U.S. Supreme Court Upholds Individual Mandate to Buy Health Insurance; Rejects Medicaid Expansion
Requirements
WASHINGTON, D.C. (June 28, 2012) — On June 28, 2012, in a 5-4 decision, the U.S. Supreme Court upheld the
individual mandate to buy health insurance under Congress’ taxing power, and hence ruled that the Patient Protection and
Affordable Care Act (ACA) is constitutional. Chief Justice John G. Roberts, wrote the opinion for the majority, joining
with the court’s four liberal justices — Stephen G. Breyer, Ruth Bader Ginsburg, Elena Kagan and Sonia Sotomayor — in
upholding the law. Justices Samuel A. Alito, Anthony Kennedy, Antonin Scalia and Clarence Thomas
dissented. According to Chief Justice Roberts, “[P]ut simply, Congress 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.” Alternatively, Justice Kennedy summed up the
view of the dissent: “In our view, the entire Act before us is invalid in its entirety.”
Although the court upheld the individual mandate, it struck down in part the requirement for states to expand Medicaid
coverage by a 7-2 margin. Under this aspect of the ruling, the court found that Congress acted constitutionally in offering
states funds to expand coverage to millions of new individuals and states can agree to expand coverage in exchange for
those new funds. If a state accepts the expansion funds, then it must follow the rules and expand coverage. However, a
state can refuse to participate in the expansion without losing all of its Medicaid funds, keeping in place its current
Medicaid program. Speaking for the majority, Chief Justice Roberts stated: “Nothing in our opinion precludes Congress
from offering funds under the ACA to expand the availability of health care, and requiring that states accepting such funds
comply with the conditions on their use. What Congress is not free to do is to penalize States that choose not to participate
in that new program by taking away their existing Medicaid funding.” Thus, as pointed out by Roberts, “[A]s practical
matter, that means states may now choose to reject the expansion; that is the whole point. But that does not mean all or
even any will.” Justices Ginsburg and Sotomayor dissented from this ruling, believing that the entire Medicaid expansion
program is constitutional, even the provision threatening to cut off all funding unless states agreed to the expansion.
While the opinion settles the constitutional debate on the issues before the court, many unanswered questions remain. For
example, will all the states now move forward to implement insurance exchanges? Will some states refuse to expand
Medicaid coverage? Will most individuals opt to pay the modest “tax” and forego purchasing more costly health
insurance? Will other aspects of the law (e.g., the Independent Payment Advisory Board, or IPAB) be found
unconstitutional in subsequent litigation? Will the political fallout from this decision influence the upcoming national
elections one way or the other?
…
Read full letter here
