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Matched Legal Cases: ['§8', '§8', '§8', '§5000', '§5000', '§5000', '§5000', '§5000', '§18022', '§5000', '§5000', '§5000', '§1395', '§395', '§18091', '§300', '§8', '§5000']

Oct-2013 | Hon. John G. Roberts, Jr (Bio) (Chief Justice of the United States)
Today we resolve constitutional challenges to two proviÂ­sions of the Patient Protection and Affordable Care Act of 2010: the individual mandate, which requires individuals to purchase a health insurance policy providing a miniÂ­mum level of coverage; and the Medicaid expansion, which gives funds to the States on the condition that they proÂ­vide 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 Nationâ€™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 posÂ­sesses only limited powers; the States and the people retain the remainder. Nearly two centuries ago, Chief Justice Marshall observed that â€œthe question respecting the extent of the powers actually grantedâ€ to the Federal Government â€œis perpetually arising, and will probably continue to arise, as long as our system shall exist.â€ 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. ResolvÂ­ing this controversy requires us to examine both the limits of the Governmentâ€™s power, and our own limited role in policing those boundaries.
Today, the restrictions on government power foremost in many Americansâ€™ minds are likely to be affirmative proÂ­hibitions, 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 enuÂ­meration of powers sufficed to restrain the Government. As Alexander Hamilton put it, â€œthe Constitution is itself, in every rational sense, and to every useful purpose, A BILL OF RIGHTS.â€ And when the Bill of Rights was ratified, it made express what the enumeration of powers necesÂ­sarily implied: â€œThe powers not delegated to the United States by the Constitution . . . are reserved to the States respectively, or to the people.â€ The Federal Government has expanded dramatically over the past two centuries, but it still must show that a constiÂ­tutional grant of power authorizes each of its actions.
The same does not apply to the States, because the ConÂ­stitution is not the source of their power. The ConstiÂ­tution may restrict state governmentsâ€”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 auÂ­thorization to act. The States thus can and do perform many of the vital functions of modern governmentâ€”punishing street crime, running public schools, and zoning property for development, to name but a fewâ€”even though the Constitutionâ€™s text does not authorize any government to do so. Our cases refer to this general power of governÂ­ing, possessed by the States but not by the Federal GovÂ­ernment, as the â€œpolice power.â€
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 â€œregulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.â€Art. I, Â§8, cl. 3. Our precedents read that to mean that Congress may regulate â€œthe channels of interstate comÂ­merce,â€ â€œpersons or things in interstate commerce,â€ and â€œthose activities that substantially affect interstate comÂ­merce.â€ The power over activities that substantially affect interstate commerce can be expansive. That power has been held to authorize federal regulation of such seemÂ­ingly local matters as a farmerâ€™s decision to grow wheat for himself and his livestock, and a loan sharkâ€™s extorÂ­tionate collections from a neighborhood butcher shop.
Congress may also â€œlay and collect Taxes, Duties, ImÂ­posts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States.â€ U. S. Const., Art. I, Â§8, cl. 1. Put simply, ConÂ­gress 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.
The reach of the Federal Governmentâ€™s enumerated powers is broader still because the Constitution authorizes Congress to â€œmake all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers.â€Art. I, Â§8, cl. 18. We have long read this provision to give Congress great latitude in exercising its powers: â€œLet the end be legitimate, let it be within the scope of the constituÂ­tion, 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.â€
Our permissive reading of these powers is explained in part by a general reticence to invalidate the acts of the Nationâ€™s elected leaders. â€œProper respect for a co-ordinate branch of the governmentâ€ requires that we strike down an Act of Congress only if â€œthe lack of constitutional authority to pass [the] act in question is clearly demonÂ­strated.â€ 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 Nationâ€™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. â€œThe powers of the legislature are defined and limited; and that those limits may not be mistaken, or forgotten, the constitution is written.â€ Our respect for Congressâ€™s policy judgments thus can never extend so far as to disavow restraints on federal power that the Constitution carefully constructed. â€œThe peculiar circumstances of the moment may render a measure more or less wise, but cannot render it more or less constitutional.â€ And there can be no question that it is the responsibility of this Court to enÂ­force the limits on federal power by striking down acts of Congress that transgress those limits.
The individual mandate requires most Americans to maintain â€œminimum essentialâ€ health insurance coverage.26 U. S. C. Â§5000A. The mandate does not apply to some individuals, such as prisoners and undocumented aliens.Â§5000A(d). Many individuals will receive the required covÂ­erage through their employer, or from a government proÂ­gram such as Medicaid or Medicare. See Â§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 â€œ[s]hared responsibility paymentâ€ to the Federal Government. Â§5000A(b)(1). That payment, which the Act describes as a â€œpenalty,â€ is calculated as a percentage of household income, subject to a floor based on a specified dollar amount and a ceiling based on the averÂ­age annual premium the individual would have to pay for qualifying private health insurance. Â§5000A(c). In 2016, for example, the penalty will be 2.5 percent of an individÂ­ualâ€™s household income, but no less than $695 and no more than the average yearly premium for insurance that coÂ­vers 60 percent of the cost of 10 specified services (e.g., prescription drugs and hospitalization). Ibid.; 42 U. S. C. Â§18022. The Act provides that the penalty will be paid to the Internal Revenue Service with an individualâ€™s taxes, and â€œshall be assessed and collected in the same mannerâ€ as tax penalties, such as the penalty for claiming too large an income tax refund. 26 U. S. C. Â§5000A(g)(1). The Act, however, bars the IRS from using several of its norÂ­mal enforcement tools, such as criminal prosecutions and levies. Â§5000A(g)(2). And some individuals who are subÂ­ject to the mandate are nonetheless exempt from the penaltyâ€”for example, those with income below a certainthreshold and members of Indian tribes. Â§5000A(e).
The Governmentâ€™s first argument is that the individual mandate is a valid exercise of Congressâ€™s power under the Commerce Clause and the Necessary and Proper Clause. According to the Government, the health care market is characterized by a significant cost-shifting problem. EveryÂ­one will eventually need health care at a time and to an extent they cannot predict, but if they do not have insurÂ­ance, they often will not be able to pay for it. Because state and federal laws nonetheless require hospitals to provide a certain degree of care to individuals without regard to their ability to pay, see, e.g., 42 U. S. C. Â§1395dd; Fla. Stat. Ann. Â§395.1041, hospitals end up receiving compensation for only a portion of the services they proÂ­vide. To recoup the losses, hospitals pass on the cost to insurers through higher rates, and insurers, in turn, pass on the cost to policy holders in the form of higher preÂ­miums. Congress estimated that the cost of uncompenÂ­sated care raises family health insurance premiums, on average, by over $1,000 per year. 42 U. S. C. Â§18091(2)(F).
In the Affordable Care Act, Congress addressed the problem of those who cannot obtain insurance coverage because of preexisting conditions or other health issues. It did so through the Actâ€™s â€œguaranteed-issueâ€ and â€œcommunity- ratingâ€ provisions. These provisions together prohibit inÂ­surance companies from denying coverage to those with such conditions or charging unhealthy individuals higher premiums than healthy individuals. See Â§Â§300gg, 300ggâ€“1, 300ggâ€“3, 300ggâ€“4. The guaranteed-issue and community-rating reforms do not, however, address the issue of healthy individuals who choose not to purchase insurance to cover potential healthcare needs. In fact, the reforms sharply exacerbate that problem, by providing an incentive for individuals to delay purchasing health insurance until they become sick, relyÂ­ing on the promise of guaranteed and affordable coverage.
The individual mandate was Congressâ€™s solution to these problems. By requiring that individuals purchase health insurance, the mandate prevents cost-shifting by those who would otherwise go without it. In addition, the mandate forces into the insurance risk pool more healthy individuals, whose premiums on average will be higher than their health care expenses. This allows insurers to subsidize the costs of covering the unhealthy individuals the reforms require them to accept. The Government claims that Congress has power under the Commerce and Necessary and Proper Clauses to enact this solution.
The Government contends that the individual mandate is within Congressâ€™s power because the failure to purÂ­chase insurance â€œhas a substantial and deleterious effect on interstate commerceâ€ by creating the cost-shifting probÂ­lem.
Given its expansive scope, it is no surprise that ConÂ­gress has employed the commerce power in a wide variety of ways to address the pressing needs of the time. But Congress has never attempted to rely on that power to compel individuals not engaged in commerce to purchase an unwanted product. Legislative novelty is not necÂ­essarily fatal; there is a first time for everything. But sometimes â€œthe most telling indication of [a] severe conÂ­stitutional problem . . . is the lack of historical precedentâ€ for Congressâ€™s actionâ€¦..
The Constitution grants Congress the power to â€œregulate Commerce.â€ Art. I, Â§8, cl. 3. The power to regulate commerce presupposes the existence of comÂ­mercial activity to be regulated. If the power to â€œregulateâ€ something included the power to create it, many of the provisions in the Constitution would be superfluousâ€¦..
The individual mandate, however, does not regulate existing commercial activity. It instead compels individÂ­uals 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 ConÂ­gress to regulate individuals precisely because they are doing nothing would open a new and potentially vast doÂ­main to congressional authority. Every day individuals do not do an infinite number of things. In some cases they decide not to do something; in others they simply fail to do it. Allowing Congress to justify federal regulation by pointing to the effect of inaction on commerce would bring countless decisions an individual could potentially make within the scope of federal regulation, andâ€”under the Governmentâ€™s theoryâ€”empower Congress to make those decisions for him.
Indeed, the Governmentâ€™s logic would justify a mandaÂ­tory purchase to solve almost any problem.â€¦ To consider a different example in the health care market, many Americans do not eat a balanced diet. That group makes up a larger percentage of the total population than those without health insurance. Those inÂ­creased costs are borne in part by other Americans who must pay more, just as the uninsured shift costs to the insured. Congress addressed the insurance problem by ordering everyone to buy insurance. Under the GovÂ­ernmentâ€™s theory, Congress could address the diet problem by ordering everyone to buy vegetables.
People, for reasons of their own, often fail to do things that would be good for them or good for society. Those failuresâ€”joined with the similar failures of othersâ€”can readily have a substantial effect on interstate commerce. Under the Governmentâ€™s logic, that authorizes Congress to use its commerce power to compel citizens to act as the Government would have them act.
That is not the country the Framers of our Constitution envisioned. James Madison explained that the Commerce Clause was â€œan addition which few oppose and from which no apprehensions are entertained.â€ While Congressâ€™s authority under the Commerce Clause has of course expanded with the growth of the national economy, our cases have â€œalways recognized that the power to regulate commerce, though broad indeed, has limits.â€ The Governmentâ€™s theory would erode those limits, permitting Congress to reach beyond the natural extent of its authorÂ­ity, â€œeverywhere extending the sphere of its activity anddrawing all power into its impetuous vortex.â€
Congress already enjoys vast power to regulate much of what we do. Accepting the Governmentâ€™s theory would give Congress the same license to regulate what we do not do, fundamentally changing the relation between the citizen and the Federal Government.6 To an economist, perhaps, there is no difference between activity and inactivity; both have measurable economic effects on commerce. But the distinction between doing something and doing nothing would not have been lost on the Framers, who were â€œpractical statesmen,â€ not metaÂ­physical philosophersâ€¦.. The Framers gave Congress the power to regulate comÂ­merce, not to compel it, and for over 200 years both our decisions and Congressâ€™s actions have reflected this unÂ­derstanding. There is no reason to depart from that unÂ­derstanding now.
The Government says that health insurance and healthcare financing are â€œinherently integrated.â€ Brief for United States 41. But that does not mean the compelled purchase of the first is properly regarded as a regulation of the second. No matter how â€œinherently integratedâ€ health insurance and health care consumption may be, they are not the same thing: They involve different transactions, entered into at different times, with different providers. And for most of those targeted by the mandate, significant health care needs will be years, or even decades, away. The proximity and degree of connection between the mandate and the subsequent commercial activity is too lackÂ­ing to justify an exception of the sort urged by the GovÂ­ernment. The individual mandate forces individuals into commerce precisely because they elected to refrain from commercial activity. Such a law cannot be sustained under a clause authorizing Congress to â€œregulate Commerce.â€
That is not the end of the matter. Because the ComÂ­merce Clause does not support the individual mandate, it is necessary to turn to the Governmentâ€™s second argument: that the mandate may be upheld as within Congressâ€™s enumerated power to â€œlay and collect Taxes.â€
Under the mandate, 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. See Â§5000A(b). That, according to the Government, means the mandate can be regarded as establishing a conditionâ€”not owning health insuranceâ€”that triggers a taxâ€”the required payment to the IRS. Under that theory, the mandate is not a legal command to buy insurance. Rather, it makes going without insurance just another thing the Government taxes, like buying gasoline or earnÂ­ing income. And if the mandate is in effect just a tax hike on certain taxpayers who do not have health insurance, it may be within Congressâ€™s constitutional power to tax.
Neither the Act nor any other law attaches negative legal consequences to not buying health insurÂ­ance, beyond requiring a payment to the IRS. The GovÂ­ernment agrees with that reading, confirming that if someone chooses to pay rather than obtain health insurÂ­ance, they have fully complied with the law.
Indeed, it is estimated that four million people each year will choose to pay the IRS rather than buy insuranceâ€¦. That Congress apparently regards such extensive failure to comply with the mandate as tolerable suggests that Congress did not think it was creating four million outlaws. It suggests instead that the shared responsibility payment merely imposes a tax citiÂ­zens may lawfully choose to pay in lieu of buying health insurance.
Congressâ€™s use of the Taxing Clause to encourage buying something is â€¦ not new. Tax incentives already promote, for example, purchasing homes and professional educaÂ­tions. Sustaining the mandate as a tax depends only on whether Congress has properly exercised its taxing power to encourage purchasÂ­ing health insurance, not whether it can. Upholding the individual mandate under the Taxing Clause thus does not recognize any new federal power. It determines that Congress has used an existing one.
[A]lthough the breadth of Congressâ€™s power to tax is greater than its power to regulate commerce, the taxing power does not give Congress the same degree of control over individual behavior. Once we recognize that ConÂ­gress may regulate a particular decision under the ComÂ­merce Clause, the Federal Government can bring its full weight to bear. Congress may simply command individÂ­uals to do as it directs. An individual who disobeys may be subjected to criminal sanctions. Those sanctions can include not only fines and imprisonment, but all the atÂ­tendant consequences of being branded a criminal: depriÂ­vation of otherwise protected civil rights, such as the right to bear arms or vote in elections; loss of employment opÂ­portunities; social stigma; and severe disabilities in other controversies, such as custody or immigration disputes.
By contrast, Congressâ€™s authority under the taxing power is limited to requiring an individual to pay money into the Federal Treasury, no more. If a tax is properly paid, the Government has no power to compel or punish individuals subject to it. We do not make light of the seÂ­vere burden that taxationâ€”especially taxation motivatedby a regulatory purposeâ€”can impose. But imposition of a tax nonetheless leaves an individual with a lawful choice to do or not do a certain act, so long as he is willing to pay a tax levied on that choice.11 The Affordable Care Actâ€™s requirement that certain inÂ­dividuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax. BeÂ­cause the Constitution permits such a tax, it is not our roleto forbid it, or to pass upon its wisdom or fairness.
Of course, individuals do not have a lawful choice not to pay a tax due, and may sometimes face prosecution for failing to do so. But that does not show that the tax restricts the lawful choice whether to undertake or forgo the activity on which the taxis predicated. Those subject to the individual mandate may lawfully forgo health insurance and pay higher taxes, or buy health insurance and pay lower taxes. The only thing they may not lawfully do is not buy health insurance and not pay the resulting tax.