National Federation of Independent Businesses v. Sebelius
By Leland Ware
On June 28, 2012, the Supreme Court issued its "Obama Care" decision. This case involved constitutional challenges to two provisions of the Patient Protection and Affordable Care Act commonly referred to as the individual mandate and the Medicaid expansion. The individual mandate requires most Americans to maintain “minimum essential” health insurance. Those who do not comply with the mandate must make payment which the Act describes as a “penalty.” The Medicaid expansion extends eligibility to include families making 33 percent above the poverty line. The maximum income to qualify would go from $23,050 per year for a family of four to nearly $31,000.
The Court upheld the law under Congress’s taxing powers. However, in a significant departure from longstanding precedent, the Court also held that the Act exceeded the authority granted to Congress by the Commerce Clause. The Commerce Clause gives Congress the power “to regulate commerce with foreign nations, and among the several states, and with the Indian tribes.” Chief Justice Roberts found that cases construing the Commerce Clause have described the power as reaching only “activity.” The individual mandate, in contrast, compels individuals to become active in commerce by purchasing a product on the ground that their failure to do so affects interstate commerce. The majority held Commerce Clause cannot be applied to inactivity. Doing so would give the Government almost unfettered power to compel citizens to act as the Government would have them act. Congress could, for example, address the nation's dietary problem by ordering everyone to buy vegetables.
The Government also argued that the mandate is within Congress’s enumerated power to “lay and collect Taxes.” The majority found that if an individual does not maintain health insurance, the only consequence is that he must make an additional payment to the IRS when he pays his taxes. Congress had the power to impose the penalty under its taxing power.
The Court also held that the Medicaid expansion violates the Constitution by threatening States with the loss of their existing Medicaid funding if they decline to comply with the expansion. When Congress threatens to terminate other grants as a means of pressuring the States to accept a Spending Clause program, the legislation runs counter to this Nation’s system of federalism. Under the ruling each state can decide if it wants to expand its Medicaid rolls.
This was a 5-4 decision in which Chief Justice Roberts disagreed with Justices Scalia, Alito, Thomas and Kennedy, the Court’s conservative faction. It is significant that Roberts, a conservative, voted with Justices Breyer, Ginsburg, Sotomayor and Kagan but in doing so, he interpreted the Commerce Clause in a way restricts Congressional power. This is inconsistent with 75 years of precedent and invites challenges to many federal laws that rely on the authority granted by Commerce Clause including the Civil rights laws of the 1960s. This may signal an advance in the broader Federalist agenda of constraining Congressional powers and granting more authority to states.
About the Author
Leland Ware, a member of the Board of the Southern Regional Council, is Louis B. Redding Chair and Professor for the Study of Law and Public Policy at the University of Delaware.He is the author of numerous publications, and he served as co-editor of the recently-published volume, Choosing Equality: Essays and Narratives on the Desegregation Experience.