The controlling opinion, written by Chief Justice John Roberts, upheld the mandate as a tax, although concluded it was not valid as an exercise of Congress’ commerce clause power. Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan joined in the 5 to 4 outcome.
The decision in National Federation of Independent Business v. Sebelius comes as something of a surprise after the generally hostile reception the law received during the six hours of oral arguments held over three days in March. But by siding with the court’s four Democratic appointees, Chief Justice Roberts avoided the delegitimizing taint of politics that surrounds a party-line vote while passing Obamacare’s fate back to the elected branches. GOP candidates and incumbents will surely spend the rest of the 2012 campaign season running against the Supreme Court and for repeal of the law.
Health Care Ruling (FULL TEXT)
(Slip Opinion) [Some Partial Text Below]
OCTOBER TERM, 2011
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
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 FOR THE ELEVENTH CIRCUIT
No. 11–393. Argued March 26, 27, 28, 2012—Decided June 28, 2012*
In 2010, Congress enacted the Patient Protection and Affordable CareAct in order to increase the number of Americans covered by health insurance 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 ofsatisfying the requirement is to purchase insurance from a private company. Beginning in 2014, those who do not comply with the mandate must make a “[s]hared responsibility payment” to the Federal Government. §5000A(b)(1). The Act provides that this “penalty”will be paid to the Internal Revenue Service with an individual’s taxes, and “shall be assessed and collected in the same manner” as tax penalties. §§5000A(c), (g)(1).Another key provision of the Act is the Medicaid expansion. The current Medicaid program offers federal funding to States to assist pregnant women, children, needy families, the blind, the elderly, and the 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 Services et al. v. Florida et al., and No. 11–400, Florida et al. v. Department of Health and Human Services et al., also on certiorari to the same court. 2 NATIONAL FEDERATION OF INDEPENDENT BUSINESS v. SEBELIUS Syllabus
ample, the Act requires state programs to provide Medicaid coverage by 2014 to adults with incomes up to 133 percent of the federal poverty level, whereas many States now cover adults with children onlyif their income is considerably lower, and do not cover childless adults at 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 requirements, it may lose not only the federal funding for those requirements, but all of its federal Medicaid funds. §1396c.
Twenty-six States, several individuals, and the National Federation 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 Circuit upheld the Medicaid expansion as a valid exercise of Congress’s spending power, but concluded that Congress lacked authority to enact the individual mandate. Finding the mandate severable from theAct’s other provisions, the Eleventh Circuit left the rest of the Act intact.
The judgment is affirmed in part and reversed in part.
648 F. 3d 1235, affirmed in part and reversed in part.
HIEF JUSTICE ROBERTS delivered the opinion of the Court with respect 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 maintained 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 present challenge seeks to restrain the collection of the shared responsibility 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 label cannot control whether the payment is a tax for purposes of the Constitution, but it does determine the application of the Anti-Injunction Act. The Anti-Injunction Act therefore does not bar this suit. Pp. 11–
HIEF JUSTICE ROBERTS concluded in Part III–A that the individual mandate is not a valid exercise of Congress’s power under the Commerce 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 regulatecommerce presupposes the existence of commercial activity to be regulated. This Court’s precedent reflects this understanding: As expansive as this Court’s cases construing the scope of the commerce 3 Cite as: 567 U. S. ____ (2012) Syllabus
power have been, they uniformly describe the power as reaching “activity.”
E.g., United States v. Lopez, 514 U. S. 549, 560. The individual mandate, however, does not regulate existing commercial activity. 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 regulate individuals precisely
because they are doing nothing would open a new and potentially vast domain to congressional authority. Congress 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 and doing nothing. They gave Congress the power to regulate commerce, not to compel it. Ignoring that distinction would undermine the principle that the Federal Government is a government of limited andenumerated powers. The individual mandate thus cannot be sustained under Congress’s power to “regulate Commerce.” Pp. 16–27.
(b) Nor can the individual mandate be sustained under the Necessary and Proper Clause as an integral part of the Affordable CareAct’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, 560
U. S. ___. The individual mandate, by contrast, vests Congress withthe extraordinary ability to create the necessary predicate to the exercise of an enumerated power and draw within its regulatory scope those who would otherwise be outside of it. Even if the individual mandate is “necessary” to the Affordable Care Act’s other reforms, such an expansion of federal power is not a “proper” means for making those reforms effective. Pp. 27–30.
HIEF JUSTICE ROBERTS concluded in Part III–B that the individual mandate must be construed as imposing a tax on those who do not 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 reasons explained, the Commerce Clause does not give Congress that power.It is therefore necessary to turn to the Government’s alternative argument: that the mandate may be upheld as within Congress’s power to “lay and collect Taxes.” Art. I, §8, cl. 1. In pressing its taxingpower argument, the Government asks the Court to view the mandate as imposing a tax on those who do not buy that product. Because “every reasonable construction must be resorted to, in order tosave a statute from unconstitutionality,”
Hooper v. California, 155
U. S. 648, 657, the question is whether it is “fairly possible” to inter4 NATIONAL FEDERATION OF INDEPENDENT BUSINESS
v. SEBELIUS Syllabus
pret the mandate as imposing such a tax,
Crowell v. Benson, 285
U. S. 22, 62. Pp. 31–32.
HIEF JUSTICE ROBERTS delivered the opinion of the Court with respect to Part III–C, concluding that the individual mandate may beupheld as within Congress’s power under the Taxing Clause. Pp. 33–
(a) The Affordable Care Act describes the “[s]hared responsibilitypayment” as a “penalty,” not a “tax.” That label is fatal to the application of the Anti-Injunction Act. It does not, however, control whether an exaction is within Congress’s power to tax. In answering that constitutional question, this Court follows a functional approach,”[d]isregarding the designation of the exaction, and viewing its substance and application.”
United States v. Constantine, 296 U. S. 287,
294. Pp. 33–35.
(b) Such an analysis suggests that the shared responsibilitypayment may for constitutional purposes be considered a tax. The payment is not so high that there is really no choice but to buy healthinsurance; the payment is not limited to willful violations, as penalties for unlawful acts often are; and the payment is collected solely by the IRS through the normal means of taxation. Cf.
Bailey v. Drexel Furniture Co., 259 U. S. 20, 36–37. None of this is to say that payment is not intended to induce the purchase of health insurance. But the mandate need not be read to declare that failing to do so is unlawful. Neither the Affordable Care Act nor any other law attaches negative legal consequences to not buying health insurance, beyond requiring a payment to the IRS. And Congress’s choice of language—stating that individuals “shall” obtain insurance or pay a “penalty”—does not require reading §5000A as punishing unlawful conduct. It may also be read as imposing a tax on those who go without insurance. See New York v. United States, 505 U. S. 144, 169–174. Pp. 35–40.
(c) Even if the mandate may reasonably be characterized as atax, it must still comply with the Direct Tax Clause, which provides:”No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken.” Art. I, §9, cl. 4. A tax on going without health insurance is not like acapitation or other direct tax under this Court’s precedents. It therefore need not be apportioned so that each State pays in proportion toits population. Pp. 40–41.
HIEF JUSTICE ROBERTS, joined by JUSTICE BREYER and JUSTICE KAGAN, concluded in Part IV 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. Pp. 45–58. 5 Cite as: 567 U. S. ____ (2012)
(a) The Spending Clause grants Congress the power “to pay theDebts and provide for the . . . general Welfare of the United States.” Art. I, §8, cl. 1. Congress may use this power to establish cooperative state-federal Spending Clause programs. The legitimacy of SpendingClause legislation, however, depends on whether a State voluntarily and knowingly accepts the terms of such programs.
Pennhurst State School and Hospital v. Halderman, 451 U. S. 1, 17. “[T]he Constitution simply does not give Congress the authority to require the States to regulate.” New York v. United States, 505 U. S. 144, 178. When Congress threatens to terminate other grants as a means of pressuring the States to accept a Spending Clause program, the legislationruns counter to this Nation’s system of federalism. Cf. South Dakota
Dole, 483 U. S. 203, 211. Pp. 45–51.
(b) Section 1396c gives the Secretary of Health and Human Services the authority to penalize States that choose not to participate inthe Medicaid expansion by taking away their existing Medicaid funding. 42 U. S. C. §1396c. The threatened loss of over 10 percent of a State’s overall budget is economic dragooning that leaves the Stateswith no real option but to acquiesce in the Medicaid expansion. The Government claims that the expansion is properly viewed as only a modification of the existing program, and that this modification ispermissible because Congress reserved the “right to alter, amend, orrepeal any provision” of Medicaid. §1304. But the expansion accomplishes a shift in kind, not merely degree. The original program wasdesigned to cover medical services for particular categories of vulnerable individuals. Under the Affordable Care Act, Medicaid is transformed into a program to meet the health care needs of the entirenonelderly population with income below 133 percent of the povertylevel. A State could hardly anticipate that Congress’s reservation of the right to “alter” or “amend” the Medicaid program included the power to transform it so dramatically. The Medicaid expansion thusviolates the Constitution by threatening States with the loss of theirexisting Medicaid funding if they decline to comply with the expansion. Pp. 51–55.
(c) The constitutional violation is fully remedied by precluding the Secretary from applying §1396c to withdraw existing Medicaidfunds for failure to comply with the requirements set out in the expansion. See §1303. The other provisions of the Affordable Care Act are not affected. Congress would have wanted the rest of the Act to stand, had it known that States would have a genuine choice whetherto participate in the Medicaid expansion. Pp. 55–58.
USTICE GINSBURG, joined by JUSTICE SOTOMAYOR, is of the view that the Spending Clause does not preclude the Secretary from withholding Medicaid funds based on a State’s refusal to comply with the 6 NATIONAL FEDERATION OF INDEPENDENT BUSINESS v. SEBELIUS Syllabus
expanded Medicaid program. But given the majority view, she agrees with T
HE CHIEF JUSTICE’s conclusion in Part IV–B that the Medicaid Act’s severability clause, 42 U. S. C. §1303, determines theappropriate remedy. Because THE CHIEF JUSTICE finds the withholding—not the granting—of federal funds incompatible with the Spending Clause, Congress’ extension of Medicaid remains available to any State that affirms its willingness to participate. Even absent §1303’scommand, the Court would have no warrant to invalidate the fundingoffered by the Medicaid expansion, and surely no basis to tear downthe ACA in its entirety. When a court confronts an unconstitutional statute, its endeavor must be to conserve, not destroy, the legislation. See, e.g., Ayotte v. Planned Parenthood of Northern New Eng., 546
U. S. 320, 328–330. Pp. 60–61.
OBERTS, C. J., announced the judgment of the Court and delivered the opinion of the Court with respect to Parts I, II, and III–C, in which GINSBURG, BREYER, SOTOMAYOR, and KAGAN, JJ., joined; an opinion withrespect to Part IV, in which BREYER and KAGAN, JJ., joined; and an opinion with respect to Parts III–A, III–B, and III–D. GINSBURG, J., filed an opinion concurring in part, concurring in the judgment in part,and dissenting in part, in which SOTOMAYOR, J., joined, and in whichBREYER and KAGAN, JJ., joined as to Parts I, II, III, and IV. SCALIA, KENNEDY, THOMAS, and ALITO, JJ., filed a dissenting opinion. THOMAS, J., filed a dissenting opinion. _________________ _________________ 1 Cite as: 567 U. S. ____ (2012)
Opinion of R
OBERTS, C. J.
NOTICE: This opinion is subject to formal revision before publication in thepreliminary print of the United States Reports. Readers are requested tonotify the Reporter of Decisions, Supreme Court of the United States, Washington, D. C. 20543, of any typographical or other formal errors, in orderthat corrections may be made before the preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
Nos. 11–393, 11–398 and 11–400
NATIONAL FEDERATION OF INDEPENDENT BUSINESS,
ET AL., PETITIONERS 11–393 v. KATHLEEN SEBELIUS, SECRETARY OF HEALTH AND HUMAN SERVICES, ET AL.
DEPARTMENT OF HEALTH AND HUMAN SERVICES,
ET AL., PETITIONERS 11–398 v. FLORIDA ET AL.
ET AL., PETITIONERS 11–400 v. DEPARTMENT OF HEALTH AND HUMAN SERVICES ET AL.
ON WRITS OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT
[June 28, 2012]
HIEF JUSTICE ROBERTS announced the judgment of theCourt and delivered the opinion of the Court with respect to Parts I, II, and III–C, an opinion with respect to Part IV, in which JUSTICE BREYER and JUSTICE KAGAN join, and an opinion with respect to Parts III–A, III–B, and III–D.
Today we resolve constitutional challenges to two provisions of the Patient Protection and Affordable Care Act of
2 NATIONAL FEDERATION OF INDEPENDENT BUSINESS v. SEBELIUS Opinion of ROBERTS, C. J.
2010: the individual mandate, which requires individuals to purchase a health insurance policy providing a minimum level of coverage; and the Medicaid expansion, which gives funds to the States on the condition that they provide specified health care to all citizens whose income falls below a certain threshold. We do not consider whether the Act embodies sound policies. That judgment is entrusted to the Nation’s elected leaders. We ask only whether Congress has the power under the Constitution to enactthe challenged provisions.
In our federal system, the National Government possesses only limited powers; the States and the peopleretain the remainder. Nearly two centuries ago, Chief Justice Marshall observed that “the question respectingthe extent of the powers actually granted” to the Federal Government “is perpetually arising, and will probably continue to arise, as long as our system shall exist.”
McCulloch v. Maryland, 4 Wheat. 316, 405 (1819). In this case we must again determine whether the Constitution grants Congress powers it now asserts, but which manyStates and individuals believe it does not possess. Resolving this controversy requires us to examine both the limits of the Government’s power, and our own limited role inpolicing those boundaries.
The Federal Government “is acknowledged by all to be one of enumerated powers.”
Ibid. That is, rather than granting general authority to perform all the conceivable functions of government, the Constitution lists, orenumerates, the Federal Government’s powers. Congressmay, for example, “coin Money,” “establish Post Offices,”and “raise and support Armies.” Art. I, §8, cls. 5, 7, 12. The enumeration of powers is also a limitation of powers, because “[t]he enumeration presupposes something not enumerated.” Gibbons v. Ogden, 9 Wheat. 1, 195 (1824).The Constitution’s express conferral of some powersmakes clear that it does not grant others. And the Federal 3 Cite as: 567 U. S. ____ (2012)
Opinion of R
OBERTS, C. J.
Government “can exercise only the powers granted to it.”
McCulloch, supra, at 405.
Today, the restrictions on government power foremost in many Americans’ minds are likely to be affirmative prohibitions, such as contained in the Bill of Rights. These affirmative prohibitions come into play, however, only wherethe Government possesses authority to act in the firstplace. If no enumerated power authorizes Congress topass a certain law, that law may not be enacted, even if it would not violate any of the express prohibitions in the Bill of Rights or elsewhere in the Constitution.
Indeed, the Constitution did not initially include a Bill of Rights at least partly because the Framers felt the enumeration of powers sufficed to restrain the Government.As Alexander Hamilton put it, “the Constitution is itself,in every rational sense, and to every useful purpose,
A BILL OF RIGHTS.” The Federalist No. 84, p. 515 (C. Rossiter ed. 1961). And when the Bill of Rights was ratified, it made express what the enumeration of powers necessarily implied: “The powers not delegated to the United States by the Constitution . . . are reserved to the Statesrespectively, or to the people.” U. S. Const., Amdt. 10. The Federal Government has expanded dramatically overthe past two centuries, but it still must show that a constitutional grant of power authorizes each of its actions. See, e.g., United States v. Comstock, 560 U. S. ___ (2010).
The same does not apply to the States, because the Constitution is not the source of their power. The Constitution may restrict state governments—as it does, for example, by forbidding them to deny any person the equal protection of the laws. But where such prohibitions do not apply, state governments do not need constitutional authorization to act. The States thus can and do performmany of the vital functions of modern government—punishing street crime, running public schools, and zoning property for development, to name but a few—even though
4 NATIONAL FEDERATION OF INDEPENDENT BUSINESS v. SEBELIUS Opinion of ROBERTS, C. J.
the Constitution’s text does not authorize any governmentto do so. Our cases refer to this general power of governing, possessed by the States but not by the Federal Government, as the “police power.” See,
e.g., United States v. Morrison, 529 U. S. 598, 618–619 (2000).
“State sovereignty is not just an end in itself: Rather,federalism secures to citizens the liberties that derive from the diffusion of sovereign power.”
New York v. United States, 505 U. S. 144, 181 (1992) (internal quotationmarks omitted). Because the police power is controlled by50 different States instead of one national sovereign, the facets of governing that touch on citizens’ daily lives are normally administered by smaller governments closer tothe governed. The Framers thus ensured that powers which “in the ordinary course of affairs, concern the lives,liberties, and properties of the people” were held by governments more local and more accountable than a dis- tant federal bureaucracy. The Federalist No. 45, at 293
(J. Madison). The independent power of the States also serves as a check on the power of the Federal Government: “By denying any one government complete jurisdiction over all the concerns of public life, federalism protects theliberty of the individual from arbitrary power.”
Bond v. United States, 564 U. S. ___, ___ (2011) (slip op., at 9–10).
This case concerns two powers that the Constitution does grant the Federal Government, but which must beread carefully to avoid creating a general federal authority akin to the police power. The Constitution authorizes Congress to “regulate Commerce with foreign Nations, andamong the several States, and with the Indian Tribes.”Art. I, §8, cl. 3. Our precedents read that to mean that Congress may regulate “the channels of interstate commerce,” “persons or things in interstate commerce,” and “those activities that substantially affect interstate commerce.”
Morrison, supra, at 609 (internal quotation marksomitted). The power over activities that substantially 5 Cite as: 567 U. S. ____ (2012)
Opinion of R
OBERTS, C. J.
affect interstate commerce can be expansive. That powerhas been held to authorize federal regulation of such seemingly local matters as a farmer’s decision to grow wheatfor himself and his livestock, and a loan shark’s extortionate collections from a neighborhood butcher shop. See
Wickard v. Filburn, 317 U. S. 111 (1942); Perez v. United States, 402 U. S. 146 (1971).
Congress may also “lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for thecommon Defence and general Welfare of the United States.” U. S. Const., Art. I, §8, cl. 1. Put simply, Congress may tax and spend. This grant gives the FederalGovernment considerable influence even in areas where it cannot directly regulate. The Federal Government may enact a tax on an activity that it cannot authorize, forbid,or otherwise control. See,
e.g., License Tax Cases, 5 Wall. 462, 471 (1867). And in exercising its spending power,Congress may offer funds to the States, and may condition those offers on compliance with specified conditions. See, e.g., College Savings Bank v. Florida Prepaid Postsecondary Ed. Expense Bd., 527 U. S. 666, 686 (1999). These offers may well induce the States to adopt policies thatthe Federal Government itself could not impose. See, e.g., South Dakota v. Dole, 483 U. S. 203, 205–206 (1987) (conditioning federal highway funds on States raising their drinking age to 21).
The reach of the Federal Government’s enumerated powers is broader still because the Constitution authorizes Congress to “make all Laws which shall be necessary andproper for carrying into Execution the foregoing Powers.”Art. I, §8, cl. 18. We have long read this provision to giveCongress great latitude in exercising its powers: “Let theend be legitimate, let it be within the scope of the constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist with the letter and spirit of the constitution, are