On June 28, 2012, the U.S. Supreme Court primarily upheld the Affordable Care Act. In a 5-4 ruling, the Court found the Act’s individual health insurance mandate, which requires most Americans to obtain health insurance by 2014, is within Congress’ constitutional taxing power.
The ruling initially holds that under the Commerce Clause (a Constitutional provision enabling the federal government to regulate interstate commerce), Congress does not have the power to force people to engage in commerce by requiring the purchase of health insurance. Writing for the majority, Chief Justice John Roberts stated, “[t]he individual mandate cannot be upheld as an exercise of Congress’s power under the Commerce Clause. That Clause authorizes Congress to regulate interstate commerce, not to order individuals to engage in it.”
Despite the court’s finding that the Commerce Clause does not authorize the mandate, however, the court ruled the individual mandate can stand, finding that the penalty the law would impose on people who fail to purchase insurance is essentially a tax. The opinion holds, “it is reasonable to construe what Congress has done as increasing taxes on those who have a certain amount of income, but [who] choose to go without health insurance. Such legislation is within Congress’s power to tax.”
The Court objected to one provision of the law related to Medicaid expansion. The Court found that the federal government cannot withdraw existing Medicaid funding from states that decide not to participate in an expansion of Medicaid eligibility that the law would require. Roberts wrote, “[a]s for the Medicaid expansion, that portion of the Affordable Care Act violates the Constitution by threatening existing Medicaid funding. Congress has no authority to order the States to regulate according to its instructions. Congress may offer the States grants and require the States to comply with accompanying conditions, but the States must have a genuine choice whether to accept the offer.”
Justices Kennedy, Scalia, Thomas, and Alito issued a dissent, in which they characterized the majority’s opinion as a “vast judicial overreaching” and one that “makes enactment of sensible health-care regulation more difficult, since Congress cannot start afresh but must take as its point of departure a jumble of now senseless provisions, provisions that certain interests favored under the Court’s new design will struggle to retain.”
ACA will continue to monitor and update members on the progression of the Affordable Care Act. To learn more about the ruling, members can access a copy of the opinion on the Supreme Court’s website.