Constitutional Law I, Pages 200–204

National Federation of Independent Business v. Sebelius

Supreme Court of the United States, 2012

Facts:

Congress passed the Affordable Care Act, requiring all Americans to have health insurance or face a penalty to be paid to the IRS as part of one's income taxes. This was challenged as going beyond the government's power to regulate interstate commerce.

Issue:

Can the federal government require Americans to have health insurance under its power to regulate interstate commerce?

Reasoning:

Another part of the ACA requires insurance companies to accept people with preexisting conditions at affordable rates. This encourages people to wait until then to acquire health insurance, and necessarily increases the rates which health insurance companies have to charge everyone in the country to make up for these people. To prevent this, Congress required all people to always have health insurance so that they will pay until they get sick, while healthy people are also paying for a service they do not need to subsidize the sick.

While this may have an effect on commerce, Congress only has the power to regulate commerce, not to compel individuals to engage in commerce. Allowing Congress to legislate such mandates would allow it to compel citizens to do almost anything. There is always an infinite number of things that one is not doing that could potentially affect interstate commerce. Congress could conceivably require people to buy vegetables so that health insurance prices go down. This is not what the Framers envisioned.

Congress may have determined this to be "necessary," which has historically been given much deference, but laws which are not "proper" by being not "consist[ent] with the letter and spirit of the constitution" have still been declared unconstitutional. This is one such act which is in no way "narrow in scope" or "incidental" to the exercise of the commerce power. It does not regulate the substantial effects of the failure to purchase insurance, not is it a "necessary and proper" component of the reforms.

Holding:

No, requiring health insurance cannot be done under the Commerce Clause and Necessary and Proper Clause. It must be under Congress' taxing power.

Dissenting Opinion:

Scalia: If the individual mandate "regulates" anything, it is the failure to have adequate insurance. Purchasing insurance is commerce, but not purchasing insurance is not. One does not regulate commerce that does not exist by compelling its existence. The people affected by this are the people who are the furthest removed from the interstate market. Allowing Congress to compel this under the Commerce Clause would allow it to give Congress unlimited power.

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