revoke all of their Medicaid funding if they did not participate in the Medicaid expansion. Russell remembers that a decade ago several states made challenges to a number of important civil rights statutes that condition receipt of federal funds on the state's agreement to abide by non-discrimination principles in the federally funded programs. "These statutes include Title IX (sex discrimination in federally funded education programs), Title IV (race discrimination in any federally funded program), and the Rehabilitation Act (disability discrimination in federally funded programs). States argued that by threatening to take away all of a program's funds if the State's didn't agree to abide by these statutes, Congress was engaging in unconstitutional coercion."[78]

David B. Kopel, an adjunct professor of constitutional law at University of Denver, said that Supreme Court ruling is the court's most important ruling in defining the limits of Congress's power under the Spending Clause, because this clause must, like Congress's other powers, conform to the principles of state sovereignty that are embodied in the United States Constitution, the Tenth Amendment and Eleventh Amendment. According to him this has a tremendous impact on state budgets: "Today (and from now on!), states do not need to provide Medicaid to able-bodied childless adults. Likewise, states today have discretion about whether to provide Medicaid to middle-class parents. Undoubtedly, some states will choose to participate in the ACA's massive expansion of medical welfare, but fiscally responsible states now have the choice not to."[79]

University of Michigan law professor Samuel Bagenstos told The Atlantic that the Court's holding on the Medicaid Expansion could be a landmark decision in federalism jurisprudence, if the Medicaid issue were not in the same case as the individual mandate. He deemed it "a big deal"[80] that the Supreme Court has for the first time struck down a condition on federal spending on the grounds that it coerced the states. In his opinion this means that a number of federal statutes that had not really been subject to effective legal challenge before can now be challenged by the states.[80]

Fairleigh Dickinson University's PublicMind conducted research on the public's constitutional perspective by asking registered voters about key legal issues brought up by PPACA litigation through two surveys based upon a random sampling of the United States population. The authors, Bruce G. Peabody and Peter J. Woolley contend that, through public response on this case, that despite claims of an ignorant and uninformed public, the masses can be confident, properly conflicted, and principled when considering major controversies and dilemmas.[81] Rather than polling the public on raw personal opinion, the study conducted inquired into the random voters legal judgement on PPACA constitutionality. For example, 56% of Americans (as of February 2012) deemed that Congress does not have the legal right to require everyone to have health insurance, while 34% believed that such a mandate was legally permissible.

Subsequent cases

Sebelius was the centerpoint of the third legal challenge to the PPACA to reach the Supreme Court in California v. Texas, to be heard in the 2020–21 term. In 2017, Congress passed the Tax Cuts and Jobs Act that reduced the health insurance requirement of the PPACA to US$0 from 2019 onward, effectively eliminating the individual mandate. Texas and several states sued the federal government, arguing on the basis of Sebelius that with mandate eliminated, the entire PPACA was unconstitutional. A district court agreed with this, which was upheld on a challenge by California and other states to the Fifth Circuit, stepping in when the government declined to challenge the ruling. The Supreme Court has agreed to hear the case to consider not only if the elimination of the individual mandate makes the ACA unconstitutional, but factors related to the severability of the individual mandate from other provisions in the PPACA, as well as whether California has standing.[82]

See also