Source: https://www.docketalarm.com/cases/Supreme_Court/11-393/National_Federation_of_Independent_Business_et_al._Petitioners_v._Kathleen_Sebelius_Secretary_of_Health_and_Human_Services_et_al./06-28-2012-Adjudged_to_be_AFFIRMED_IN_PART_REVERSED/
Timestamp: 2020-08-08 14:48:24
Document Index: 474080737

Matched Legal Cases: ['§5000', '§5000', '§5000', '§1396', '§1396', '§1396', '§1396', '§7421', '§8', '§8', '§5000', '§9', '§8', '§1396', '§1304', '§1396', '§1303', '§1303', '§1303', '§8', '§8', '§8', '§8', '§5000', '§5000', '§5000', '§5000', '§5000', '§18022', '§5000', '§5000', '§5000', '§8']

National Federation of Independent Business, et al., Petitioners v. Kathleen Sebelius, Secretary of Health and Human Services, et al., 11-393, Adjudged to be AFFIRMED IN PART REVERSED (U.S. Jun. 28, 2
` OCTOBER TERM, 2011
`NATIONAL FEDERATION OF INDEPENDENT
`BUSINESS ET AL. v. SEBELIUS, SECRETARY OF
` HEALTH AND HUMAN SERVICES, ET AL.
`No. 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 health
`insurance and decrease the cost of health care. One key provision is
`the 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 health
`insurance through an employer or government program, the means of
`satisfying 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 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 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 and
`increases 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. Department
`of Health and Human Services et al., also on certiorari to the same
`BUSINESS v. SEBELIUS
`ample, the Act requires state programs to provide Medicaid coverage
`by 2014 to adults with incomes up to 133 percent of the federal pov-
`erty level, whereas many States now cover adults with children only
`if their income is considerably lower, and do not cover childless adults
`at all. §1396a(a)(10)(A)(i)(VIII). The Act increases federal funding to
`cover 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 the
`Medicaid 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 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. CHIEF JUSTICE ROBERTS delivered the opinion of the Court with
`respect to Part II, concluding that the Anti-Injunction Act does not
` bar 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 those
`subject 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 individual
`mandate. But Congress did not intend the payment to be treated as
`a “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 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–
` 2. CHIEF JUSTICE ROBERTS concluded in Part III–A that the indi-
`vidual 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 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
`Cite as: 567 U. S. ____ (2012)
`power 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 by
`purchasing a product, on the ground that their failure to do so affects
`interstate 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. Con-
`gress already possesses expansive power to regulate what people do.
`Upholding the Affordable Care Act under the Commerce Clause
`would give Congress the same license to regulate what people do not
`do. 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 prin-
`ciple that the Federal Government is a government of limited and
`enumerated 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 laws
`under that Clause involved exercises of authority derivative of, and
`in service to, a granted power. E.g., United States v. Comstock, 560
`U. S. ___. The individual mandate, by contrast, vests Congress with
`the extraordinary ability to create the necessary predicate to the ex-
`ercise 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 mak-
`ing those reforms effective. Pp. 27–30.
`3. CHIEF JUSTICE ROBERTS concluded in Part III–B that the individ-
`ual 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 that
`it 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 ar-
`gument: that the mandate may be upheld as within Congress’s power
`to “lay and collect Taxes.” Art. I, §8, cl. 1. In pressing its taxing
`power 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 to
`save a statute from unconstitutionality,” Hooper v. California, 155
`U. S. 648, 657, the question is whether it is “fairly possible” to inter-
`pret the mandate as imposing such a tax, Crowell v. Benson, 285
`U. S. 22, 62. Pp. 31–32.
`4. CHIEF JUSTICE ROBERTS delivered the opinion of the Court with
`respect to Part III–C, concluding that the individual mandate may be
`upheld as within Congress’s power under the Taxing Clause. Pp. 33–
`(a) The Affordable Care Act describes the “[s]hared responsibility
`payment” as a “penalty,” not a “tax.” That label is fatal to the appli-
`cation 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 sub-
`stance and application.” United States v. Constantine, 296 U. S. 287,
`294. Pp. 33–35.
`(b) Such an analysis suggests that the shared responsibility
`payment may for constitutional purposes be considered a tax. The
`payment is not so high that there is really no choice but to buy health
`insurance; the payment is not limited to willful violations, as penal-
`ties 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 pay-
`ment 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 un-
`lawful. 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 insur-
`ance. 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 a
`tax, 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 a
`capitation or other direct tax under this Court’s precedents. It there-
`fore need not be apportioned so that each State pays in proportion to
`its population. Pp. 40–41.
`5. CHIEF 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.
`(a) The Spending Clause grants Congress the power “to pay the
`Debts 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 Spending
`Clause 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 Constitu-
`tion 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 pressur-
`ing the States to accept a Spending Clause program, the legislation
`runs counter to this Nation’s system of federalism. Cf. South Dakota
`v. Dole, 483 U. S. 203, 211. Pp. 45–51.
`(b) Section 1396c gives the Secretary of Health and Human Ser-
`vices the authority to penalize States that choose not to participate in
`the Medicaid expansion by taking away their existing Medicaid fund-
`ing. 42 U. S. C. §1396c. The threatened loss of over 10 percent of a
`State’s overall budget is economic dragooning that leaves the States
`with 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 is
`permissible because Congress reserved the “right to alter, amend, or
`repeal any provision” of Medicaid. §1304. But the expansion accom-
`plishes a shift in kind, not merely degree. The original program was
`designed to cover medical services for particular categories of vulner-
`able individuals. Under the Affordable Care Act, Medicaid is trans-
`formed into a program to meet the health care needs of the entire
`nonelderly population with income below 133 percent of the poverty
`level. 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 thus
`violates the Constitution by threatening States with the loss of their
`existing Medicaid funding if they decline to comply with the expan-
`sion. Pp. 51–55.
`(c) The constitutional violation is fully remedied by precluding
`the Secretary from applying §1396c to withdraw existing Medicaid
`funds for failure to comply with the requirements set out in the ex-
`pansion. 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 whether
`to participate in the Medicaid expansion. Pp. 55–58.
`6. JUSTICE GINSBURG, joined by JUSTICE SOTOMAYOR, is of the view
`that the Spending Clause does not preclude the Secretary from with-
`holding Medicaid funds based on a State’s refusal to comply with the
` BUSINESS v. SEBELIUS
`expanded Medicaid program. But given the majority view, she
`agrees with THE CHIEF JUSTICE’s conclusion in Part IV–B that the
`Medicaid Act’s severability clause, 42 U. S. C. §1303, determines the
`appropriate remedy. Because THE CHIEF JUSTICE finds the withhold-
`ing—not the granting—of federal funds incompatible with the Spend-
`ing Clause, Congress’ extension of Medicaid remains available to any
`State that affirms its willingness to participate. Even absent §1303’s
`command, the Court would have no warrant to invalidate the funding
`offered by the Medicaid expansion, and surely no basis to tear down
`the 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.
` ROBERTS, 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 with
`respect 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 which
`BREYER 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.
`Opinion of ROBERTS, C. J.
`NOTICE: This opinion is subject to formal revision before publication in the
`preliminary print of the United States Reports. Readers are requested to
`notify the Reporter of Decisions, Supreme Court of the United States, Wash-
`ington, D. C. 20543, of any typographical or other formal errors, in order
`that corrections may be made before the preliminary print goes to press.
` Nos. 11–393, 11–398 and 11–400
` NATIONAL FEDERATION OF INDEPENDENT
` BUSINESS, ET AL., PETITIONERS
`11–393
`KATHLEEN SEBELIUS, SECRETARY OF HEALTH
`AND HUMAN SERVICES, ET AL.
`DEPARTMENT OF HEALTH AND HUMAN
`SERVICES, ET AL., PETITIONERS
`FLORIDA ET AL.
`11–398
`11–400
`FLORIDA, ET AL., PETITIONERS
`DEPARTMENT OF HEALTH AND
`HUMAN SERVICES ET AL.
`[June 28, 2012]
`CHIEF JUSTICE ROBERTS announced the judgment of the
`Court 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 provi-
`sions of the Patient Protection and Affordable Care Act of
`2010: the individual mandate, which requires individuals
`to purchase a health insurance policy providing a mini-
`mum level of coverage; and the Medicaid expansion, which
`gives funds to the States on the condition that they pro-
`vide 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 enact
`the challenged provisions.
`In our federal system, the National Government pos-
`sesses only limited powers; the States and the people
`retain the remainder. Nearly two centuries ago, Chief
`Justice Marshall observed that “the question respecting
`the 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 many
`States and individuals believe it does not possess. Resolv-
`ing this controversy requires us to examine both the limits
`of the Government’s power, and our own limited role in
`policing 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 conceiv-
`able functions of government, the Constitution lists, or
`enumerates, the Federal Government’s powers. Congress
`may, 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 pow-
`ers, because “[t]he enumeration presupposes something not
`enumerated.” Gibbons v. Ogden, 9 Wheat. 1, 195 (1824).
`The Constitution’s express conferral of some powers
`makes clear that it does not grant others. And the Federal
` 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 pro-
`hibitions, such as contained in the Bill of Rights. These
`affirmative prohibitions come into play, however, only where
`the Government possesses authority to act in the first
`place. If no enumerated power authorizes Congress to
`pass 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 enu-
`meration 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. Ros-
`siter ed. 1961). And when the Bill of Rights was ratified,
`it made express what the enumeration of powers neces-
`sarily implied: “The powers not delegated to the United
`States by the Constitution . . . are reserved to the States
`respectively, or to the people.” U. S. Const., Amdt. 10.
`The Federal Government has expanded dramatically over
`the past two centuries, but it still must show that a consti-
`tutional 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 Con-
`stitution is not the source of their power. The Consti-
`tution 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 au-
`thorization to act. The States thus can and do perform
`many 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
` the Constitution’s text does not authorize any government
`to do so. Our cases refer to this general power of govern-
`ing, possessed by the States but not by the Federal Gov-
`ernment, 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 quotation
`marks omitted). Because the police power is controlled by
`50 different States instead of one national sovereign, the
`facets of governing that touch on citizens’ daily lives are
`normally administered by smaller governments closer to
`the 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 gov-
`ernments 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 the
`liberty 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 be
`read carefully to avoid creating a general federal authority
`akin to the police power. The Constitution authorizes
`Congress to “regulate Commerce with foreign Nations, and
`among 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 com-
`merce,” “persons or things in interstate commerce,” and
`“those activities that substantially affect interstate com-
`merce.” Morrison, supra, at 609 (internal quotation marks
`omitted). The power over activities that substantially
`affect interstate commerce can be expansive. That power
`has been held to authorize federal regulation of such seem-
`ingly local matters as a farmer’s decision to grow wheat
`for himself and his livestock, and a loan shark’s extor-
`tionate 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, Im-
`posts and Excises, to pay the Debts and provide for the
`common Defence and general Welfare of the United
`States.” U. S. Const., Art. I, §8, cl. 1. Put simply, Con-
`gress may tax and spend. This grant gives the Federal
`Government 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 Postsecond-
`ary Ed. Expense Bd., 527 U. S. 666, 686 (1999). These
`offers may well induce the States to adopt policies that
`the Federal Government itself could not impose. See, e.g.,
`South Dakota v. Dole, 483 U. S. 203, 205–206 (1987) (con-
`ditioning 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 and
`proper for carrying into Execution the foregoing Powers.”
`Art. I, §8, cl. 18. We have long read this provision to give
`Congress great latitude in exercising its powers: “Let the
`end be legitimate, let it be within the scope of the constitu-
`tion, 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
`constitutional.” McCulloch, 4 Wheat., at 421.
`Our permissive reading of these powers is explained in
`part by a general reticence to invalidate the acts of the
`Nation’s elected leaders. “Proper respect for a co-ordinate
`branch of the government” requires that we strike down
`an Act of Congress only if “the lack of constitutional
`authority to pass [the] act in question is clearly demon-
`strated.” United States v. Harris, 106 U. S. 629, 635 (1883).
`Members of this Court are vested with the authority to
`interpret the law; we possess neither the expertise nor
`the prerogative to make policy judgments. Those decisions
`are entrusted to our Nation’s elected leaders, who can be
`thrown out of office if the people disagree with them. It is
`not our job to protect the people from the consequences of
`their political choices.
`Our deference in matters of policy cannot, however,
`become abdication in matters of law. “The powers of the
`legislature are defined and limited; and that those lim-
`its may not be mistaken, or forgotten, the constitution is
`written.” Marbury v. Madison, 1 Cranch 137, 176 (1803).
`Our respect for Congress’s policy judgments thus can
`never extend so far as to disavow restraints on federal
`power that the Constitution carefully constructed. “The
`peculiar circumstances of the moment may render a
`measure more or less wise, but cannot render it more or
`less constitutional.” Chief Justice John Marshall, A
`Friend of the Constitution No. V, Alexandria Gazette, July
`5, 1819, in John Marshall’s Defense of McCulloch v. Mary-
`land 190–191 (G. Gunther ed. 1969). And there can be no
`question that it is the responsibility of this Court to en-
`force the limits on federal power by striking down acts of
`Congress that transgress those limits. Marbury v. Madi-
`son, supra, at 175–176.
`The questions before us must be considered against the
`background of these basic principles.
`In 2010, Congress enacted the Patient Protection and
`Affordable Care Act, 124 Stat. 119. The Act aims to in-
`crease the number of Americans covered by health in-
`surance and decrease the cost of health care. The Act’s 10
`titles stretch over 900 pages and contain hundreds of
`provisions. This case concerns constitutional challenges to
`two key provisions, commonly referred to as the individual
`mandate and the Medicaid expansion.
`The individual mandate requires most Americans to
`maintain “minimum essential” health insurance coverage.
`26 U. S. C. §5000A. The mandate does not apply to some
`individuals, such as prisoners and undocumented aliens.
`§5000A(d). Many individuals will receive the required cov-
`erage through their employer, or from a government pro-
`gram such as Medicaid or Medicare. See §5000A(f). But
`for individuals who are not exempt and do not receive
`health insurance through a third party, the means of
`satisfying 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). That payment,
`which the Act describes as a “penalty,” is calculated as a
`percentage of household income, subject to a floor based on
`a specified dollar amount and a ceiling based on the aver-
`age annual premium the individual would have to pay for
`qualifying private health insurance. §5000A(c). In 2016,
`for example, the penalty will be 2.5 percent of an individ-
`ual’s household income, but no less than $695 and no more
`than the average yearly premium for insurance that co-
`vers 60 percent of the cost of 10 specified services (e.g.,
`prescription drugs and hospitalization). Ibid.; 42 U. S. C.
`§18022. The Act provides that the 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, such as the penalty for claiming too
`large an income tax refund. 26 U. S. C. §5000A(g)(1). The
`Act, however, bars the IRS from using several of its nor-
`mal enforcement tools, such as criminal prosecutions and
`levies. §5000A(g)(2). And some individuals who are sub-
`ject to the mandate are nonetheless exempt from the
`penalty—for example, those with income below a certain
`threshold and members of Indian tribes. §5000A(e).
`On the day the President signed the Act into law, Flor-
`ida and 12 other States filed a complaint in the Federal
`District Court for the Northern District of Florida. Those
`plaintiffs—who are both respondents and petitioners here,
`depending on the issue—were subsequently joined by 13
`more States, several individuals, and the National Fed-
`eration of Independent Business. The plaintiffs alleged,
`among other things, that the individual mandate provi-
`sions of the Act exceeded Congress’s powers under Article
`I of the Constitution. The District Court agreed, holding
`that Congress lacked constitutional power to enact the
`individual mandate. 780 F. Supp. 2d 1256 (ND Fla. 2011).
`The District Court determined that the individual man-
`date could not be severed from the remainder of the Act,
`and therefore struck down the Act in its entirety. Id., at
`1305–1306.
`The Court of Appeals for the Eleventh Circuit affirmed
`in part and reversed in part. The court affirmed the Dis-
`trict Court’s holding that the individual mandate exceeds
`Congress’s power. 648 F. 3d 1235 (2011). The panel
`unanimously agreed that the individual mandate did not
`impose a tax, and thus could not be authorized by Con-
`gress’s power to “lay and collect Taxes.” U. S. Const.,
`Art. I, §8, cl. 1. A majority also held that the individual
`mandate was not supported by Congress’s power to “regu-
`late Commerce . . . among the several States.” Id., cl. 3.
`According to the majority, the Commerce Clause does not
`empower the Federal Government to order individuals to
`engage in commerce, and the Government’s efforts to cast
`the individual mandate in a different light were unpersua-
`sive. Judge Marcus dissented, reasoning that the individ-
`ual mandate regulates economic activity that has a clear
`effect on interstate commerce.
`Having held the individual mandate to be unconstitu-
`tional, the majority examined