In National Federation of Independent Business (NFIB) v. Sebelius,935 the Court held that Congress did not have the authority under the Commerce Clause to impose a requirement compelling certain individuals to maintain a minimum level of health insurance (although, as discussed previously, the Court found such power to exist under the taxing power). Under this “individual mandate,” failure to purchase health insurance may subject a person to a monetary penalty, administered through the tax code.936 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 healthy individuals into the insurance risk pool, thus allowing insurers to subsidize the costs of covering the unhealthy individuals they are now required to accept.
Chief Justice Roberts, in a controlling opinion,937 suggested that Congress’s authority to regulate interstate commerce presupposes the existence of a commercial activity to regulate. Further, his opinion noted that the commerce power had been uniformly described in previous cases as involving the regulation of an “activity.”938 The individual mandate, on the other hand, compels an individual to become active in commerce on the theory that the individual’s inactivity affects interstate commerce. Justice Roberts suggested that regulation of individuals because they are doing nothing would result in an unprecedented expansion of congressional authority with few discernable limitations. While recognizing that most people are likely to seek health care at some point in their lives, Justice Roberts noted that there was no precedent for the argument that individuals who might engage in a commercial activity in the future could, on that basis, be regulated today.939 The Chief Justice similarly rejected the argument that the Necessary and Proper Clause could provide this additional authority. Rather than serving as a “incidental” adjunct to the Commerce Clause, reliance on the Necessary and Proper Clause in this instance would, according to the Chief Justice, create a substantial expansion of federal authority to regulate persons not otherwise subject to such regulation.940
- 567 U.S. ___, No. 11–393, slip op. (2012). [Back to text]
- Patient Protection and Affordable Care Act (ACA), Pub. L. 111–148, as amended. This mandate was necessitated by the Act’s “guaranteed-issue” and “community-rating” provisions, under which insurance companies are prohibited from denying coverage to those with such conditions or charging unhealthy individuals higher premiums than healthy individuals. Id. at §§ 300gg, 300gg–1, 300gg–3, 300gg–4. As these requirements provide an incentive for individuals to delay purchasing health insurance until they become sick, this would impose new costs on insurers, leading them to significantly increase premiums on everyone. [Back to text]
- Although no other Justice joined Chief Justice Robert’s opinion, four dissenting Justices reached similar conclusions regarding the Commerce Clause and the Necessary and Proper Clause. NFIB, No. 11–393, slip op. at 4–16 (joint opinion of Scalia, Kennedy, Thomas and Alito, dissenting). [Back to text]
- See, e.g., Lopez, 514 U.S. at 573 (“Where economic activity substantially affects interstate commerce, legislation regulating that activity will be sustained”). [Back to text]
- NFIB, No. 11–393, slip op. at 20, 26. [Back to text]
- NFIB, No. 11–393, slip op. at 30. [Back to text]