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Obamacare Ruling 6-28-12

Obamacare Ruling 6-28-12

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Published by Forbes
Supreme Court decision on the Affordable Care Act
Supreme Court decision on the Affordable Care Act

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Published by: Forbes on Jun 29, 2012
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07/08/2013

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1
(Slip Opinion)
OCTOBER TERM, 2011Syllabus
NOTE: Where it is feasible, a syllabus (headnote) will be released, as isbeing done in connection with this case, at the time the opinion is issued.The syllabus constitutes no part of the opinion of the Court but has beenprepared by the Reporter of Decisions for the convenience of the reader.See
United States
v.
 Detroit Timber & Lumber Co.,
200 U. S. 321, 337.
SUPREME COURT OF THE UNITED STATES
Syllabus
NATIONAL FEDERATION OF INDEPENDENT
BUSINESS
ET AL
.
v
. SEBELIUS, SECRETARY OF
HEALTH AND HUMAN SERVICES,
ET AL
.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FORTHE ELEVENTH CIRCUITNo. 11–393. Argued March 26, 27, 28, 2012—Decided June 28, 2012*In 2010, Congress enacted the Patient Protection and Affordable Care Act in order to increase the number of Americans covered by healthinsurance and decrease the cost of health care. One key provision isthe individual mandate, which requires most Americans to maintain“minimum essential” health insurance coverage. 26 U. S. C. §5000A.For individuals who are not exempt, and who do not receive healthinsurance through an employer or government program, the means of satisfying the requirement is to purchase insurance from a privatecompany. Beginning in 2014, those who do not comply with themandate must make a “[s]hared responsibility payment” to the Fed-eral Government. §5000A(b)(1). The Act provides that this “penalty”will be paid to the Internal Revenue Service with an individual’s tax-es, and “shall be assessed and collected in the same manner” as taxpenalties. §§5000A(c), (g)(1). Another key provision of the Act is the Medicaid expansion. Thecurrent Medicaid program offers federal funding to States to assistpregnant women, children, needy families, the blind, the elderly, andthe disabled in obtaining medical care. 42 U. S. C. §1396d(a). The Affordable Care Act expands the scope of the Medicaid program andincreases the number of individuals the States must cover. For ex- —————— *Together with No. 11–398,
 Department of Health and Human Ser-vices et al.
v.
Florida et al.,
and No. 11–400,
Florida et al.
v.
 Departmentof Health and Human Services et al.,
also on certiorari to the samecourt.
 
 
2 NATIONAL FEDERATION OF INDEPENDENT
BUSINESS
v.
SEBELIUS
Syllabus
ample, the Act requires state programs to provide Medicaid coverageby 2014 to adults with incomes up to 133 percent of the federal pov-erty level, whereas many States now cover adults with children onlyif their income is considerably lower, and do not cover childless adultsat all. §1396a(a)(10)(A)(i)(VIII). The Act increases federal funding tocover the States’ costs in expanding Medicaid coverage. §1396d(y)(1).But if a State does not comply with the Act’s new coverage require-ments, it may lose not only the federal funding for those require-ments, but all of its federal Medicaid funds. §1396c.Twenty-six States, several individuals, and the National Federa-tion of Independent Business brought suit in Federal District Court,challenging the constitutionality of the individual mandate and theMedicaid expansion. The Court of Appeals for the Eleventh Circuitupheld the Medicaid expansion as a valid exercise of Congress’sspending power, but concluded that Congress lacked authority to en-act the individual mandate. Finding the mandate severable from the Act’s other provisions, the Eleventh Circuit left the rest of the Act in-tact.
Held:
The judgment is affirmed in part and reversed in part.648 F. 3d 1235, affirmed in part and reversed in part.1. C
HIEF
J
USTICE
R
OBERTS
delivered the opinion of the Court withrespect to Part II, concluding that the Anti-Injunction Act does notbar this suit.The Anti-Injunction Act provides that “no suit for the purpose of restraining the assessment or collection of any tax shall be main-tained in any court by any person,” 26 U. S. C. §7421(a), so that thosesubject to a tax must first pay it and then sue for a refund. The pre-sent challenge seeks to restrain the collection of the shared responsi-bility payment from those who do not comply with the individualmandate. But Congress did not intend the payment to be treated asa “tax” for purposes of the Anti-Injunction Act. The Affordable Care Act describes the payment as a “penalty,” not a “tax.” That labelcannot control whether the payment is a tax for purposes of the Con-stitution, but it does determine the application of the Anti-Injunction Act. The Anti-Injunction Act therefore does not bar this suit. Pp. 11– 15.2. C
HIEF
J
USTICE
R
OBERTS
concluded in Part III–A that the indi-vidual mandate is not a valid exercise of Congress’s power under theCommerce Clause and the Necessary and Proper Clause. Pp. 16–30.(a) The Constitution grants Congress the power to
regulate
Commerce.” Art. I, §8, cl. 3 (emphasis added). The power to
regulate
commerce presupposes the existence of commercial activity to be reg-ulated. This Court’s precedent reflects this understanding: As ex-pansive as this Court’s cases construing the scope of the commerce
 
 
3Cite as: 567 U. S. ____ (2012)Syllabuspower have been, they uniformly describe the power as reaching “ac-tivity.”
E.g., United States
v.
Lopez
, 514 U. S. 549, 560. The individ-ual mandate, however, does not regulate existing commercial activi-ty. It instead compels individuals to
become
active in commerce bypurchasing a product, on the ground that their failure to do so affectsinterstate commerce.Construing the Commerce Clause to permit Congress to regulateindividuals precisely
because
they are doing nothing would open anew and potentially vast domain to congressional authority. Con-gress already possesses expansive power to regulate what people do.Upholding the Affordable Care Act under the Commerce Clausewould give Congress the same license to regulate what people do notdo. The Framers knew the difference between doing something anddoing nothing. They gave Congress the power to
regulate
commerce,not to
compel
it. Ignoring that distinction would undermine the prin-ciple that the Federal Government is a government of limited andenumerated powers. The individual mandate thus cannot be sus-tained under Congress’s power to “regulate Commerce.” Pp. 16–27.(b) Nor can the individual mandate be sustained under the Nec-essary and Proper Clause as an integral part of the Affordable Care Act’s other reforms. Each of this Court’s prior cases upholding lawsunder that Clause involved exercises of authority derivative of, andin service to, a granted power.
E.g., United States
v.
Comstock
, 560U. S. ___. The individual mandate, by contrast, vests Congress withthe extraordinary ability to create the necessary predicate to the ex-ercise of an enumerated power and draw within its regulatory scopethose who would otherwise be outside of it. Even if the individualmandate is “necessary” to the Affordable Care Act’s other reforms,such an expansion of federal power is not a “proper” means for mak-ing those reforms effective. Pp. 27–30.3. C
HIEF
J
USTICE
R
OBERTS
concluded in Part III–B that the individ-ual mandate must be construed as imposing a tax on those who donot have health insurance, if such a construction is reasonable.The most straightforward reading of the individual mandate is thatit commands individuals to purchase insurance. But, for the reasonsexplained, the Commerce Clause does not give Congress that power.It is therefore necessary to turn to the Government’s alternative ar-gument: that the mandate may be upheld as within Congress’s powerto “lay and collect Taxes.” Art. I, §8, cl. 1. In pressing its taxingpower argument, the Government asks the Court to view the man-date as imposing a tax on those who do not buy that product. Be-cause “every reasonable construction must be resorted to, in order tosave a statute from unconstitutionality,”
Hooper
v.
California
, 155U. S. 648, 657, the question is whether it is “fairly possible” to inter-

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