Title: NFIB vs. Sebelius
Original CoS Document (slug): nfib-vs-sebelius
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Attached File: nfib-vs-sebelius.pdf
Created: 2023-04-03 10:59:59
Updated: 2024-04-03 23:00:00
Published: 2023-04-03 01:00:00
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1
(Slip Opinion)
OCTOBER TERM, 2011
Syllabus
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
being done in connection with this case, at the time the opinion is issued.
The syllabus constitutes no part of the opinion of the Court but has been
prepared by the Reporter of Decisions for the convenience of the reader.
See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.
SUPREME COURT OF THE UNITED STATES
Syllabus
NATIONAL FEDERATION OF INDEPENDENT
BUSINESS ET AL. v. SEBELIUS, SECRETARY OF
HEALTH AND HUMAN SERVICES, ET AL.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE ELEVENTH CIRCUIT
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©, (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
court.
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NATIONAL FEDERATION OF INDEPENDENT
BUSINESS
v. SEBELIUS
Syllabus
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–
15.
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
3
Cite as: 567 U. S. ____ (2012)
Syllabus
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-
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NATIONAL FEDERATION OF INDEPENDENT
BUSINESS
v. SEBELIUS
Syllabus
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–
44.
(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.
© 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.
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Cite as: 567 U. S. ____ (2012)
Syllabus
(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.
©
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
6
NATIONAL FEDERATION OF INDEPENDENT
BUSINESS
v. SEBELIUS
Syllabus
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.
_________________
_________________
1
Cite as: 567 U. S. ____ (2012)
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.
SUPREME COURT OF THE UNITED STATES
Nos. 11–393, 11–398 and 11–400
NATIONAL FEDERATION OF INDEPENDENT
BUSINESS, ET AL., PETITIONERS
11–393
v.
KATHLEEN SEBELIUS, SECRETARY OF HEALTH
AND HUMAN SERVICES, ET AL.
DEPARTMENT OF HEALTH AND HUMAN
SERVICES, ET AL., PETITIONERS
11–398
v.
FLORIDA ET AL.
FLORIDA, ET AL., PETITIONERS
11–400
v.
DEPARTMENT OF HEALTH AND
HUMAN SERVICES ET AL.
ON WRITS OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE ELEVENTH CIRCUIT
[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
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NATIONAL FEDERATION OF INDEPENDENT
BUSINESS
v. SEBELIUS
Opinion of ROBERTS, C. J.
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
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Opinion of ROBERTS, C. J.
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
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NATIONAL FEDERATION OF INDEPENDENT
BUSINESS
v. SEBELIUS
Opinion of ROBERTS, C. J.
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
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Cite as: 567 U. S. ____ (2012)
Opinion of ROBERTS, C. J.
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
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NATIONAL FEDERATION OF INDEPENDENT
BUSINESS
v. SEBELIUS
Opinion of ROBERTS, C. J.
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.
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Cite as: 567 U. S. ____ (2012)
Opinion of the Court
I
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©. 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”
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NATIONAL FEDERATION OF INDEPENDENT
BUSINESS
v. SEBELIUS
Opinion of the Court
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
9
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Opinion of the Court
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 whether that provision
could be severed from the remainder of the Act. The ma-
jority determined that, contrary to the District Court’s
view, it could. The court thus struck down only the indi-
vidual mandate, leaving the Act’s other provisions intact.
648 F. 3d, at 1328.
Other Courts of Appeals have also heard challenges to
the individual mandate. The Sixth Circuit and the D. C.
Circuit upheld the mandate as a valid exercise of Con-
gress’s commerce power. See Thomas More Law Center v.
Obama, 651 F. 3d 529 (CA6 2011); Seven-Sky v. Holder,
661 F. 3d 1 (CADC 2011). The Fourth Circuit determined
that the Anti-Injunction Act prevents courts from consid-
ering the merits of that question. See Liberty Univ., Inc.
v. Geithner, 671 F. 3d 391 (2011). That statute bars suits
“for the purpose of restraining the assessment or collection
of any tax.” 26 U. S. C. §7421(a). A majority of the Fourth
Circuit panel reasoned that the individual mandate’s
penalty is a tax within the meaning of the Anti-Injunction
Act, because it is a financial assessment collected by the
IRS through the normal means of taxation. The majority
therefore determined that the plaintiffs could not chal-
lenge the individual mandate until after they paid the
penalty.1
——————
1
The Eleventh Circuit did not consider whether the Anti-Injunction
Act bars challenges to the individual mandate. The District Court had
determined that it did not, and neither side challenged that holding on
appeal. The same was true in the Fourth Circuit, but that court
examined the question sua sponte because it viewed the Anti-Injunction
Act as a limit on its subject matter jurisdiction. See Liberty Univ., 671
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The second provision of the Affordable Care Act directly
challenged here is the Medicaid expansion. Enacted in
1965, Medicaid offers federal funding to States to assist
pregnant women, children, needy families, the blind, the
elderly, and the disabled in obtaining medical care. See 42
U. S. C. §1396a(a)(10). In order to receive that funding,
States must comply with federal criteria governing mat-
ters such as who receives care and what services are pro-
vided at what cost. By 1982 every State had chosen to
participate in Medicaid. Federal funds received through
the Medicaid program have become a substantial part of
state budgets, now constituting over 10 percent of most
States’ total revenue.
The Affordable Care Act expands the scope of the Medi-
caid program and increases the number of individuals the
States must cover. For example, the Act requires state
programs to provide Medicaid coverage to adults with
incomes up to 133 percent of the federal poverty level,
whereas many States now cover adults with children only
if their income is considerably lower, and do not cover
childless adults at all. See §1396a(a)(10)(A)(i)(VIII). The
Act increases federal funding to cover the States’ costs in
expanding Medicaid coverage, although States will bear a
portion of the costs on their own. §1396d(y)(1). If a State
does not comply with the Act’s new coverage require-
ments, it may lose not only the federal funding for those
requirements, but all of its federal Medicaid funds. See
§1396c.
Along with their challenge to the individual mandate,
the state plaintiffs in the Eleventh Circuit argued that the
Medicaid expansion exceeds Congress’s constitutional
——————
F. 3d, at 400–401. The Sixth Circuit and the D. C. Circuit considered
the question but determined that the Anti-Injunction Act did not apply.
See Thomas More, 651 F. 3d, at 539–540 (CA6); Seven-Sky, 661 F. 3d,
at 5–14 (CADC).
11
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Opinion of the Court
powers. The Court of Appeals unanimously held that the
Medicaid expansion is a valid exercise of Congress’s power
under the Spending Clause. U. S. Const., Art. I, §8, cl. 1.
And the court rejected the States’ claim that the threat-
ened loss of all federal Medicaid funding violates the
Tenth Amendment by coercing them into complying with
the Medicaid expansion. 648 F. 3d, at 1264, 1268.
We granted certiorari to review the judgment of the
Court of Appeals for the Eleventh Circuit with respect to
both the individual mandate and the Medicaid expansion.
565 U. S. ___ (2011). Because no party supports the Elev-
enth Circuit’s holding that the individual mandate can
be completely severed from the remainder of the Affordable
Care Act, we appointed an amicus curiae to defend that
aspect of the judgment below. And because there is a
reasonable argument that the Anti-Injunction Act de-
prives us of jurisdiction to hear challenges to the individ-
ual mandate, but no party supports that proposition, we
appointed an amicus curiae to advance it.2
II
Before turning to the merits, we need to be sure we have
the authority to do so. The Anti-Injunction Act provides
that “no suit for the purpose of restraining the assessment
or collection of any tax shall be maintained in any court
by any person, whether or not such person is the per-
son against whom such tax was assessed.” 26 U. S. C.
§7421(a). This statute protects the Government’s ability
to collect a consistent stream of revenue, by barring litiga-
tion to enjoin or otherwise obstruct the collection of taxes.
Because of the Anti-Injunction Act, taxes can ordinarily be
——————
2
We appointed H. Bartow Farr III to brief and argue in support of the
Eleventh Circuit’s judgment with respect to severability, and Robert A.
Long to brief and argue the proposition that the Anti-Injunction Act
bars the current challenges to the individual mandate. 565 U. S. ___
(2011). Both amici have ably discharged their assigned responsibilities.
12
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Opinion of the Court
challenged only after they are paid, by suing for a refund.
See Enochs v. Williams Packing & Nav. Co., 370 U. S. 1,
7–8 (1962).
The penalty for not complying with the Affordable Care
Act’s individual mandate first becomes enforceable in
2014. The present challenge to the mandate thus seeks to
restrain the penalty’s future collection. Amicus contends
that the Internal Revenue Code treats the penalty as a
tax, and that the Anti-Injunction Act therefore bars this
suit.
The text of the pertinent statutes suggests otherwise.
The Anti-Injunction Act applies to suits “for the purpose
of restraining the assessment or collection of any tax.”
§7421(a) (emphasis added). Congress, however, chose to
describe the “[s]hared responsibility payment” imposed on
those who forgo health insurance not as a “tax,” but as a
“penalty.” §§5000A(b), (g)(2). There is no immediate
reason to think that a statute applying to “any tax” would
apply to a “penalty.”
Congress’s decision to label this exaction a “penalty”
rather than a “tax” is significant because the Affordable
Care Act describes many other exactions it creates as
“taxes.” See Thomas More, 651 F. 3d, at 551. Where
Congress uses certain language in one part of a statute
and different language in another, it is generally pre-
sumed that Congress acts intentionally. See Russello v.
United States, 464 U. S. 16, 23 (1983).
Amicus argues that even though Congress did not label
the shared responsibility payment a tax, we should treat it
as such under the Anti-Injunction Act because it functions
like a tax. It is true that Congress cannot change whether
an exaction is a tax or a penalty for constitutional pur-
poses simply by describing it as one or the other. Congress
may not, for example, expand its power under the Taxing
Clause, or escape the Double Jeopardy Clause’s constraint
on criminal sanctions, by labeling a severe financial pun-
Cite as: 567 U. S. ____ (2012)
13
Opinion of ROBERTS, C. J.
ishment a “tax.” See Bailey v. Drexel Furniture Co., 259
U. S. 20, 36–37 (1922); Department of Revenue of Mont. v.
Kurth Ranch, 511 U. S. 767, 779 (1994).
The Anti-Injunction Act and the Affordable Care Act,
however, are creatures of Congress’s own creation. How
they relate to each other is up to Congress, and the best
evidence of Congress’s intent is the statutory text. We
have thus applied the Anti-Injunction Act to statutorily
described “taxes” even where that label was inaccurate.
See Bailey v. George, 259 U. S. 16 (1922) (Anti-Injunction
Act applies to “Child Labor Tax” struck down as exceeding
Congress’s taxing power in Drexel Furniture).
Congress can, of course, describe something as a penalty
but direct that it nonetheless be treated as a tax for pur-
poses of the Anti-Injunction Act. For example, 26 U. S. C.
§6671(a) provides that “any reference in this title to ‘tax’
imposed by this title shall be deemed also to refer to the
penalties and liabilities provided by” subchapter 68B of
the Internal Revenue Code. Penalties in subchapter 68B
are thus treated as taxes under Title 26, which includes
the Anti-Injunction Act. The individual mandate, how-
ever, is not in subchapter 68B of the Code. Nor does any
other provision state that references to taxes in Title 26
shall also be “deemed” to apply to the individual mandate.
Amicus attempts to show that Congress did render the
Anti-Injunction Act applicable to the individual mandate,
albeit by a more circuitous route. Section 5000A(g)(1) spec-
ifies that the penalty for not complying with the man-
date “shall be assessed and collected in the same manner
as an assessable penalty under subchapter B of chapter
68.” Assessable penalties in subchapter 68B, in turn,
“shall be assessed and collected in the same manner as
taxes.” §6671(a). According to amicus, by directing that
the penalty be “assessed and collected in the same man-
ner as taxes,” §5000A(g)(1) made the Anti-Injunction Act
applicable to this penalty.
Opinion of the Court
14
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Opinion of the Court
The Government disagrees. It argues that §5000A(g)(1)
does not direct courts to apply the Anti-Injunction Act,
because §5000A(g) is a directive only to the Secretary of
the Treasury to use the same “‘methodology and proce-
dures’ ” to collect the penalty that he uses to collect taxes.
Brief for United States 32–33 (quoting Seven-Sky, 661
F. 3d, at 11).
We think the Government has the better reading. As
it observes, “Assessment” and “Collection” are chapters of
the Internal Revenue Code providing the Secretary author-
ity to assess and collect taxes, and generally specifying
the means by which he shall do so. See §6201 (assess-
ment authority); §6301 (collection authority). Section
5000A(g)(1)’s command that the penalty be “assessed and
collected in the same manner” as taxes is best read as
referring to those chapters and giving the Secretary the
same authority and guidance with respect to the penalty.
That interpretation is consistent with the remainder of
§5000A(g), which instructs the Secretary on the tools he
may use to collect the penalty. See §5000A(g)(2)(A) (bar-
ring criminal prosecutions); §5000A(g)(2)(B) (prohibiting
the Secretary from using notices of lien and levies). The
Anti-Injunction Act, by contrast, says nothing about the
procedures to be used in assessing and collecting taxes.
Amicus argues in the alternative that a different section
of the Internal Revenue Code requires courts to treat the
penalty as a tax under the Anti-Injunction Act. Section
6201(a) authorizes the Secretary to make “assessments of
all taxes (including interest, additional amounts, additions
to the tax, and assessable penalties).” (Emphasis added.)
Amicus contends that the penalty must be a tax, because
it is an assessable penalty and §6201(a) says that taxes
include assessable penalties.
That argument has force only if §6201(a) is read in
isolation. The Code contains many provisions treating
taxes and assessable penalties as distinct terms. See, e.g.,
15
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Opinion of ROBERTS, C. J.
§§860(h)(1), 6324A(a), 6601(e)(1)–(2), 6602, 7122(b). There
would, for example, be no need for §6671(a) to deem “tax”
to refer to certain assessable penalties if the Code al-
ready included all such penalties in the term “tax.” In-
deed, amicus’s earlier observation that the Code requires
assessable penalties to be assessed and collected “in the
same manner as taxes” makes little sense if assessable
penalties are themselves taxes. In light of the Code’s
consistent distinction between the terms “tax” and “as-
sessable penalty,” we must accept the Government’s in-
terpretation: §6201(a) instructs the Secretary that his
authority to assess taxes includes the authority to assess
penalties, but it does not equate assessable penalties to
taxes for other purposes.
The Affordable Care Act does not require that the pen-
alty for failing to comply with the individual mandate be
treated as a tax for purposes of the Anti-Injunction Act.
The Anti-Injunction Act therefore does not apply to this
suit, and we may proceed to the merits.
III
The Government advances two theories for the proposi-
tion that Congress had constitutional authority to enact
the individual mandate. First, the Government argues
that Congress had the power to enact the mandate under
the Commerce Clause. Under that theory, Congress may
order individuals to buy health insurance because the
failure to do so affects interstate commerce, and could un-
dercut the Affordable Care Act’s other reforms. Second,
the Government argues that if the commerce power does
not support the mandate, we should nonetheless uphold it
as an exercise of Congress’s power to tax. According to the
Government, even if Congress lacks the power to direct
individuals to buy insurance, the only effect of the indi-
vidual mandate is to raise taxes on those who do not do so,
and thus the law may be upheld as a tax.
16
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Opinion of ROBERTS, C. J.
A
The Government’s first argument is that the individual
mandate is a valid exercise of Congress’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. Every-
one will eventually need health care at a time and to an
extent they cannot predict, but if they do not have insur-
ance, 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. §1395dd;
Fla. Stat. Ann. §395.1041, hospitals end up receiving
compensation for only a portion of the services they pro-
vide. 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 pre-
miums. Congress estimated that the cost of uncompen-
sated care raises family health insurance premiums, on
average, by over $1,000 per year. 42 U. S. C. §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 Act’s “guaranteed-issue” and “community-
rating” provisions. These provisions together prohibit in-
surance companies from denying coverage to those with
such conditions or charging unhealthy individuals higher
premiums than healthy individuals. See §§300gg, 300gg–1,
300gg–3, 300gg–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 health
care needs. In fact, the reforms sharply exacerbate that
problem, by providing an incentive for individuals to delay
purchasing health insurance until they become sick, rely-
ing on the promise of guaranteed and affordable coverage.
17
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Opinion of ROBERTS, C. J.
The reforms also threaten to impose massive new costs on
insurers, who are required to accept unhealthy individuals
but prohibited from charging them rates necessary to pay
for their coverage. This will lead insurers to significantly
increase premiums on everyone. See Brief for America’s
Health Insurance Plans et al. as Amici Curiae in No. 11–
393 etc. 8–9.
The individual mandate was Congress’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.
1
The Government contends that the individual mandate
is within Congress’s power because the failure to pur-
chase insurance “has a substantial and deleterious effect
on interstate commerce” by creating the cost-shifting prob-
lem. Brief for United States 34. The path of our Com-
merce Clause decisions has not always run smooth, see
United States v. Lopez, 514 U. S. 549, 552–559 (1995), but
it is now well established that Congress has broad author-
ity under the Clause. We have recognized, for example,
that “[t]he power of Congress over interstate commerce is
not confined to the regulation of commerce among the
states,” but extends to activities that “have a substantial
effect on interstate commerce.” United States v. Darby,
312 U. S. 100, 118–119 (1941). Congress’s power, more-
over, is not limited to regulation of an activity that by itself
substantially affects interstate commerce, but also extends
18
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Opinion of ROBERTS, C. J.
to activities that do so only when aggregated with similar
activities of others. See Wickard, 317 U. S., at 127–128.
Given its expansive scope, it is no surprise that Con-
gress 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.3 Legislative novelty is not nec-
essarily fatal; there is a first time for everything. But
sometimes “the most telling indication of [a] severe con-
stitutional problem . . . is the lack of historical precedent”
for Congress’s action. Free Enterprise Fund v. Public Com-
pany Accounting Oversight Bd., 561 U. S. ___, ___ (2010)
(slip op., at 25) (internal quotation marks omitted). At the
very least, we should “pause to consider the implications of
the Government’s arguments” when confronted with such
new conceptions of federal power. Lopez, supra, at 564.
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 com-
mercial activity to be regulated. If the power to “regulate”
something included the power to create it, many of the
provisions in the Constitution would be superfluous. For
example, the Constitution gives Congress the power to
“coin Money,” in addition to the power to “regulate the
Value thereof.” Id., cl. 5. And it gives Congress the power
——————
3
The examples of other congressional mandates cited by JUSTICE
GINSBURG, post, at 35, n. 10 (opinion concurring in part, concurring in
judgment in part, and dissenting in part), are not to the contrary. Each
of those mandates—to report for jury duty, to register for the draft, to
purchase firearms in anticipation of militia service, to exchange gold
currency for paper currency, and to file a tax return—are based on
constitutional provisions other than the Commerce Clause. See Art. I,
§8, cl. 9 (to “constitute Tribunals inferior to the supreme Court”); id.,
cl. 12 (to “raise and support Armies”); id., cl. 16 (to “provide for organiz-
ing, arming, and disciplining, the Militia”); id., cl. 5 (to “coin Money”);
id., cl. 1 (to “lay and collect Taxes”).
19
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Opinion of ROBERTS, C. J.
to “raise and support Armies” and to “provide and main-
tain a Navy,” in addition to the power to “make Rules
for the Government and Regulation of the land and naval
Forces.” Id., cls. 12–14. If the power to regulate the
armed forces or the value of money included the power to
bring the subject of the regulation into existence, the
specific grant of such powers would have been unneces-
sary. The language of the Constitution reflects the natu-
ral understanding that the power to regulate assumes
there is already something to be regulated. See Gibbons, 9
Wheat., at 188 (“[T]he enlightened patriots who framed
our constitution, and the people who adopted it, must be
understood to have employed words in their natural sense,
and to have intended what they have said”).4
Our precedent also reflects this understanding. As
expansive as our cases construing the scope of the com-
merce power have been, they all have one thing in com-
mon: They uniformly describe the power as reaching
“activity.” It is nearly impossible to avoid the word when
quoting them. See, e.g., Lopez, supra, at 560 (“Where
economic activity substantially affects interstate com-
merce, legislation regulating that activity will be sus-
——————
4
JUSTICE GINSBURG suggests that “at the time the Constitution was
framed, to ‘regulate’ meant, among other things, to require action.”
Post, at 23 (citing Seven-Sky v. Holder, 661 F. 3d 1, 16 (CADC 2011);
brackets and some internal quotation marks omitted). But to reach
this conclusion, the case cited by JUSTICE GINSBURG relied on a diction-
ary in which “[t]o order; to command” was the fifth-alternative defini-
tion of “to direct,” which was itself the second-alternative definition of
“to regulate.” See Seven-Sky, supra, at 16 (citing S. Johnson, Diction-
ary of the English Language (4th ed. 1773) (reprinted 1978)). It is
unlikely that the Framers had such an obscure meaning in mind when
they used the word “regulate.” Far more commonly, “[t]o regulate”
meant “[t]o adjust by rule or method,” which presupposes something to
adjust. 2 Johnson, supra, at 1619; see also Gibbons, 9 Wheat., at 196
(defining the commerce power as the power “to prescribe the rule by
which commerce is to be governed”).
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v. SEBELIUS
Opinion of ROBERTS, C. J.
tained”); Perez, 402 U. S., at 154 (“Where the class of
activities is regulated and that class is within the reach of
federal power, the courts have no power to excise, as triv-
ial, individual instances of the class” (emphasis in original;
internal quotation marks omitted)); Wickard, supra, at
125 (“[E]ven if appellee’s activity be local and though it
may not be regarded as commerce, it may still, whatever
its nature, be reached by Congress if it exerts a substan-
tial economic effect on interstate commerce”); NLRB v.
Jones & Laughlin Steel Corp., 301 U. S. 1, 37 (1937) (“Al-
though activities may be intrastate in character when
separately considered, if they have such a close and sub-
stantial relation to interstate commerce that their control
is essential or appropriate to protect that commerce from
burdens and obstructions, Congress cannot be denied the
power to exercise that control”); see also post, at 15, 25–26,
28, 32 (GINSBURG, J., concurring in part, concurring in
judgment in part, and dissenting in part).5
The individual mandate, however, does not regulate
existing commercial activity. It instead compels individ-
uals 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 Con-
gress to regulate individuals precisely because they are
doing nothing would open a new and potentially vast do-
main to congressional authority. Every day individuals do
not do an infinite number of things. In some cases they
——————
5
JUSTICE GINSBURG cites two eminent domain cases from the 1890s to
support the proposition that our case law does not “toe the activity
versus inactivity line.” Post, at 24–25 (citing Monongahela Nav. Co. v.
United States, 148 U. S. 312, 335–337 (1893), and Cherokee Nation v.
Southern Kansas R. Co., 135 U. S. 641, 657–659 (1890)). The fact that
the Fifth Amendment requires the payment of just compensation
when the Government exercises its power of eminent domain does not
turn the taking into a commercial transaction between the landowner
and the Government, let alone a government-compelled transaction
between the landowner and a third party.
21
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Opinion of ROBERTS, C. J.
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, and—under the
Government’s theory—empower Congress to make those
decisions for him.
Applying the Government’s logic to the familiar case of
Wickard v. Filburn shows how far that logic would carry
us from the notion of a government of limited powers. In
Wickard, the Court famously upheld a federal penalty im-
posed on a farmer for growing wheat for consumption
on his own farm. 317 U. S., at 114–115, 128–129. That
amount of wheat caused the farmer to exceed his quota
under a program designed to support the price of wheat by
limiting supply. The Court rejected the farmer’s argument
that growing wheat for home consumption was beyond the
reach of the commerce power. It did so on the ground that
the farmer’s decision to grow wheat for his own use al-
lowed him to avoid purchasing wheat in the market. That
decision, when considered in the aggregate along with sim-
ilar decisions of others, would have had a substantial ef-
fect on the interstate market for wheat. Id., at 127–129.
Wickard has long been regarded as “perhaps the most
far reaching example of Commerce Clause authority over
intrastate activity,” Lopez, 514 U. S., at 560, but the Gov-
ernment’s theory in this case would go much further.
Under Wickard it is within Congress’s power to regulate
the market for wheat by supporting its price. But price
can be supported by increasing demand as well as by
decreasing supply. The aggregated decisions of some
consumers not to purchase wheat have a substantial effect
on the price of wheat, just as decisions not to purchase
health insurance have on the price of insurance. Congress
can therefore command that those not buying wheat do so,
just as it argues here that it may command that those not
22
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Opinion of ROBERTS, C. J.
buying health insurance do so. The farmer in Wickard
was at least actively engaged in the production of wheat,
and the Government could regulate that activity because
of its effect on commerce. The Government’s theory here
would effectively override that limitation, by establishing
that individuals may be regulated under the Commerce
Clause whenever enough of them are not doing something
the Government would have them do.
Indeed, the Government’s logic would justify a manda-
tory purchase to solve almost any problem. See Seven-Sky,
661 F. 3d, at 14–15 (noting the Government’s inability
to “identify any mandate to purchase a product or ser-
vice in interstate commerce that would be unconstitu-
tional” under its theory of the commerce power). 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. See, e.g., Dept. of Agriculture
and Dept. of Health and Human Services, Dietary Guide-
lines for Americans 1 (2010). The failure of that group
to have a healthy diet increases health care costs, to a
greater extent than the failure of the uninsured to pur-
chase insurance. See, e.g., Finkelstein, Trogdon, Cohen, &
Dietz, Annual Medical Spending Attributable to Obesity:
Payer- and Service-Specific Estimates, 28 Health Affairs
w822 (2009) (detailing the “undeniable link between ris-
ing rates of obesity and rising medical spending,” and esti-
mating that “the annual medical burden of obesity has
risen to almost 10 percent of all medical spending and
could amount to $147 billion per year in 2008”). Those in-
creased costs are borne in part by other Americans who
must pay more, just as the uninsured shift costs to the
insured. See Center for Applied Ethics, Voluntary Health
Risks: Who Should Pay?, 6 Issues in Ethics 6 (1993) (not-
ing “overwhelming evidence that individuals with un-
healthy habits pay only a fraction of the costs associated
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with their behaviors; most of the expense is borne by the
rest of society in the form of higher insurance premiums,
government expenditures for health care, and disability
benefits”). Congress addressed the insurance problem by
ordering everyone to buy insurance. Under the Gov-
ernment’s theory, Congress could address the diet problem
by ordering everyone to buy vegetables. See Dietary
Guidelines, supra, at 19 (“Improved nutrition, appropriate
eating behaviors, and increased physical activity have tre-
mendous potential to . . . reduce health care costs”).
People, for reasons of their own, often fail to do things
that would be good for them or good for society. Those
failures—joined with the similar failures of others—can
readily have a substantial effect on interstate commerce.
Under the Government’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 “an addition which few oppose and from which
no apprehensions are entertained.” The Federalist No. 45,
at 293. While Congress’s authority under the Commerce
Clause has of course expanded with the growth of the
national economy, our cases have “always recognized that
the power to regulate commerce, though broad indeed, has
limits.” Maryland v. Wirtz, 392 U. S. 183, 196 (1968). The
Government’s theory would erode those limits, permitting
Congress to reach beyond the natural extent of its author-
ity, “everywhere extending the sphere of its activity and
drawing all power into its impetuous vortex.” The Feder-
alist No. 48, at 309 (J. Madison). Congress already enjoys
vast power to regulate much of what we do. Accepting
the Government’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
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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 “practical statesmen,” not meta-
physical philosophers. Industrial Union Dept., AFL–CIO
v. American Petroleum Institute, 448 U. S. 607, 673 (1980)
(Rehnquist, J., concurring in judgment). As we have ex-
plained, “the framers of the Constitution were not mere
visionaries, toying with speculations or theories, but
practical men, dealing with the facts of political life as
they understood them, putting into form the government
they were creating, and prescribing in language clear
and intelligible the powers that government was to take.”
South Carolina v. United States, 199 U. S. 437, 449 (1905).
The Framers gave Congress the power to regulate com-
merce, not to compel it, and for over 200 years both our
decisions and Congress’s actions have reflected this un-
derstanding. There is no reason to depart from that un-
derstanding now.
The Government sees things differently. It argues that
because sickness and injury are unpredictable but una-
voidable, “the uninsured as a class are active in the mar-
ket for health care, which they regularly seek and obtain.”
Brief for United States 50. The individual mandate
“merely regulates how individuals finance and pay for that
——————
6
In an attempt to recast the individual mandate as a regulation of
commercial activity, JUSTICE GINSBURG suggests that “[a]n individual
who opts not to purchase insurance from a private insurer can be seen
as actively selecting another form of insurance: self-insurance.” Post, at
26. But “self-insurance” is, in this context, nothing more than a de-
scription of the failure to purchase insurance. Individuals are no more
“activ[e] in the self-insurance market” when they fail to purchase
insurance, ibid., than they are active in the “rest” market when doing
nothing.
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active participation—requiring that they do so through
insurance, rather than through attempted self-insurance
with the back-stop of shifting costs to others.” Ibid.
The Government repeats the phrase “active in the mar-
ket for health care” throughout its brief, see id., at 7, 18,
34, 50, but that concept has no constitutional significance.
An individual who bought a car two years ago and may
buy another in the future is not “active in the car market”
in any pertinent sense. The phrase “active in the market”
cannot obscure the fact that most of those regulated by
the individual mandate are not currently engaged in any
commercial activity involving health care, and that fact is
fatal to the Government’s effort to “regulate the uninsured
as a class.” Id., at 42. Our precedents recognize Con-
gress’s power to regulate “class[es] of activities,” Gonzales
v. Raich, 545 U. S. 1, 17 (2005) (emphasis added), not
classes of individuals, apart from any activity in which
they are engaged, see, e.g., Perez, 402 U. S., at 153 (“Peti-
tioner is clearly a member of the class which engages in
‘extortionate credit transactions’ . . .” (emphasis deleted)).
The individual mandate’s regulation of the uninsured as
a class is, in fact, particularly divorced from any link to
existing commercial activity. The mandate primarily
affects healthy, often young adults who are less likely to
need significant health care and have other priorities for
spending their money. It is precisely because these indi-
viduals, as an actuarial class, incur relatively low health
care costs that the mandate helps counter the effect of
forcing insurance companies to cover others who impose
greater costs than their premiums are allowed to reflect.
See 42 U. S. C. §18091(2)(I) (recognizing that the mandate
would “broaden the health insurance risk pool to include
healthy individuals, which will lower health insurance
premiums”). If the individual mandate is targeted at a
class, it is a class whose commercial inactivity rather than
activity is its defining feature.
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The Government, however, claims that this does not
matter. The Government regards it as sufficient to trigger
Congress’s authority that almost all those who are unin-
sured will, at some unknown point in the future, engage
in a health care transaction. Asserting that “[t]here is no
temporal limitation in the Commerce Clause,” the Gov-
ernment argues that because “[e]veryone subject to this
regulation is in or will be in the health care market,” they
can be “regulated in advance.” Tr. of Oral Arg. 109 (Mar.
27, 2012).
The proposition that Congress may dictate the conduct
of an individual today because of prophesied future ac-
tivity finds no support in our precedent. We have said that
Congress can anticipate the effects on commerce of an eco-
nomic activity. See, e.g., Consolidated Edison Co. v. NLRB,
305 U. S. 197 (1938) (regulating the labor practices of
utility companies); Heart of Atlanta Motel, Inc. v. United
States, 379 U. S. 241 (1964) (prohibiting discrimination by
hotel operators); Katzenbach v. McClung, 379 U. S. 294
(1964) (prohibiting discrimination by restaurant owners).
But we have never permitted Congress to anticipate that
activity itself in order to regulate individuals not currently
engaged in commerce. Each one of our cases, including
those cited by JUSTICE GINSBURG, post, at 20–21, involved
preexisting economic activity. See, e.g., Wickard, 317
U. S., at 127–129 (producing wheat); Raich, supra, at 25
(growing marijuana).
Everyone will likely participate in the markets for food,
clothing, transportation, shelter, or energy; that does not
authorize Congress to direct them to purchase particular
products in those or other markets today. The Commerce
Clause is not a general license to regulate an individual
from cradle to grave, simply because he will predictably
engage in particular transactions. Any police power to
regulate individuals as such, as opposed to their activities,
remains vested in the States.
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The Government argues that the individual mandate
can be sustained as a sort of exception to this rule, because
health insurance is a unique product. According to the
Government, upholding the individual mandate would
not justify mandatory purchases of items such as cars or
broccoli because, as the Government puts it, “[h]ealth in-
surance is not purchased for its own sake like a car or
broccoli; it is a means of financing health-care consump-
tion and covering universal risks.” Reply Brief for United
States 19. But cars and broccoli are no more purchased
for their “own sake” than health insurance. They are
purchased to cover the need for transportation and food.
The Government says that health insurance and health
care financing are “inherently integrated.” 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 “inherently integrated” 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 lack-
ing to justify an exception of the sort urged by the Gov-
ernment. The individual mandate forces individuals
into commerce precisely because they elected to refrain
from commercial activity. Such a law cannot be sus-
tained under a clause authorizing Congress to “regulate
Commerce.”
2
The Government next contends that Congress has the
power under the Necessary and Proper Clause to enact the
individual mandate because the mandate is an “integral
part of a comprehensive scheme of economic regulation”—
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the guaranteed-issue and community-rating insurance
reforms. Brief for United States 24. Under this argu-
ment, it is not necessary to consider the effect that an
individual’s inactivity may have on interstate commerce; it
is enough that Congress regulate commercial activity in a
way that requires regulation of inactivity to be effective.
The power to “make all Laws which shall be necessary
and proper for carrying into Execution” the powers enu-
merated in the Constitution, Art. I, §8, cl. 18, vests Con-
gress with authority to enact provisions “incidental to the
[enumerated] power, and conducive to its beneficial exer-
cise,” McCulloch, 4 Wheat., at 418. Although the Clause
gives Congress authority to “legislate on that vast mass
of incidental powers which must be involved in the con-
stitution,” it does not license the exercise of any “great
substantive and independent power[s]” beyond those specifi-
cally enumerated. Id., at 411, 421. Instead, the Clause is
“ ‘merely a declaration, for the removal of all uncertainty,
that the means of carrying into execution those [powers]
otherwise granted are included in the grant.’ ” Kinsella v.
United States ex rel. Singleton, 361 U. S. 234, 247 (1960)
(quoting VI Writings of James Madison 383 (G. Hunt ed.
1906)).
As our jurisprudence under the Necessary and Proper
Clause has developed, we have been very deferential to
Congress’s determination that a regulation is “necessary.”
We have thus upheld laws that are “ ‘convenient, or use-
ful’ or ‘conducive’ to the authority’s ‘beneficial exercise.’ ”
Comstock, 560 U. S., at ___ (slip op., at 5) (quoting McCul-
loch, supra, at 413, 418). But we have also carried out our
responsibility to declare unconstitutional those laws that
undermine the structure of government established by the
Constitution. Such laws, which are not “consist[ent] with
the letter and spirit of the constitution,” McCulloch, supra,
at 421, are not “proper [means] for carrying into Execu-
tion” Congress’s enumerated powers. Rather, they are, “in
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the words of The Federalist, ‘merely acts of usurpation’
which ‘deserve to be treated as such.’ ” Printz v. United
States, 521 U. S. 898, 924 (1997) (alterations omitted)
(quoting The Federalist No. 33, at 204 (A. Hamilton)); see
also New York, 505 U. S., at 177; Comstock, supra, at ___
(slip op., at 5) (KENNEDY, J., concurring in judgment) (“It
is of fundamental importance to consider whether essen-
tial attributes of state sovereignty are compromised by the
assertion of federal power under the Necessary and Proper
Clause . . .”).
Applying these principles, the individual mandate can-
not be sustained under the Necessary and Proper Clause
as an essential component of the insurance reforms. Each
of our prior cases upholding laws under that Clause in-
volved exercises of authority derivative of, and in service
to, a granted power. For example, we have upheld provi-
sions permitting continued confinement of those already
in federal custody when they could not be safely released,
Comstock, supra, at ___ (slip op., at 1–2); criminaliz-
ing bribes involving organizations receiving federal funds,
Sabri v. United States, 541 U. S. 600, 602, 605 (2004); and
tolling state statutes of limitations while cases are pend-
ing in federal court, Jinks v. Richland County, 538
U. S. 456, 459, 462 (2003). The individual mandate, by con-
trast, vests Congress with the extraordinary ability to
create the necessary predicate to the exercise of an enu-
merated power.
This is in no way an authority that is “narrow in scope,”
Comstock, supra, at ___ (slip op., at 20), or “incidental” to
the exercise of the commerce power, McCulloch, supra, at
418. Rather, such a conception of the Necessary and
Proper Clause would work a substantial expansion of
federal authority. No longer would Congress be limited to
regulating under the Commerce Clause those who by some
preexisting activity bring themselves within the sphere of
federal regulation. Instead, Congress could reach beyond
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the natural limit of its authority and draw within its
regulatory scope those who otherwise would be outside of
it. Even if the individual mandate is “necessary” to the
Act’s insurance reforms, such an expansion of federal
power is not a “proper” means for making those reforms
effective.
The Government relies primarily on our decision in
Gonzales v. Raich. In Raich, we considered “comprehen-
sive legislation to regulate the interstate market” in mari-
juana. 545 U. S., at 22. Certain individuals sought an
exemption from that regulation on the ground that they
engaged in only intrastate possession and consumption.
We denied any exemption, on the ground that marijuana
is a fungible commodity, so that any marijuana could
be readily diverted into the interstate market. Congress’s
attempt to regulate the interstate market for marijuana
would therefore have been substantially undercut if it
could not also regulate intrastate possession and con-
sumption. Id., at 19. Accordingly, we recognized that
“Congress was acting well within its authority” under the
Necessary and Proper Clause even though its “regulation
ensnare[d] some purely intrastate activity.” Id., at 22; see
also Perez, 402 U. S., at 154. Raich thus did not involve
the exercise of any “great substantive and independent
power,” McCulloch, supra, at 411, of the sort at issue here.
Instead, it concerned only the constitutionality of “indi-
vidual applications of a concededly valid statutory
scheme.” Raich, supra, at 23 (emphasis added).
Just as the individual mandate cannot be sustained as
a law regulating the substantial effects of the failure to
purchase health insurance, neither can it be upheld as
a “necessary and proper” component of the insurance re-
forms. The commerce power thus does not authorize the
mandate. Accord, post, at 4–16 (joint opinion of SCALIA,
KENNEDY, THOMAS, and ALITO, JJ., dissenting).
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B
That is not the end of the matter. Because the Com-
merce Clause does not support the individual mandate, it
is necessary to turn to the Government’s second argument:
that the mandate may be upheld as within Congress’s
enumerated power to “lay and collect Taxes.” Art. I, §8,
cl. 1.
The Government’s tax power argument asks us to view
the statute differently than we did in considering its com-
merce power theory. In making its Commerce Clause
argument, the Government defended the mandate as a
regulation requiring individuals to purchase health in-
surance. The Government does not claim that the taxing
power allows Congress to issue such a command. Instead,
the Government asks us to read the mandate not as order-
ing individuals to buy insurance, but rather as imposing a
tax on those who do not buy that product.
The text of a statute can sometimes have more than one
possible meaning. To take a familiar example, a law that
reads “no vehicles in the park” might, or might not, ban
bicycles in the park. And it is well established that if
a statute has two possible meanings, one of which violates
the Constitution, courts should adopt the meaning that
does not do so. Justice Story said that 180 years ago: “No
court ought, unless the terms of an act rendered it una-
voidable, to give a construction to it which should involve
a violation, however unintentional, of the constitution.”
Parsons v. Bedford, 3 Pet. 433, 448–449 (1830). Justice
Holmes made the same point a century later: “[T]he rule is
settled that as between two possible interpretations of a
statute, by one of which it would be unconstitutional and
by the other valid, our plain duty is to adopt that which
will save the Act.” Blodgett v. Holden, 275 U. S. 142, 148
(1927) (concurring opinion).
The most straightforward reading of the mandate is
that it commands individuals to purchase insurance.
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After all, it states that individuals “shall” maintain health
insurance. 26 U. S. C. §5000A(a). Congress thought it
could enact such a command under the Commerce Clause,
and the Government primarily defended the law on that
basis. But, for the reasons explained above, the Com-
merce Clause does not give Congress that power. Under
our precedent, it is therefore necessary to ask whether the
Government’s alternative reading of the statute—that it
only imposes a tax on those without insurance—is a rea-
sonable one.
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 §5000A(b). That, according to the Government,
means the mandate can be regarded as establishing a
condition—not owning health insurance—that triggers a
tax—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 earn-
ing 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 Congress’s constitutional power to tax.
The question is not whether that is the most natural
interpretation of the mandate, but only whether it is a
“fairly possible” one. Crowell v. Benson, 285 U. S. 22, 62
(1932). As we have explained, “every reasonable construc-
tion must be resorted to, in order to save a statute from
unconstitutionality.” Hooper v. California, 155 U. S. 648,
657 (1895). The Government asks us to interpret the
mandate as imposing a tax, if it would otherwise violate
the Constitution. Granting the Act the full measure of
deference owed to federal statutes, it can be so read, for
the reasons set forth below.
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C
The exaction the Affordable Care Act imposes on those
without health insurance looks like a tax in many re-
spects. The “[s]hared responsibility payment,” as the
statute entitles it, is paid into the Treasury by “tax-
payer[s]” when they file their tax returns. 26 U. S. C.
§5000A(b). It does not apply to individuals who do not
pay federal income taxes because their household income
is less than the filing threshold in the Internal Revenue
Code. §5000A(e)(2). For taxpayers who do owe the pay-
ment, its amount is determined by such familiar factors as
taxable income, number of dependents, and joint filing
status. §§5000A(b)(3), ©(2), ©(4). The requirement to
pay is found in the Internal Revenue Code and enforced by
the IRS, which—as we previously explained—must assess
and collect it “in the same manner as taxes.” Supra, at
13–14. This process yields the essential feature of any tax:
it produces at least some revenue for the Government.
United States v. Kahriger, 345 U. S. 22, 28, n. 4 (1953).
Indeed, the payment is expected to raise about $4 billion
per year by 2017. Congressional Budget Office, Payments
of Penalties for Being Uninsured Under the Patient Pro-
tection and Affordable Care Act (Apr. 30, 2010), in Selected
CBO Publications Related to Health Care Legislation,
2009–2010, p. 71 (rev. 2010).
It is of course true that the Act describes the payment as
a “penalty,” not a “tax.” But while that label is fatal to the
application of the Anti-Injunction Act, supra, at 12–13, it
does not determine whether the payment may be viewed
as an exercise of Congress’s taxing power. It is up to Con-
gress whether to apply the Anti-Injunction Act to any
particular statute, so it makes sense to be guided by Con-
gress’s choice of label on that question. That choice does
not, however, control whether an exaction is within Con-
gress’s constitutional power to tax.
Our precedent reflects this: In 1922, we decided two
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Opinion of the Court
challenges to the “Child Labor Tax” on the same day. In
the first, we held that a suit to enjoin collection of the so-
called tax was barred by the Anti-Injunction Act. George,
259 U. S., at 20. Congress knew that suits to obstruct
taxes had to await payment under the Anti-Injunction
Act; Congress called the child labor tax a tax; Congress
therefore intended the Anti-Injunction Act to apply. In
the second case, however, we held that the same exaction,
although labeled a tax, was not in fact authorized by Con-
gress’s taxing power. Drexel Furniture, 259 U. S., at 38.
That constitutional question was not controlled by Con-
gress’s choice of label.
We have similarly held that exactions not labeled taxes
nonetheless were authorized by Congress’s power to tax.
In the License Tax Cases, for example, we held that federal
licenses to sell liquor and lottery tickets—for which the
licensee had to pay a fee—could be sustained as exercises
of the taxing power. 5 Wall., at 471. And in New York v.
United States we upheld as a tax a “surcharge” on out-of-
state nuclear waste shipments, a portion of which was
paid to the Federal Treasury. 505 U. S., at 171. We thus
ask whether the shared responsibility payment falls
within Congress’s taxing power, “[d]isregarding the designa-
tion of the exaction, and viewing its substance and appli-
cation.” United States v. Constantine, 296 U. S. 287, 294
(1935); cf. Quill Corp. v. North Dakota, 504 U. S. 298, 310
(1992) (“[M]agic words or labels” should not “disable an
otherwise constitutional levy” (internal quotation marks
omitted)); Nelson v. Sears, Roebuck & Co., 312 U. S. 359,
363 (1941) (“In passing on the constitutionality of a tax
law, we are concerned only with its practical operation,
not its definition or the precise form of descriptive words
which may be applied to it” (internal quotation marks
omitted)); United States v. Sotelo, 436 U. S. 268, 275
(1978) (“That the funds due are referred to as a ‘penalty’
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Opinion of the Court
. . . does not alter their essential character as taxes”).7
Our cases confirm this functional approach. For ex-
ample, in Drexel Furniture, we focused on three practical
characteristics of the so-called tax on employing child
laborers that convinced us the “tax” was actually a pen-
alty. First, the tax imposed an exceedingly heavy bur-
den—10 percent of a company’s net income—on those who
employed children, no matter how small their infraction.
Second, it imposed that exaction only on those who know-
ingly employed underage laborers. Such scienter require-
ments are typical of punitive statutes, because Congress
often wishes to punish only those who intentionally break
the law. Third, this “tax” was enforced in part by the
Department of Labor, an agency responsible for pun-
ishing violations of labor laws, not collecting revenue. 259
U. S., at 36–37; see also, e.g., Kurth Ranch, 511 U. S., at
780–782 (considering, inter alia, the amount of the exac-
tion, and the fact that it was imposed for violation of a
separate criminal law); Constantine, supra, at 295 (same).
The same analysis here suggests that the shared re-
sponsibility payment may for constitutional purposes be
considered a tax, not a penalty: First, for most Americans
the amount due will be far less than the price of insur-
ance, and, by statute, it can never be more.8 It may often
——————
7
Sotelo, in particular, would seem to refute the joint dissent’s conten-
tion that we have “never” treated an exaction as a tax if it was denomi-
nated a penalty. Post, at 20. We are not persuaded by the dissent’s
attempt to distinguish Sotelo as a statutory construction case from the
bankruptcy context. Post, at 17, n. 5. The dissent itself treats the
question here as one of statutory interpretation, and indeed also relies
on a statutory interpretation case from the bankruptcy context. Post,
at 23 (citing United States v. Reorganized CF&I Fabricators of Utah,
Inc., 518 U. S. 213, 224 (1996)).
8
In 2016, for example, individuals making $35,000 a year are ex-
pected to owe the IRS about $60 for any month in which they do not
have health insurance. Someone with an annual income of $100,000 a
year would likely owe about $200. The price of a qualifying insurance
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be a reasonable financial decision to make the payment
rather than purchase insurance, unlike the “prohibitory”
financial punishment in Drexel Furniture. 259 U. S., at
37. Second, the individual mandate contains no scienter
requirement. Third, the payment is collected solely by the
IRS through the normal means of taxation—except that
the Service is not allowed to use those means most sugges-
tive of a punitive sanction, such as criminal prosecution.
See §5000A(g)(2). The reasons the Court in Drexel Furni-
ture held that what was called a “tax” there was a penalty
support the conclusion that what is called a “penalty” here
may be viewed as a tax.9
None of this is to say that the payment is not intended
to affect individual conduct. Although the payment will
raise considerable revenue, it is plainly designed to ex-
pand health insurance coverage. But taxes that seek to
influence conduct are nothing new. Some of our earliest
federal taxes sought to deter the purchase of imported
manufactured goods in order to foster the growth of do-
mestic industry. See W. Brownlee, Federal Taxation in
America 22 (2d ed. 2004); cf. 2 J. Story, Commentaries on
the Constitution of the United States §962, p. 434 (1833)
(“the taxing power is often, very often, applied for other
purposes, than revenue”). Today, federal and state taxes
can compose more than half the retail price of cigarettes,
——————
policy is projected to be around $400 per month. See D. Newman, CRS
Report for Congress, Individual Mandate and Related Information Re-
quirements Under PPACA 7, and n. 25 (2011).
9
We do not suggest that any exaction lacking a scienter requirement
and enforced by the IRS is within the taxing power. See post, at 23–24
(joint opinion of SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting).
Congress could not, for example, expand its authority to impose crimi-
nal fines by creating strict liability offenses enforced by the IRS rather
than the FBI. But the fact the exaction here is paid like a tax, to the
agency that collects taxes—rather than, for example, exacted by De-
partment of Labor inspectors after ferreting out willful malfeasance—
suggests that this exaction may be viewed as a tax.
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not just to raise more money, but to encourage people to
quit smoking. And we have upheld such obviously regula-
tory measures as taxes on selling marijuana and sawed-off
shotguns. See United States v. Sanchez, 340 U. S. 42, 44–
45 (1950); Sonzinsky v. United States, 300 U. S. 506, 513
(1937). Indeed, “[e]very tax is in some measure regula-
tory. To some extent it interposes an economic impediment
to the activity taxed as compared with others not taxed.”
Sonzinsky, supra, at 513. That §5000A seeks to shape
decisions about whether to buy health insurance does not
mean that it cannot be a valid exercise of the taxing
power.
In distinguishing penalties from taxes, this Court has
explained that “if the concept of penalty means anything,
it means punishment for an unlawful act or omission.”
United States v. Reorganized CF&I Fabricators of Utah,
Inc., 518 U. S. 213, 224 (1996); see also United States v. La
Franca, 282 U. S. 568, 572 (1931) (“[A] penalty, as the
word is here used, is an exaction imposed by statute as
punishment for an unlawful act”). While the individual
mandate clearly aims to induce the purchase of health
insurance, it need not be read to declare that failing to do
so is unlawful. Neither the Act nor any other law attaches
negative legal consequences to not buying health insur-
ance, beyond requiring a payment to the IRS. The Gov-
ernment agrees with that reading, confirming that if
someone chooses to pay rather than obtain health insur-
ance, they have fully complied with the law. Brief for
United States 60–61; Tr. of Oral Arg. 49–50 (Mar. 26,
2012).
Indeed, it is estimated that four million people each year
will choose to pay the IRS rather than buy insurance. See
Congressional Budget Office, supra, at 71. We would
expect Congress to be troubled by that prospect if such
conduct were unlawful. That Congress apparently regards
such extensive failure to comply with the mandate as
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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 citi-
zens may lawfully choose to pay in lieu of buying health
insurance.
The plaintiffs contend that Congress’s choice of lan-
guage—stating that individuals “shall” obtain insurance
or pay a “penalty”—requires reading §5000A as punishing
unlawful conduct, even if that interpretation would ren-
der the law unconstitutional. We have rejected a similar
argument before. In New York v. United States we exam-
ined a statute providing that “ ‘[e]ach State shall be re-
sponsible for providing . . . for the disposal of . . . low-level
radioactive waste.’ ” 505 U. S., at 169 (quoting 42 U. S. C.
§2021c(a)(1)(A)). A State that shipped its waste to another
State was exposed to surcharges by the receiving State,
a portion of which would be paid over to the Federal
Government. And a State that did not adhere to the
statutory scheme faced “[p]enalties for failure to comply,”
including increases in the surcharge. §2021e(e)(2); New
York, 505 U. S., at 152–153. New York urged us to read
the statute as a federal command that the state legisla-
ture enact legislation to dispose of its waste, which would
have violated the Constitution. To avoid that outcome, we
interpreted the statute to impose only “a series of incen-
tives” for the State to take responsibility for its waste. We
then sustained the charge paid to the Federal Government
as an exercise of the taxing power. Id., at 169–174. We
see no insurmountable obstacle to a similar approach
here.10
——————
10
The joint dissent attempts to distinguish New York v. United States
on the ground that the seemingly imperative language in that case was
in an “introductory provision” that had “no legal consequences.” Post,
at 19. We did not rely on that reasoning in New York. See 505 U. S., at
169–170. Nor could we have. While the Court quoted only the broad
statement that “[e]ach State shall be responsible” for its waste, that
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The joint dissenters argue that we cannot uphold
§5000A as a tax because Congress did not “frame” it as
such. Post, at 17. In effect, they contend that even if
the Constitution permits Congress to do exactly what we
interpret this statute to do, the law must be struck down
because Congress used the wrong labels. An example may
help illustrate why labels should not control here. Sup-
pose Congress enacted a statute providing that every
taxpayer who owns a house without energy efficient win-
dows must pay $50 to the IRS. The amount due is adjusted
based on factors such as taxable income and joint filing
status, and is paid along with the taxpayer’s income tax
return. Those whose income is below the filing threshold
need not pay. The required payment is not called a “tax,”
a “penalty,” or anything else. No one would doubt that
this law imposed a tax, and was within Congress’s power
to tax. That conclusion should not change simply because
Congress used the word “penalty” to describe the pay-
ment. Interpreting such a law to be a tax would hardly
“[i]mpos[e] a tax through judicial legislation.” Post, at 25.
Rather, it would give practical effect to the Legislature’s
enactment.
Our precedent demonstrates that Congress had the
power to impose the exaction in §5000A under the taxing
power, and that §5000A need not be read to do more than
impose a tax. That is sufficient to sustain it. The “ques-
tion of the constitutionality of action taken by Congress
does not depend on recitals of the power which it under-
takes to exercise.” Woods v. Cloyd W. Miller Co., 333 U. S.
——————
language was implemented through operative provisions that also use
the words on which the dissent relies. See 42 U. S. C. §2021e(e)(1)
(entitled “Requirements for non-sited compact regions and non-member
States” and directing that those entities “shall comply with the follow-
ing requirements”); §2021e(e)(2) (describing “Penalties for failure to
comply”). The Court upheld those provisions not as lawful commands,
but as “incentives.” See 505 U. S., at 152–153, 171–173.
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Opinion of the Court
138, 144 (1948).
Even if the taxing power enables Congress to impose
a tax on not obtaining health insurance, any tax must
still comply with other requirements in the Constitution.
Plaintiffs argue that the shared responsibility payment
does not do so, citing Article I, §9, clause 4. That clause
provides: “No Capitation, or other direct, Tax shall be laid,
unless in Proportion to the Census or Enumeration herein
before directed to be taken.” This requirement means that
any “direct Tax” must be apportioned so that each State
pays in proportion to its population. According to the
plaintiffs, if the individual mandate imposes a tax, it is a
direct tax, and it is unconstitutional because Congress
made no effort to apportion it among the States.
Even when the Direct Tax Clause was written it was
unclear what else, other than a capitation (also known as
a “head tax” or a “poll tax”), might be a direct tax. See
Springer v. United States, 102 U. S. 586, 596–598 (1881).
Soon after the framing, Congress passed a tax on owner-
ship of carriages, over James Madison’s objection that it
was an unapportioned direct tax. Id., at 597. This Court
upheld the tax, in part reasoning that apportioning such
a tax would make little sense, because it would have re-
quired taxing carriage owners at dramatically different
rates depending on how many carriages were in their
home State. See Hylton v. United States, 3 Dall. 171, 174
(1796) (opinion of Chase, J.). The Court was unanimous,
and those Justices who wrote opinions either directly
asserted or strongly suggested that only two forms of
taxation were direct: capitations and land taxes. See id.,
at 175; id., at 177 (opinion of Paterson, J.); id., at 183
(opinion of Iredell, J.).
That narrow view of what a direct tax might be per-
sisted for a century. In 1880, for example, we explained that
“direct taxes, within the meaning of the Constitution, are
only capitation taxes, as expressed in that instrument,
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and taxes on real estate.” Springer, supra, at 602. In
1895, we expanded our interpretation to include taxes on
personal property and income from personal property, in
the course of striking down aspects of the federal income
tax. Pollock v. Farmers’ Loan & Trust Co., 158 U. S. 601,
618 (1895). That result was overturned by the Sixteenth
Amendment, although we continued to consider taxes on
personal property to be direct taxes. See Eisner v. Macom-
ber, 252 U. S. 189, 218–219 (1920).
A tax on going without health insurance does not fall
within any recognized category of direct tax. It is not a
capitation. Capitations are taxes paid by every person,
“without regard to property, profession, or any other cir-
cumstance.” Hylton, supra, at 175 (opinion of Chase, J.)
(emphasis altered). The whole point of the shared respon-
sibility payment is that it is triggered by specific cir-
cumstances—earning a certain amount of income but not
obtaining health insurance. The payment is also plainly
not a tax on the ownership of land or personal property.
The shared responsibility payment is thus not a direct tax
that must be apportioned among the several States.
There may, however, be a more fundamental objection
to a tax on those who lack health insurance. Even if only
a tax, the payment under §5000A(b) remains a burden
that the Federal Government imposes for an omission, not
an act. If it is troubling to interpret the Commerce Clause
as authorizing Congress to regulate those who abstain
from commerce, perhaps it should be similarly troubling to
permit Congress to impose a tax for not doing something.
Three considerations allay this concern. First, and most
importantly, it is abundantly clear the Constitution does
not guarantee that individuals may avoid taxation through
inactivity. A capitation, after all, is a tax that every-
one must pay simply for existing, and capitations are
expressly contemplated by the Constitution. The Court
today holds that our Constitution protects us from federal
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regulation under the Commerce Clause so long as we ab-
stain from the regulated activity. But from its creation,
the Constitution has made no such promise with respect to
taxes. See Letter from Benjamin Franklin to M. Le Roy
(Nov. 13, 1789) (“Our new Constitution is now established
. . . but in this world nothing can be said to be certain,
except death and taxes”).
Whether the mandate can be upheld under the Com-
merce Clause is a question about the scope of federal
authority. Its answer depends on whether Congress can
exercise what all acknowledge to be the novel course of
directing individuals to purchase insurance. Congress’s
use of the Taxing Clause to encourage buying something
is, by contrast, not new. Tax incentives already promote,
for example, purchasing homes and professional educa-
tions. See 26 U. S. C. §§163(h), 25A. Sustaining the
mandate as a tax depends only on whether Congress has
properly exercised its taxing power to encourage purchas-
ing 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.
Second, Congress’s ability to use its taxing power to
influence conduct is not without limits. A few of our cases
policed these limits aggressively, invalidating punitive
exactions obviously designed to regulate behavior other-
wise regarded at the time as beyond federal authority.
See, e.g., United States v. Butler, 297 U. S. 1 (1936); Drexel
Furniture, 259 U. S. 20. More often and more recently
we have declined to closely examine the regulatory motive
or effect of revenue-raising measures. See Kahriger, 345
U. S., at 27–31 (collecting cases). We have nonetheless
maintained that “ ‘there comes a time in the extension of
the penalizing features of the so-called tax when it loses
its character as such and becomes a mere penalty with the
characteristics of regulation and punishment.’ ” Kurth
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Ranch, 511 U. S., at 779 (quoting Drexel Furniture, supra,
at 38).
We have already explained that the shared responsibil-
ity payment’s practical characteristics pass muster as a
tax under our narrowest interpretations of the taxing
power. Supra, at 35–36. Because the tax at hand is
within even those strict limits, we need not here decide the
precise point at which an exaction becomes so punitive
that the taxing power does not authorize it. It remains
true, however, that the “ ‘power to tax is not the power to
destroy while this Court sits.’ ” Oklahoma Tax Comm’n v.
Texas Co., 336 U. S. 342, 364 (1949) (quoting Panhandle
Oil Co. v. Mississippi ex rel. Knox, 277 U. S. 218, 223
(1928) (Holmes, J., dissenting)).
Third, although the breadth of Congress’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 Con-
gress may regulate a particular decision under the Com-
merce Clause, the Federal Government can bring its full
weight to bear. Congress may simply command individ-
uals 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 at-
tendant consequences of being branded a criminal: depri-
vation of otherwise protected civil rights, such as the right
to bear arms or vote in elections; loss of employment op-
portunities; social stigma; and severe disabilities in other
controversies, such as custody or immigration disputes.
By contrast, Congress’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 se-
vere burden that taxation—especially taxation motivated
by a regulatory purpose—can impose. But imposition
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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 Act’s requirement that certain in-
dividuals pay a financial penalty for not obtaining health
insurance may reasonably be characterized as a tax. Be-
cause the Constitution permits such a tax, it is not our role
to forbid it, or to pass upon its wisdom or fairness.
D
JUSTICE GINSBURG questions the necessity of rejecting
the Government’s commerce power argument, given that
§5000A can be upheld under the taxing power. Post, at 37.
But the statute reads more naturally as a command to buy
insurance than as a tax, and I would uphold it as a com-
mand if the Constitution allowed it. It is only because the
Commerce Clause does not authorize such a command
that it is necessary to reach the taxing power question.
And it is only because we have a duty to construe a stat-
ute to save it, if fairly possible, that §5000A can be inter-
preted as a tax. Without deciding the Commerce Clause
question, I would find no basis to adopt such a saving
construction.
The Federal Government does not have the power to
order people to buy health insurance. Section 5000A
would therefore be unconstitutional if read as a command.
The Federal Government does have the power to impose a
tax on those without health insurance. Section 5000A is
——————
11
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 (although
not for declining to make the shared responsibility payment, see 26
U. S. C. §5000A(g)(2)). But that does not show that the tax restricts the
lawful choice whether to undertake or forgo the activity on which the tax
is 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.
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therefore constitutional, because it can reasonably be read
as a tax.
IV
A
The States also contend that the Medicaid expansion
exceeds Congress’s authority under the Spending Clause.
They claim that Congress is coercing the States to adopt
the changes it wants by threatening to withhold all of a
State’s Medicaid grants, unless the State accepts the new
expanded funding and complies with the conditions that
come with it. This, they argue, violates the basic principle
that the “Federal Government may not compel the States
to enact or administer a federal regulatory program.” New
York, 505 U. S., at 188.
There is no doubt that the Act dramatically increases
state obligations under Medicaid. The current Medicaid
program requires States to cover only certain discrete
categories of needy individuals—pregnant women, chil-
dren, needy families, the blind, the elderly, and the dis-
abled. 42 U. S. C. §1396a(a)(10). There is no mandatory
coverage for most childless adults, and the States typically
do not offer any such coverage. The States also enjoy
considerable flexibility with respect to the coverage levels
for parents of needy families. §1396a(a)(10)(A)(ii). On
average States cover only those unemployed parents who
make less than 37 percent of the federal poverty level, and
only those employed parents who make less than 63 per-
cent of the poverty line. Kaiser Comm’n on Medicaid and
the Uninsured, Performing Under Pressure 11, and fig. 11
(2012).
The Medicaid provisions of the Affordable Care Act, in
contrast, require States to expand their Medicaid pro-
grams by 2014 to cover all individuals under the age of 65
with incomes below 133 percent of the federal poverty line.
§1396a(a)(10)(A)(i)(VIII). The Act also establishes a new
46
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“[e]ssential health benefits” package, which States must
provide to all new Medicaid recipients—a level sufficient
to satisfy a recipient’s obligations under the individual man-
date. §§1396a(k)(1), 1396u–7(b)(5), 18022(b). The Af-
fordable Care Act provides that the Federal Government
will pay 100 percent of the costs of covering these newly
eligible individuals through 2016. §1396d(y)(1). In the
following years, the federal payment level gradually de-
creases, to a minimum of 90 percent. Ibid. In light of
the expansion in coverage mandated by the Act, the Federal
Government estimates that its Medicaid spending will in-
crease by approximately $100 billion per year, nearly 40
percent above current levels. Statement of Douglas W.
Elmendorf, CBO’s Analysis of the Major Health Care
Legislation Enacted in March 2010, p. 14, Table 2 (Mar.
30, 2011).
The Spending Clause grants Congress the power “to pay
the Debts and provide for the . . . general Welfare of the
United States.” U. S. Const., Art. I, §8, cl. 1. We have
long recognized that Congress may use this power to grant
federal funds to the States, and may condition such a
grant upon the States’ “taking certain actions that Con-
gress could not require them to take.” College Savings Bank,
527 U. S., at 686. Such measures “encourage a State
to regulate in a particular way, [and] influenc[e] a State’s
policy choices.” New York, supra, at 166. The con-
ditions imposed by Congress ensure that the funds are
used by the States to “provide for the . . . general Welfare”
in the manner Congress intended.
At the same time, our cases have recognized limits on
Congress’s power under the Spending Clause to secure
state compliance with federal objectives. “We have re-
peatedly characterized . . . Spending Clause legislation as
‘much in the nature of a contract.’ ” Barnes v. Gorman,
536 U. S. 181, 186 (2002) (quoting Pennhurst State School
and Hospital v. Halderman, 451 U. S. 1, 17 (1981)). The
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legitimacy of Congress’s exercise of the spending power
“thus rests on whether the State voluntarily and knowingly
accepts the terms of the ‘contract.’” Pennhurst, supra,
at 17. Respecting this limitation is critical to ensuring
that Spending Clause legislation does not undermine the
status of the States as independent sovereigns in our fed-
eral system. That system “rests on what might at first
seem a counterintuitive insight, that ‘freedom is enhanced
by the creation of two governments, not one.’ ” Bond, 564
U. S., at ___ (slip op., at 8) (quoting Alden v. Maine, 527
U. S. 706, 758 (1999)). For this reason, “the Constitution
has never been understood to confer upon Congress the
ability to require the States to govern according to Con-
gress’ instructions.” New York, supra, at 162. Otherwise
the two-government system established by the Framers
would give way to a system that vests power in one central
government, and individual liberty would suffer.
That insight has led this Court to strike down fed-
eral legislation that commandeers a State’s legislative or
administrative apparatus for federal purposes. See, e.g.,
Printz, 521 U. S., at 933 (striking down federal legisla-
tion compelling state law enforcement officers to perform
federally mandated background checks on handgun pur-
chasers); New York, supra, at 174–175 (invalidating provi-
sions of an Act that would compel a State to either take
title to nuclear waste or enact particular state waste
regulations). It has also led us to scrutinize Spending
Clause legislation to ensure that Congress is not using
financial inducements to exert a “power akin to undue
influence.” Steward Machine Co. v. Davis, 301 U. S. 548,
590 (1937). Congress may use its spending power to cre-
ate incentives for States to act in accordance with federal
policies. But when “pressure turns into compulsion,” ibid.,
the legislation runs contrary to our system of federalism.
“[T]he Constitution simply does not give Congress the
authority to require the States to regulate.” New York,
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505 U. S., at 178. That is true whether Congress directly
commands a State to regulate or indirectly coerces a State
to adopt a federal regulatory system as its own.
Permitting the Federal Government to force the States
to implement a federal program would threaten the politi-
cal accountability key to our federal system. “[W]here the
Federal Government directs the States to regulate, it may
be state officials who will bear the brunt of public disap-
proval, while the federal officials who devised the regu-
latory program may remain insulated from the electoral
ramifications of their decision.” Id., at 169. Spending
Clause programs do not pose this danger when a State has
a legitimate choice whether to accept the federal condi-
tions in exchange for federal funds. In such a situation,
state officials can fairly be held politically accountable for
choosing to accept or refuse the federal offer. But when
the State has no choice, the Federal Government can
achieve its objectives without accountability, just as in
New York and Printz. Indeed, this danger is heightened
when Congress acts under the Spending Clause, because
Congress can use that power to implement federal policy it
could not impose directly under its enumerated powers.
We addressed such concerns in Steward Machine. That
case involved a federal tax on employers that was abated
if the businesses paid into a state unemployment plan that
met certain federally specified conditions. An employer
sued, alleging that the tax was impermissibly “driv[ing]
the state legislatures under the whip of economic pressure
into the enactment of unemployment compensation laws
at the bidding of the central government.” 301 U. S., at
587. We acknowledged the danger that the Federal Gov-
ernment might employ its taxing power to exert a “power
akin to undue influence” upon the States. Id., at 590. But
we observed that Congress adopted the challenged tax and
abatement program to channel money to the States that
would otherwise have gone into the Federal Treasury for
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use in providing national unemployment services. Con-
gress was willing to direct businesses to instead pay the
money into state programs only on the condition that the
money be used for the same purposes. Predicating tax
abatement on a State’s adoption of a particular type of un-
employment legislation was therefore a means to “safe-
guard [the Federal Government’s] own treasury.” Id., at
591. We held that “[i]n such circumstances, if in no oth-
ers, inducement or persuasion does not go beyond the
bounds of power.” Ibid.
In rejecting the argument that the federal law was a
“weapon[ ] of coercion, destroying or impairing the auton-
omy of the states,” the Court noted that there was no
reason to suppose that the State in that case acted other
than through “her unfettered will.” Id., at 586, 590.
Indeed, the State itself did “not offer a suggestion that in
passing the unemployment law she was affected by du-
ress.” Id., at 589.
As our decision in Steward Machine confirms, Congress
may attach appropriate conditions to federal taxing and
spending programs to preserve its control over the use of
federal funds. In the typical case we look to the States to
defend their prerogatives by adopting “the simple expedi-
ent of not yielding” to federal blandishments when they
do not want to embrace the federal policies as their own.
Massachusetts v. Mellon, 262 U. S. 447, 482 (1923). The
States are separate and independent sovereigns. Some-
times they have to act like it.
The States, however, argue that the Medicaid expansion
is far from the typical case. They object that Congress has
“crossed the line distinguishing encouragement from
coercion,” New York, supra, at 175, in the way it has struc-
tured the funding: Instead of simply refusing to grant the
new funds to States that will not accept the new condi-
tions, Congress has also threatened to withhold those
States’ existing Medicaid funds. The States claim that
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this threat serves no purpose other than to force unwilling
States to sign up for the dramatic expansion in health care
coverage effected by the Act.
Given the nature of the threat and the programs at
issue here, we must agree. We have upheld Congress’s
authority to condition the receipt of funds on the States’
complying with restrictions on the use of those funds,
because that is the means by which Congress ensures that
the funds are spent according to its view of the “general
Welfare.” Conditions that do not here govern the use
of the funds, however, cannot be justified on that ba-
sis. When, for example, such conditions take the form of
threats to terminate other significant independent grants,
the conditions are properly viewed as a means of pressur-
ing the States to accept policy changes.
In
South Dakota v. Dole, we considered a challenge to a
federal law that threatened to withhold five percent of a
State’s federal highway funds if the State did not raise its
drinking age to 21. The Court found that the condition
was “directly related to one of the main purposes for which
highway funds are expended—safe interstate travel.” 483
U. S., at 208. At the same time, the condition was not a
restriction on how the highway funds—set aside for spec-
ific highway improvement and maintenance efforts—were
to be used.
We accordingly asked whether “the financial induce-
ment offered by Congress” was “so coercive as to pass the
point at which ‘pressure turns into compulsion.’” Id., at
211 (quoting Steward Machine, supra, at 590). By “finan-
cial inducement” the Court meant the threat of losing five
percent of highway funds; no new money was offered to
the States to raise their drinking ages. We found that the
inducement was not impermissibly coercive, because
Congress was offering only “relatively mild encouragement
to the States.” Dole, 483 U. S., at 211. We observed that
“all South Dakota would lose if she adheres to her chosen
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course as to a suitable minimum drinking age is 5%” of
her highway funds. Ibid. In fact, the federal funds at
stake constituted less than half of one percent of South
Dakota’s budget at the time. See Nat. Assn. of State
Budget Officers, The State Expenditure Report 59 (1987);
South Dakota v. Dole, 791 F. 2d 628, 630 (CA8 1986). In
consequence, “we conclude[d] that [the] encouragement
to state action [was] a valid use of the spending power.”
Dole, 483 U. S., at 212. Whether to accept the drinking
age change “remain[ed] the prerogative of the States not
merely in theory but in fact.” Id., at 211–212.
In this case, the financial “inducement” Congress has
chosen is much more than “relatively mild encourage-
ment”—it is a gun to the head. Section 1396c of the Medi-
caid Act provides that if a State’s Medicaid plan does
not comply with the Act’s requirements, the Secretary of
Health and Human Services may declare that “further
payments will not be made to the State.” 42 U. S. C.
§1396c. A State that opts out of the Affordable Care Act’s
expansion in health care coverage thus stands to lose not
merely “a relatively small percentage” of its existing Medi-
caid funding, but all of it. Dole, supra, at 211. Medicaid
spending accounts for over 20 percent of the average
State’s total budget, with federal funds covering 50 to 83
percent of those costs. See Nat. Assn. of State Budget
Officers, Fiscal Year 2010 State Expenditure Report, p. 11,
Table 5 (2011); 42 U. S. C. §1396d(b). The Federal Gov-
ernment estimates that it will pay out approximately $3.3
trillion between 2010 and 2019 in order to cover the costs
of pre-expansion Medicaid. Brief for United States 10,
n. 6. In addition, the States have developed intricate
statutory and administrative regimes over the course of
many decades to implement their objectives under existing
Medicaid. It is easy to see how the Dole Court could con-
clude that the threatened loss of less than half of one
percent of South Dakota’s budget left that State with a
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“prerogative” to reject Congress’s desired policy, “not
merely in theory but in fact.” 483 U. S., at 211–212. The
threatened loss of over 10 percent of a State’s overall
budget, in contrast, is economic dragooning that leaves the
States with no real option but to acquiesce in the Medicaid
expansion.12
JUSTICE GINSBURG claims that Dole is distinguishable
because here “Congress has not threatened to withhold
funds earmarked for any other program.” Post, at 47. But
that begs the question: The States contend that the ex-
pansion is in reality a new program and that Congress is
forcing them to accept it by threatening the funds for the
existing Medicaid program. We cannot agree that existing
Medicaid and the expansion dictated by the Affordable
Care Act are all one program simply because “Congress
styled” them as such. Post, at 49. If the expansion is not
properly viewed as a modification of the existing Medicaid
program, Congress’s decision to so title it is irrelevant.13 \\
——————
12
JUSTICE GINSBURG observes that state Medicaid spending will in-
crease by only 0.8 percent after the expansion. Post, at 43. That not
only ignores increased state administrative expenses, but also assumes
that the Federal Government will continue to fund the expansion at the
current statutorily specified levels. It is not unheard of, however, for
the Federal Government to increase requirements in such a manner as
to impose unfunded mandates on the States. More importantly, the
size of the new financial burden imposed on a State is irrelevant in
analyzing whether the State has been coerced into accepting that
burden. “Your money or your life” is a coercive proposition, whether
you have a single dollar in your pocket or $500.
13
Nor, of course, can the number of pages the amendment occu-
pies, or the extent to which the change preserves and works within
the existing program, be dispositive. Cf. post, at 49–50 (opinion of
GINSBURG, J.). Take, for example, the following hypothetical amend-
ment: “All of a State’s citizens are now eligible for Medicaid.” That
change would take up a single line and would not alter any “operational
aspect[ ] of the program” beyond the eligibility requirements. Post, at
49. Yet it could hardly be argued that such an amendment was a
permissible modification of Medicaid, rather than an attempt to foist an
entirely new health care system upon the States.
53
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Opinion of ROBERTS, C. J.
Here, the Government claims that the Medicaid expan-
sion is properly viewed merely as a modification of the ex-
isting program because the States agreed that Congress
could change the terms of Medicaid when they signed on
in the first place. The Government observes that the
Social Security Act, which includes the original Medicaid
provisions, contains a clause expressly reserving “[t]he
right to alter, amend, or repeal any provision” of that
statute. 42 U. S. C. §1304. So it does. But “if Congress
intends to impose a condition on the grant of federal mon-
eys, it must do so unambiguously.” Pennhurst, 451 U. S.,
at 17. A State confronted with statutory language reserv-
ing the right to “alter” or “amend” the pertinent provisions
of the Social Security Act might reasonably assume that
Congress was entitled to make adjustments to the Medi-
caid program as it developed. Congress has in fact done
so, sometimes conditioning only the new funding, other
times both old and new. See, e.g., Social Security Amend-
ments of 1972, 86 Stat. 1381–1382, 1465 (extending Med-
icaid eligibility, but partly conditioning only the new
funding); Omnibus Budget Reconciliation Act of 1990,
§4601, 104 Stat. 1388–166 (extending eligibility, and
conditioning old and new funds).
The Medicaid expansion, however, accomplishes a shift
in kind, not merely degree. The original program was de-
signed to cover medical services for four particular cat-
egories of the needy: the disabled, the blind, the elderly,
and needy families with dependent children. See 42
U. S. C. §1396a(a)(10). Previous amendments to Medicaid
eligibility merely altered and expanded the boundaries of
these categories. Under the Affordable Care Act, Medicaid
is transformed into a program to meet the health care
needs of the entire nonelderly population with income
below 133 percent of the poverty level. It is no longer a
program to care for the neediest among us, but rather an
element of a comprehensive national plan to provide uni-
54
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Opinion of ROBERTS, C. J.
versal health insurance coverage.14
Indeed, the manner in which the expansion is struc-
tured indicates that while Congress may have styled the
expansion a mere alteration of existing Medicaid, it recog-
nized it was enlisting the States in a new health care
program. Congress created a separate funding provision
to cover the costs of providing services to any person
made newly eligible by the expansion. While Congress pays
50 to 83 percent of the costs of covering individuals cur-
rently enrolled in Medicaid, §1396d(b), once the expansion is
fully implemented Congress will pay 90 percent of the
costs for newly eligible persons, §1396d(y)(1). The condi-
tions on use of the different funds are also distinct. Con-
gress mandated that newly eligible persons receive a level
of coverage that is less comprehensive than the traditional
Medicaid benefit package. §1396a(k)(1); see Brief for
United States 9.
As we have explained, “[t]hough Congress’ power to
legislate under the spending power is broad, it does not
include surprising participating States with postac-
ceptance or ‘retroactive’ conditions.” Pennhurst, supra, at
25. A State could hardly anticipate that Congress’s reser-
vation of the right to “alter” or “amend” the Medicaid
program included the power to transform it so dramatically.
JUSTICE GINSBURG claims that in fact this expansion is
——————
14
JUSTICE GINSBURG suggests that the States can have no objection to
the Medicaid expansion, because “Congress could have repealed Medi-
caid [and,] [t]hereafter, . . . could have enacted Medicaid II, a new
program combining the pre-2010 coverage with the expanded coverage
required by the ACA.” Post, at 51; see also post, at 38. But it would
certainly not be that easy. Practical constraints would plainly inhibit,
if not preclude, the Federal Government from repealing the existing
program and putting every feature of Medicaid on the table for political
reconsideration. Such a massive undertaking would hardly be “ritual-
istic.” Ibid. The same is true of JUSTICE GINSBURG’s suggestion that
Congress could establish Medicaid as an exclusively federal program.
Post, at 44.
55
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Opinion of ROBERTS, C. J.
no different from the previous changes to Medicaid, such
that “a State would be hard put to complain that it lacked
fair notice.” Post, at 56. But the prior change she dis-
cusses—presumably the most dramatic alteration she could
find—does not come close to working the transformation
the expansion accomplishes. She highlights an amend-
ment requiring States to cover pregnant women and in-
creasing the number of eligible children. Ibid. But this
modification can hardly be described as a major change in
a program that—from its inception—provided health care
for “families with dependent children.” Previous Medicaid
amendments simply do not fall into the same category as
the one at stake here.
The Court in Steward Machine did not attempt to “fix
the outermost line” where persuasion gives way to coer-
cion. 301 U. S., at 591. The Court found it “[e]nough for
present purposes that wherever the line may be, this
statute is within it.” Ibid. We have no need to fix a line
either. It is enough for today that wherever that line may
be, this statute is surely beyond it. Congress may not
simply “conscript state [agencies] into the national bu-
reaucratic army,” FERC v. Mississippi, 456 U. S. 742, 775
(1982) (O’Connor, J., concurring in judgment in part and
dissenting in part), and that is what it is attempting to do
with the Medicaid expansion.
B
Nothing in our opinion precludes Congress from offering
funds under the Affordable Care Act to expand the availa-
bility 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. Section 1396c gives the
Secretary of Health and Human Services the authority to
56
NATIONAL FEDERATION OF INDEPENDENT
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v. SEBELIUS
Opinion of ROBERTS, C. J.
do just that. It allows her to withhold all “further [Medi-
caid] payments . . . to the State” if she determines that the
State is out of compliance with any Medicaid requirement,
including those contained in the expansion. 42 U. S. C.
§1396c. In light of the Court’s holding, the Secretary
cannot apply §1396c to withdraw existing Medicaid funds
for failure to comply with the requirements set out in the
expansion.
That fully remedies the constitutional violation we have
identified. The chapter of the United States Code that
contains §1396c includes a severability clause confirming
that we need go no further. That clause specifies that “[i]f
any provision of this chapter, or the application thereof to
any person or circumstance, is held invalid, the remainder
of the chapter, and the application of such provision to
other persons or circumstances shall not be affected thereby.”
§1303. Today’s holding does not affect the continued ap-
plication of §1396c to the existing Medicaid program. Nor
does it affect the Secretary’s ability to withdraw funds pro-
vided under the Affordable Care Act if a State that has
chosen to participate in the expansion fails to comply with
the requirements of that Act.
This is not to say, as the joint dissent suggests, that we
are “rewriting the Medicaid Expansion.” Post, at 48.
Instead, we determine, first, that §1396c is unconstitu-
tional when applied to withdraw existing Medicaid funds
from States that decline to comply with the expansion.
We then follow Congress’s explicit textual instruction to
leave unaffected “the remainder of the chapter, and the
application of [the challenged] provision to other persons
or circumstances.” §1303. When we invalidate an applica-
tion of a statute because that application is unconstitu-
tional, we are not “rewriting” the statute; we are merely
enforcing the Constitution.
The question remains whether today’s holding affects
other provisions of the Affordable Care Act. In considering
57
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Opinion of ROBERTS, C. J.
that question, “[w]e seek to determine what Congress
would have intended in light of the Court’s constitutional
holding.” United States v. Booker, 543 U. S. 220, 246
(2005) (internal quotation marks omitted). Our “touch-
stone for any decision about remedy is legislative intent,
for a court cannot use its remedial powers to circum-
vent the intent of the legislature.” Ayotte v. Planned
Parenthood of Northern New Eng., 546 U. S. 320, 330
(2006) (internal quotation marks omitted). The question
here is whether 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 new Medicaid
expansion. Unless it is “evident” that the answer is no, we
must leave the rest of the Act intact. Champlin Refining
Co. v. Corporation Comm’n of Okla., 286 U. S. 210, 234
(1932).
We are confident that Congress would have wanted to
preserve the rest of the Act. It is fair to say that Congress
assumed that every State would participate in the Medi-
caid expansion, given that States had no real choice but to
do so. The States contend that Congress enacted the rest
of the Act with such full participation in mind; they point
out that Congress made Medicaid a means for satisfying
the mandate, 26 U. S. C. §5000A(f)(1)(A)(ii), and enacted
no other plan for providing coverage to many low-income
individuals. According to the States, this means that the
entire Act must fall.
We disagree. The Court today limits the financial pres-
sure the Secretary may apply to induce States to accept
the terms of the Medicaid expansion. As a practical mat-
ter, that means States may now choose to reject the ex-
pansion; that is the whole point. But that does not mean
all or even any will. Some States may indeed decline to
participate, either because they are unsure they will be
able to afford their share of the new funding obligations,
or because they are unwilling to commit the administra-
58
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v. SEBELIUS
Opinion of ROBERTS, C. J.
tive resources necessary to support the expansion. Other
States, however, may voluntarily sign up, finding the idea
of expanding Medicaid coverage attractive, particularly
given the level of federal funding the Act offers at the
outset.
We have no way of knowing how many States will ac-
cept the terms of the expansion, but we do not believe
Congress would have wanted the whole Act to fall, simply
because some may choose not to participate. The other
reforms Congress enacted, after all, will remain “fully
operative as a law,” Champlin, supra, at 234, and will still
function in a way “consistent with Congress’ basic objec-
tives in enacting the statute,” Booker, supra, at 259.
Confident that Congress would not have intended any-
thing different, we conclude that the rest of the Act need
not fall in light of our constitutional holding.
* * *
The Affordable Care Act is constitutional in part and
unconstitutional in part. The individual mandate cannot
be upheld as an exercise of Congress’s power under the
Commerce Clause. That Clause authorizes Congress to
regulate interstate commerce, not to order individuals to
engage in it. In this case, however, it is reasonable to con-
strue what Congress has done as increasing taxes on those
who have a certain amount of income, but choose to go
without health insurance. Such legislation is within Con-
gress’s power to tax.
As for the Medicaid expansion, that portion of the Af-
fordable Care Act violates the Constitution by threatening
existing Medicaid funding. Congress has no authority to
order the States to regulate according to its instructions.
Congress may offer the States grants and require the
States to comply with accompanying conditions, but the
States must have a genuine choice whether to accept the
offer. The States are given no such choice in this case:
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Opinion of ROBERTS, C. J.
They must either accept a basic change in the nature of
Medicaid, or risk losing all Medicaid funding. The remedy
for that constitutional violation is to preclude the Federal
Government from imposing such a sanction. That remedy
does not require striking down other portions of the Af-
fordable Care Act.
The Framers created a Federal Government of limited
powers, and assigned to this Court the duty of enforcing
those limits. The Court does so today. But the Court does
not express any opinion on the wisdom of the Affordable
Care Act. Under the Constitution, that judgment is re-
served to the people.
The judgment of the Court of Appeals for the Eleventh
Circuit is affirmed in part and reversed in part.
It is so ordered.
_________________
_________________
1
Cite as: 567 U. S. ____ (2012)
Opinion of GINSBURG, J.
SUPREME COURT OF THE UNITED STATES
Nos. 11–393, 11–398 and 11–400
NATIONAL FEDERATION OF INDEPENDENT
BUSINESS, ET AL., PETITIONERS
11–393
v.
KATHLEEN SEBELIUS, SECRETARY OF HEALTH
AND HUMAN SERVICES, ET AL.
DEPARTMENT OF HEALTH AND HUMAN
SERVICES, ET AL., PETITIONERS
11–398
v.
FLORIDA ET AL.
11–400
FLORIDA, ET AL., PETITIONERS
v.
DEPARTMENT OF HEALTH AND
HUMAN SERVICES ET AL.
ON WRITS OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE ELEVENTH CIRCUIT
[June 28, 2012]
JUSTICE GINSBURG, with whom JUSTICE SOTOMAYOR
joins, and with whom JUSTICE BREYER and JUSTICE
KAGAN join as to Parts I, II, III, and IV, concurring in
part, concurring in the judgment in part, and dissenting in
part.
I agree with THE CHIEF JUSTICE that the Anti-Injunction
Act does not bar the Court’s consideration of this case,
and that the minimum coverage provision is a proper
exercise of Congress’ taxing power. I therefore join Parts
I, II, and III–C of THE CHIEF JUSTICE’s opinion.
Unlike THE CHIEF JUSTICE, however, I would hold, alterna
2
NATIONAL FEDERATION OF INDEPENDENT
BUSINESS
v. SEBELIUS
Opinion of GINSBURG, J.
tively, that the Commerce Clause authorizes Congress to
enact the minimum coverage provision. I would also hold
that the Spending Clause permits the Medicaid expansion
exactly as Congress enacted it.
I
The provision of health care is today a concern of na
tional dimension, just as the provision of old-age and
survivors’ benefits was in the 1930’s. In the Social Secu-
rity Act, Congress installed a federal system to provide
monthly benefits to retired wage earners and, eventually,
to their survivors. Beyond question, Congress could have
adopted a similar scheme for health care. Congress chose,
instead, to preserve a central role for private insurers and
state governments. According to THE CHIEF JUSTICE, the
Commerce Clause does not permit that preservation. This
rigid reading of the Clause makes scant sense and is
stunningly retrogressive.
Since 1937, our precedent has recognized Congress’
large authority to set the Nation’s course in the economic
and social welfare realm. See United States v. Darby, 312
U. S. 100, 115 (1941) (overruling Hammer v. Dagenhart,
247 U. S. 251 (1918), and recognizing that “regulations of
commerce which do not infringe some constitutional prohibi-
tion are within the plenary power conferred on Congress
by the Commerce Clause”); NLRB v. Jones & Laughlin
Steel Corp., 301 U. S. 1, 37 (1937) (“[The commerce]
power is plenary and may be exerted to protect interstate
commerce no matter what the source of the dangers which
threaten it.” (internal quotation marks omitted)). THE
CHIEF JUSTICE’s crabbed reading of the Commerce Clause
harks back to the era in which the Court routinely thwarted
Congress’ efforts to regulate the national economy in
the interest of those who labor to sustain it. See, e.g.,
Railroad Retirement Bd. v. Alton R. Co., 295 U. S. 330,
362, 368 (1935) (invalidating compulsory retirement and
3
Cite as: 567 U. S. ____ (2012)
Opinion of GINSBURG, J.
pension plan for employees of carriers subject to the Inter
state Commerce Act; Court found law related essentially
“to the social welfare of the worker, and therefore remote
from any regulation of commerce as such”). It is a reading
that should not have staying power.
A
In enacting the Patient Protection and Affordable Care
Act (ACA), Congress comprehensively reformed the
national market for health-care products and services.
By any measure, that market is immense. Collectively,
Americans spent $2.5 trillion on health care in 2009,
accounting for 17.6% of our Nation’s economy. 42 U. S. C.
§18091(2)(B) (2006 ed., Supp. IV). Within the next decade,
it is anticipated, spending on health care will nearly dou
ble. Ibid.
The health-care market’s size is not its only distinctive
feature. Unlike the market for almost any other product
or service, the market for medical care is one in which all
individuals inevitably participate. Virtually every person
residing in the United States, sooner or later, will visit
a doctor or other health-care professional. See Dept. of
Health and Human Services, National Center for Health
Statistics, Summary Health Statistics for U. S. Adults:
National Health Interview Survey 2009, Ser. 10, No. 249,
p. 124, Table 37 (Dec. 2010) (Over 99.5% of adults above
65 have visited a health-care professional.). Most people
will do so repeatedly. See id., at 115, Table 34 (In 2009
alone, 64% of adults made two or more visits to a doctor’s
office.).
When individuals make those visits, they face another
reality of the current market for medical care: its high
cost. In 2010, on average, an individual in the United
States incurred over $7,000 in health-care expenses.
Dept. of Health and Human Services, Centers for Medi
care and Medicaid Services, Historic National Health
4
NATIONAL FEDERATION OF INDEPENDENT
BUSINESS
v. SEBELIUS
Opinion of GINSBURG, J.
Expenditure Data, National Health Expenditures: Se-
lected Calendar Years 1960–2010 (Table 1). Over a life
time, costs mount to hundreds of thousands of dollars. See
Alemayahu & Warner, The Lifetime Distribution of
Health Care Costs, in 39 Health Service Research 627, 635
(June 2004). When a person requires nonroutine care, the
cost will generally exceed what he or she can afford to pay.
A single hospital stay, for instance, typically costs up
wards of $10,000. See Dept. of Health and Human Ser
vices, Office of Health Policy, ASPE Research Brief: The
Value of Health Insurance 5 (May 2011). Treatments for
many serious, though not uncommon, conditions similarly
cost a substantial sum. Brief for Economic Scholars as
Amici Curiae in No. 11–398, p. 10 (citing a study indicat
ing that, in 1998, the cost of treating a heart attack for the
first 90 days exceeded $20,000, while the annual cost of
treating certain cancers was more than $50,000).
Although every U. S. domiciliary will incur significant
medical expenses during his or her lifetime, the time when
care will be needed is often unpredictable. An accident, a
heart attack, or a cancer diagnosis commonly occurs with
out warning. Inescapably, we are all at peril of needing
medical care without a moment’s notice. See, e.g., Camp
bell, Down the Insurance Rabbit Hole, N. Y. Times, Apr. 5,
2012, p. A23 (telling of an uninsured 32-year-old woman
who, healthy one day, became a quadriplegic the next due
to an auto accident).
To manage the risks associated with medical care—
its high cost, its unpredictability, and its inevitability—
most people in the United States obtain health insurance.
Many (approximately 170 million in 2009) are insured by
private insurance companies. Others, including those
over 65 and certain poor and disabled persons, rely on
government-funded insurance programs, notably Medicare
and Medicaid. Combined, private health insurers and
State and Federal Governments finance almost 85% of the
5
Cite as: 567 U. S. ____ (2012)
Opinion of GINSBURG, J.
medical care administered to U. S. residents. See Con
gressional Budget Office, CBO’s 2011 Long-Term Budget
Outlook 37 (June 2011).
Not all U. S. residents, however, have health insurance.
In 2009, approximately 50 million people were uninsured,
either by choice or, more likely, because they could not
afford private insurance and did not qualify for govern
ment aid. See Dept. of Commerce, Census Bureau, C.
DeNavas-Walt, B. Proctor, & J. Smith, Income, Poverty,
and Health Insurance Coverage in the United States: 2009,
p. 23, Table 8 (Sept. 2010). As a group, uninsured individ
uals annually consume more than $100 billion in health-
care services, nearly 5% of the Nation’s total. Hidden
Health Tax: Americans Pay a Premium 2 (2009), avail-
able at http:%%//%%www.familiesusa.org (all Internet mate-
rial as visited June 25, 2012, and included in Clerk of
Court’s case file). Over 60% of those without insurance
visit a doctor’s office or emergency room in a given year.
See Dept. of Health and Human Services, National Cen-
ter for Health Statistics, Health—United States—2010,
p. 282, Table 79 (Feb. 2011).
B
The large number of individuals without health insur
ance, Congress found, heavily burdens the national
health-care market. See 42 U. S. C. §18091(2). As just
noted, the cost of emergency care or treatment for a seri
ous illness generally exceeds what an individual can afford
to pay on her own. Unlike markets for most products,
however, the inability to pay for care does not mean that
an uninsured individual will receive no care. Federal and
state law, as well as professional obligations and embed
ded social norms, require hospitals and physicians to
provide care when it is most needed, regardless of the
patient’s ability to pay. See, e.g., 42 U. S. C. §1395dd; Fla.
Stat. §395.1041(3)(f) (2010); Tex. Health & Safety Code
6
NATIONAL FEDERATION OF INDEPENDENT
BUSINESS
v. SEBELIUS
Opinion of GINSBURG, J.
Ann. §§311.022(a) and (b) (West 2010); American Medical
Association, Council on Ethical and Judicial Affairs,
Code of Medical Ethics, Current Opinions: Opinion 8.11—
Neglect of Patient, p. 70 (1998–1999 ed.).
As a consequence, medical-care providers deliver sig-
nificant amounts of care to the uninsured for which the
providers receive no payment. In 2008, for example, hospi-
tals, physicians, and other health-care professionals
received no compensation for $43 billion worth of the $116
billion in care they administered to those without insur
ance. 42 U. S. C. §18091(2)(F) (2006 ed., Supp. IV).
Health-care providers do not absorb these bad debts.
Instead, they raise their prices, passing along the cost
of uncompensated care to those who do pay reliably: the
government and private insurance companies. In response,
private insurers increase their premiums, shifting the
cost of the elevated bills from providers onto those who
carry insurance. The net result: Those with health insur
ance subsidize the medical care of those without it. As
economists would describe what happens, the uninsured
“free ride” on those who pay for health insurance.
The size of this subsidy is considerable. Congress found
that the cost-shifting just described “increases family
[insurance] premiums by on average over $1,000 a year.”
Ibid. Higher premiums, in turn, render health insurance
less affordable, forcing more people to go without insur
ance and leading to further cost-shifting.
And it is hardly just the currently sick or injured among
the uninsured who prompt elevation of the price of health
care and health insurance. Insurance companies and
health-care providers know that some percentage of
healthy, uninsured people will suffer sickness or injury
each year and will receive medical care despite their ina
bility to pay. In anticipation of this uncompensated care,
health-care companies raise their prices, and insurers
their premiums. In other words, because any uninsured
7
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Opinion of GINSBURG, J.
person may need medical care at any moment and because
health-care companies must account for that risk, every
uninsured person impacts the market price of medical care
and medical insurance.
The failure of individuals to acquire insurance has other
deleterious effects on the health-care market. Because
those without insurance generally lack access to preventa
tive care, they do not receive treatment for conditions—
like hypertension and diabetes—that can be successfully
and affordably treated if diagnosed early on. See Institute
of Medicine, National Academies, Insuring America’s
Health: Principles and Recommendations 43 (2004). When
sickness finally drives the uninsured to seek care, once
treatable conditions have escalated into grave health
problems, requiring more costly and extensive interven
tion. Id., at 43–44. The extra time and resources provid
ers spend serving the uninsured lessens the providers’
ability to care for those who do have insurance. See Kliff,
High Uninsured Rates Can Kill You—Even if You Have
Coverage, Washington Post (May 7, 2012) (describing a
study of California’s health-care market which found
that, when hospitals divert time and resources to provide
uncompensated care, the quality of care the hospitals
deliver to those with insurance drops significantly), availa-
ble at http:%%//%%www.washingtonpost.com/blogs/ezra-klein/post/
high-uninsured-rates-can-kill-you-even-if-you-have-coverage/2012/
05/07/gIQALNHN8T_print.html.
C
States cannot resolve the problem of the uninsured on
their own. Like Social Security benefits, a universal
health-care system, if adopted by an individual State,
would be “bait to the needy and dependent elsewhere,
encouraging them to migrate and seek a haven of repose.”
Helvering v. Davis, 301 U. S. 619, 644 (1937). See also
Brief for Commonwealth of Massachusetts as Amicus
8
NATIONAL FEDERATION OF INDEPENDENT
BUSINESS
v. SEBELIUS
Opinion of GINSBURG, J.
Curiae in No. 11–398, p. 15 (noting that, in 2009, Massa
chusetts’ emergency rooms served thousands of uninsured,
out-of-state residents). An influx of unhealthy individuals
into a State with universal health care would result in
increased spending on medical services. To cover the
increased costs, a State would have to raise taxes, and
private health-insurance companies would have to in
crease premiums. Higher taxes and increased insurance
costs would, in turn, encourage businesses and healthy
individuals to leave the State.
States that undertake health-care reforms on their own
thus risk “placing themselves in a position of economic
disadvantage as compared with neighbors or competitors.”
Davis, 301 U. S., at 644. See also Brief for Health Care for
All, Inc., et al. as Amici Curiae in No. 11–398, p. 4 (“[O]ut
of-state residents continue to seek and receive millions of
dollars in uncompensated care in Massachusetts hospitals,
limiting the State’s efforts to improve its health care
system through the elimination of uncompensated care.”).
Facing that risk, individual States are unlikely to take the
initiative in addressing the problem of the uninsured, even
though solving that problem is in all States’ best interests.
Congress’ intervention was needed to overcome this collective
action impasse.
D
Aware that a national solution was required, Congress
could have taken over the health-insurance market by
establishing a tax-and-spend federal program like Social
Security. Such a program, commonly referred to as a
single-payer system (where the sole payer is the Federal
Government), would have left little, if any, room for pri
vate enterprise or the States. Instead of going this route,
Congress enacted the ACA, a solution that retains a ro
bust role for private insurers and state governments. To
make its chosen approach work, however, Congress had to
9
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Opinion of GINSBURG, J.
use some new tools, including a requirement that most
individuals obtain private health insurance coverage. See
26 U. S. C. §5000A (2006 ed., Supp. IV) (the minimum
coverage provision). As explained below, by employing
these tools, Congress was able to achieve a practical, alto
gether reasonable, solution.
A central aim of the ACA is to reduce the number of
uninsured U. S. residents. See 42 U. S. C. §18091(2)(C)
and (I) (2006 ed., Supp. IV). The minimum coverage
provision advances this objective by giving potential recip
ients of health care a financial incentive to acquire insur
ance. Per the minimum coverage provision, an individual
must either obtain insurance or pay a toll constructed as a
tax penalty. See 26 U. S. C. §5000A.
The minimum coverage provision serves a further pur
pose vital to Congress’ plan to reduce the number of unin
sured. Congress knew that encouraging individuals to
purchase insurance would not suffice to solve the problem,
because most of the uninsured are not uninsured by
choice.1 Of particular concern to Congress were people
who, though desperately in need of insurance, often cannot
acquire it: persons who suffer from preexisting medical
conditions.
Before the ACA’s enactment, private insurance compa
nies took an applicant’s medical history into account when
setting insurance rates or deciding whether to insure an
individual. Because individuals with preexisting med-
——————
1
According to one study conducted by the National Center for Health
Statistics, the high cost of insurance is the most common reason why
individuals lack coverage, followed by loss of one’s job, an employer’s
unwillingness to offer insurance or an insurers’ unwillingness to cover
those with preexisting medical conditions, and loss of Medicaid cover
age. See Dept. of Health and Human Services, National Center for
Health Statistics, Summary Health Statistics for the U. S. Population:
National Health Interview Survey—2009, Ser. 10, No. 248, p. 71, Table
25 (Dec. 2010). “[D]id not want or need coverage” received too few re-
sponses to warrant its own category. See ibid., n. 2.
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ical conditions cost insurance companies significantly more
than those without such conditions, insurers routinely re-
fused to insure these individuals, charged them substan
tially higher premiums, or offered only limited coverage
that did not include the preexisting illness. See Dept. of
Health and Human Services, Coverage Denied: How the
Current Health Insurance System Leaves Millions Behind
1 (2009) (Over the past three years, 12.6 million non
elderly adults were denied insurance coverage or charged
higher premiums due to a preexisting condition.).
To ensure that individuals with medical histories have
access to affordable insurance, Congress devised a three
part solution. First, Congress imposed a “guaranteed is
sue” requirement, which bars insurers from denying
coverage to any person on account of that person’s medical
condition or history. See 42 U. S. C. §§300gg–1, 300gg–3,
300gg–4(a) (2006 ed., Supp. IV). Second, Congress required
insurers to use “community rating” to price their insurance
policies. See §300gg. Community rating, in effect, bars
insurance companies from charging higher premiums
to those with preexisting conditions.
But these two provisions, Congress comprehended, could
not work effectively unless individuals were given a pow
erful incentive to obtain insurance. See Hearings before
the House Ways and Means Committee, 111th Cong., 1st
Sess., 10, 13 (2009) (statement of Uwe Reinhardt) (“[I]m-
position of community-rated premiums and guaranteed
issue on a market of competing private health insurers
will inexorably drive that market into extinction, unless
these two features are coupled with . . . a mandate on
individual[s] to be insured.” (emphasis in original)).
In the 1990’s, several States—including New York, New
Jersey, Washington, Kentucky, Maine, New Hampshire,
and Vermont—enacted guaranteed-issue and community
rating laws without requiring universal acquisition of
insurance coverage. The results were disastrous. “All
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seven states suffered from skyrocketing insurance pre
mium costs, reductions in individuals with coverage, and
reductions in insurance products and providers.” Brief for
American Association of People with Disabilities et al. as
Amici Curiae in No. 11–398, p. 9 (hereinafter AAPD Brief).
See also Brief for Governor of Washington Christine
Gregoire as Amicus Curiae in No. 11–398, pp. 11–14 (de
scribing the “death spiral” in the insurance market Wash
ington experienced when the State passed a law requiring
coverage for preexisting conditions).
Congress comprehended that guaranteed-issue and
community-rating laws alone will not work. When insur
ance companies are required to insure the sick at afforda
ble prices, individuals can wait until they become ill to buy
insurance. Pretty soon, those in need of immediate medi
cal care—i.e., those who cost insurers the most—become
the insurance companies’ main customers. This “adverse
selection” problem leaves insurers with two choices: They
can either raise premiums dramatically to cover their
ever-increasing costs or they can exit the market. In the
seven States that tried guaranteed-issue and community
rating requirements without a minimum coverage provi
sion, that is precisely what insurance companies did. See,
e.g., AAPD Brief 10 (“[In Maine,] [m]any insurance provid
ers doubled their premiums in just three years or less.”);
id., at 12 (“Like New York, Vermont saw substantial
increases in premiums after its . . . insurance reform
measures took effect in 1993.”); Hall, An Evaluation of
New York’s Reform Law, 25 J. Health Pol. Pol’y & L. 71,
91–92 (2000) (Guaranteed-issue and community-rating
laws resulted in a “dramatic exodus of indemnity insurers
from New York’s individual [insurance] market.”); Brief
for Barry Friedman et al. as Amici Curiae in No. 11–398,
p. 17 (“In Kentucky, all but two insurers (one State-run)
abandoned the State.”).
Massachusetts, Congress was told, cracked the adverse
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selection problem. By requiring most residents to obtain
insurance, see Mass. Gen. Laws, ch. 111M, §2 (West 2011),
the Commonwealth ensured that insurers would not be
left with only the sick as customers. As a result, federal
lawmakers observed, Massachusetts succeeded where
other States had failed. See Brief for Commonwealth of
Massachusetts as Amicus Curiae in No. 11–398, p. 3 (not
ing that the Commonwealth’s reforms reduced the number
of uninsured residents to less than 2%, the lowest rate in
the Nation, and cut the amount of uncompensated care
by a third); 42 U. S. C. §18091(2)(D) (2006 ed., Supp. IV)
(noting the success of Massachusetts’ reforms).2 In cou
pling the minimum coverage provision with guaranteed
issue and community-rating prescriptions, Congress
followed Massachusetts’ lead.
* * *
In sum, Congress passed the minimum coverage provi
sion as a key component of the ACA to address an econom
ic and social problem that has plagued the Nation for
decades: the large number of U. S. residents who are
unable or unwilling to obtain health insurance. Whatever
one thinks of the policy decision Congress made, it was
Congress’ prerogative to make it. Reviewed with appro
priate deference, the minimum coverage provision, allied
to the guaranteed-issue and community-rating prescrip
tions, should survive measurement under the Commerce
and Necessary and Proper Clauses.
II
A
The Commerce Clause, it is widely acknowledged, “was
the Framers’ response to the central problem that gave
——————
2
Despite its success, Massachusetts’ medical-care providers still ad
minister substantial amounts of uncompensated care, much of that to
uninsured patients from out-of-state. See supra, at 7–8.
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rise to the Constitution itself.” EEOC v. Wyoming, 460
U. S. 226, 244, 245, n. 1 (1983) (Stevens, J., concurring)
(citing sources). Under the Articles of Confederation, the
Constitution’s precursor, the regulation of commerce was
left to the States. This scheme proved unworkable, be
cause the individual States, understandably focused on
their own economic interests, often failed to take actions
critical to the success of the Nation as a whole. See Vices
of the Political System of the United States, in James
Madison: Writings 69, 71, ¶5 (J. Rakove ed. 1999) (As a
result of the “want of concert in matters where common
interest requires it,” the “national dignity, interest, and reve-
nue [have] suffered.”).3
What was needed was a “national Government . . .
armed with a positive & compleat authority in all cases
where uniform measures are necessary.” See Letter from
James Madison to Edmund Randolph (Apr. 8, 1787), in 9
Papers of James Madison 368, 370 (R. Rutland ed. 1975).
See also Letter from George Washington to James Madi
son (Nov. 30, 1785), in 8 id., at 428, 429 (“We are either a
United people, or we are not. If the former, let us, in all
matters of general concern act as a nation, which ha[s]
national objects to promote, and a national character
to support.”). The Framers’ solution was the Commerce
Clause, which, as they perceived it, granted Congress the
authority to enact economic legislation “in all Cases for
the general Interests of the Union, and also in those Cases
to which the States are separately incompetent.” 2 Rec
ords of the Federal Convention of 1787, pp. 131–132, ¶8
——————
3
Alexander Hamilton described the problem this way: “[Often] it
would be beneficial to all the states to encourage, or suppress[,] a
particular branch of trade, while it would be detrimental . . . to attempt
it without the concurrence of the rest.” The Continentalist No. V, in 3
Papers of Alexander Hamilton 75, 78 (H. Syrett ed. 1962). Because the
concurrence of all States was exceedingly difficult to obtain, Hamilton
observed, “the experiment would probably be left untried.” Ibid.
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(M. Farrand rev. 1966). See also North American Co. v.
SEC, 327 U. S. 686, 705 (1946) (“[The commerce power]
is an affirmative power commensurate with the national
needs.”).
The Framers understood that the “general Interests of
the Union” would change over time, in ways they could not
anticipate. Accordingly, they recognized that the Consti
tution was of necessity a “great outlin[e],” not a detailed
blueprint, see McCulloch v. Maryland, 4 Wheat. 316, 407
(1819), and that its provisions included broad concepts, to
be “explained by the context or by the facts of the case,”
Letter from James Madison to N. P. Trist (Dec. 1831), in 9
Writings of James Madison 471, 475 (G. Hunt ed. 1910).
“Nothing . . . can be more fallacious,” Alexander Hamilton
emphasized, “than to infer the extent of any power, proper
to be lodged in the national government, from . . . its
immediate necessities. There ought to be a CAPACITY to
provide for future contingencies[,] as they may happen;
and as these are illimitable in their nature, it is impossible
safely to limit that capacity.” The Federalist No. 34,
pp. 205, 206 (John Harvard Library ed. 2009). See also
McCulloch, 4 Wheat., at 415 (The Necessary and Proper
Clause is lodged “in a constitution[,] intended to endure
for ages to come, and consequently, to be adapted to the
various crises of human affairs.”).
B
Consistent with the Framers’ intent, we have repeatedly
emphasized that Congress’ authority under the Commerce
Clause is dependent upon “practical” considerations,
including “actual experience.” Jones & Laughlin Steel
Corp., 301 U. S., at 41–42; see Wickard v. Filburn, 317
U. S. 111, 122 (1942); United States v. Lopez, 514 U. S.
549, 573 (1995) (KENNEDY, J., concurring) (emphasizing
“the Court’s definitive commitment to the practical con
ception of the commerce power”). See also North American
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Co., 327 U. S., at 705 (“Commerce itself is an intensely
practical matter. To deal with it effectively, Congress
must be able to act in terms of economic and financial
realities.” (citation omitted)). We afford Congress the
leeway “to undertake to solve national problems directly
and realistically.” American Power & Light Co. v. SEC,
329 U. S. 90, 103 (1946).
Until today, this Court’s pragmatic approach to judging
whether Congress validly exercised its commerce power
was guided by two familiar principles. First, Congress has
the power to regulate economic activities “that substan
tially affect interstate commerce.” Gonzales v. Raich, 545
U. S. 1, 17 (2005). This capacious power extends even to
local activities that, viewed in the aggregate, have a sub
stantial impact on interstate commerce. See ibid. See
also Wickard, 317 U. S., at 125 (“[E]ven if appellee’s activ-
ity be local and though it may not be regarded as com
merce, it may still, whatever its nature, be reached by
Congress if it exerts a substantial economic effect on
interstate commerce.” (emphasis added)); Jones & Laugh-
lin Steel Corp., 301 U. S., at 37.
Second, we owe a large measure of respect to Congress
when it frames and enacts economic and social legislation.
See Raich, 545 U. S., at 17. See also Pension Benefit
Guaranty Corporation v. R. A. Gray & Co., 467 U. S. 717,
729 (1984) (“[S]trong deference [is] accorded legislation in
the field of national economic policy.”); Hodel v. Indiana,
452 U. S. 314, 326 (1981) (“This [C]ourt will certainly not
substitute its judgment for that of Congress unless the
relation of the subject to interstate commerce and its ef
fect upon it are clearly non-existent.” (internal quotation
marks omitted)). When appraising such legislation, we
ask only (1) whether Congress had a “rational basis” for
concluding that the regulated activity substantially affects
interstate commerce, and (2) whether there is a “reasona
ble connection between the regulatory means selected and
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the asserted ends.” Id., at 323–324. See also Raich, 545
U. S., at 22; Lopez, 514 U. S., at 557; Hodel v. Virginia
Surface Mining & Reclamation Assn., Inc., 452 U. S. 264,
277 (1981); Katzenbach v. McClung, 379 U. S. 294, 303
(1964); Heart of Atlanta Motel, Inc. v. United States, 379
U. S. 241, 258 (1964); United States v. Carolene Products
Co., 304 U. S. 144, 152–153 (1938). In answering these
questions, we presume the statute under review is consti
tutional and may strike it down only on a “plain showing”
that Congress acted irrationally. United States v. Morri-
son, 529 U. S. 598, 607 (2000).
C
Straightforward application of these principles would
require the Court to hold that the minimum coverage
provision is proper Commerce Clause legislation. Beyond
dispute, Congress had a rational basis for concluding that
the uninsured, as a class, substantially affect interstate
commerce. Those without insurance consume billions of
dollars of health-care products and services each year. See
supra, at 5. Those goods are produced, sold, and delivered
largely by national and regional companies who routinely
transact business across state lines. The uninsured also
cross state lines to receive care. Some have medical emer
gencies while away from home. Others, when sick, go to a
neighboring State that provides better care for those who
have not prepaid for care. See supra, at 7–8.
Not only do those without insurance consume a large
amount of health care each year; critically, as earlier
explained, their inability to pay for a significant portion of
that consumption drives up market prices, foists costs on
other consumers, and reduces market efficiency and sta
bility. See supra, at 5–7. Given these far-reaching effects
on interstate commerce, the decision to forgo insurance is
hardly inconsequential or equivalent to “doing nothing,”
ante, at 20; it is, instead, an economic decision Congress
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has the authority to address under the Commerce Clause.
See supra, at 14–16. See also Wickard, 317 U. S., at 128
(“It is well established by decisions of this Court that
the power to regulate commerce includes the power to regu
late the prices at which commodities in that commerce are
dealt in and practices affecting such prices.” (emphasis
added)).
The minimum coverage provision, furthermore, bears a
“reasonable connection” to Congress’ goal of protecting the
health-care market from the disruption caused by individ
uals who fail to obtain insurance. By requiring those who
do not carry insurance to pay a toll, the minimum cover
age provision gives individuals a strong incentive to in
sure. This incentive, Congress had good reason to believe,
would reduce the number of uninsured and, correspond
ingly, mitigate the adverse impact the uninsured have on
the national health-care market.
Congress also acted reasonably in requiring uninsured
individuals, whether sick or healthy, either to obtain
insurance or to pay the specified penalty. As earlier ob
served, because every person is at risk of needing care at
any moment, all those who lack insurance, regardless of
their current health status, adversely affect the price of
health care and health insurance. See supra, at 6–7.
Moreover, an insurance-purchase requirement limited to
those in need of immediate care simply could not work.
Insurance companies would either charge these individu
als prohibitively expensive premiums, or, if community
rating regulations were in place, close up shop. See supra,
at 9–11. See also Brief for State of Maryland and 10
Other States et al. as Amici Curiae in No. 11–398, p. 28
(hereinafter Maryland Brief) (“No insurance regime can
survive if people can opt out when the risk insured against
is only a risk, but opt in when the risk materializes.”).
“[W]here we find that the legislators . . . have a rational
basis for finding a chosen regulatory scheme necessary to
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the protection of commerce, our investigation is at an end.”
Katzenbach, 379 U. S., at 303–304. Congress’ enactment
of the minimum coverage provision, which addresses a
specific interstate problem in a practical, experience
informed manner, easily meets this criterion.
D
Rather than evaluating the constitutionality of the
minimum coverage provision in the manner established by
our precedents, THE CHIEF JUSTICE relies on a newly
minted constitutional doctrine. The commerce power does
not, THE CHIEF JUSTICE announces, permit Congress
to “compe[l] individuals to become active in commerce
by purchasing a product.” Ante, at 20 (emphasis deleted).
1
a
THE CHIEF JUSTICE’s novel constraint on Congress’
commerce power gains no force from our precedent and for
that reason alone warrants disapprobation. See infra, at
23–27. But even assuming, for the moment, that Congress
lacks authority under the Commerce Clause to “compel
individuals not engaged in commerce to purchase an
unwanted product,” ante, at 18, such a limitation would be
inapplicable here. Everyone will, at some point, consume
health-care products and services. See supra, at 3. Thus,
if THE CHIEF JUSTICE is correct that an insurance
purchase requirement can be applied only to those who
“actively” consume health care, the minimum coverage
provision fits the bill.
THE CHIEF JUSTICE does not dispute that all U. S. resi
dents participate in the market for health services over
the course of their lives. See ante, at 16 (“Everyone will
eventually need health care at a time and to an extent
they cannot predict.”). But, THE CHIEF JUSTICE insists,
the uninsured cannot be considered active in the market
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for health care, because “[t]he proximity and degree of
connection between the [uninsured today] and [their]
subsequent commercial activity is too lacking.” Ante,
at 27.
This argument has multiple flaws. First, more than
60% of those without insurance visit a hospital or doctor’s
office each year. See supra, at 5. Nearly 90% will within
five years.4 An uninsured’s consumption of health care is
thus quite proximate: It is virtually certain to occur in the
next five years and more likely than not to occur this year.
Equally evident, Congress has no way of separating
those uninsured individuals who will need emergency medi-
cal care today (surely their consumption of medical care
is sufficiently imminent) from those who will not need
medical services for years to come. No one knows when an
emergency will occur, yet emergencies involving the unin
sured arise daily. To capture individuals who unexpect-
edly will obtain medical care in the very near future, then,
Congress needed to include individuals who will not go to
a doctor anytime soon. Congress, our decisions instruct,
has authority to cast its net that wide. See Perez v. United
States, 402 U. S. 146, 154 (1971) (“[W]hen it is necessary
in order to prevent an evil to make the law embrace more
than the precise thing to be prevented it may do so.” (in
ternal quotation marks omitted)).5
——————
4
See Dept. of Health and Human Services, National Center for
Health Statistics, Summary Health Statistics for U. S. Adults: National
Health Interview Survey 2009, Ser. 10, No. 249, p. 124, Table 37
(Dec. 2010).
5
Echoing THE CHIEF JUSTICE, the joint dissenters urge that the min
imum coverage provision impermissibly regulates young people who
“have no intention of purchasing [medical care]” and are too far “re
moved from the [health-care] market.” See post, at 8, 11. This criticism
ignores the reality that a healthy young person may be a day away
from needing health care. See supra, at 4. A victim of an accident or
unforeseen illness will consume extensive medical care immediately,
though scarcely expecting to do so.
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Second, it is Congress’ role, not the Court’s, to delineate
the boundaries of the market the Legislature seeks to
regulate. THE CHIEF JUSTICE defines the health-care mar-
ket as including only those transactions that will occur
either in the next instant or within some (unspecified)
proximity to the next instant. But Congress could reason
ably have viewed the market from a long-term perspective,
encompassing all transactions virtually certain to occur
over the next decade, see supra, at 19, not just those oc
curring here and now.
Third, contrary to THE CHIEF JUSTICE’s contention, our
precedent does indeed support “[t]he proposition that
Congress may dictate the conduct of an individual today
because of prophesied future activity.” Ante, at 26. In
Wickard, the Court upheld a penalty the Federal Govern
ment imposed on a farmer who grew more wheat than he
was permitted to grow under the Agricultural Adjustment
Act of 1938 (AAA). 317 U. S., at 114–115. He could not
be penalized, the farmer argued, as he was growing the
wheat for home consumption, not for sale on the open
market. Id., at 119. The Court rejected this argument.
Id., at 127–129. Wheat intended for home consumption,
the Court noted, “overhangs the market, and if induced by
rising prices, tends to flow into the market and check price
increases [intended by the AAA].” Id., at 128.
Similar reasoning supported the Court’s judgment in
Raich, which upheld Congress’ authority to regulate mari
juana grown for personal use. 545 U. S., at 19. Home
grown marijuana substantially affects the interstate mar-
ket for marijuana, we observed, for “the high demand in
the interstate market will [likely] draw such marijuana
into that market.” Ibid.
Our decisions thus acknowledge Congress’ authority,
under the Commerce Clause, to direct the conduct of an
individual today (the farmer in Wickard, stopped from
growing excess wheat; the plaintiff in Raich, ordered to
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cease cultivating marijuana) because of a prophesied
future transaction (the eventual sale of that wheat or
marijuana in the interstate market). Congress’ actions
are even more rational in this case, where the future
activity (the consumption of medical care) is certain to
occur, the sole uncertainty being the time the activity will
take place.
Maintaining that the uninsured are not active in the
health-care market, THE CHIEF JUSTICE draws an analogy
to the car market. An individual “is not ‘active in the car
market,’ ” THE CHIEF JUSTICE observes, simply because he
or she may someday buy a car. Ante, at 25. The analogy
is inapt. The inevitable yet unpredictable need for medi
cal care and the guarantee that emergency care will be
provided when required are conditions nonexistent in
other markets. That is so of the market for cars, and of
the market for broccoli as well. Although an individual
might buy a car or a crown of broccoli one day, there is no
certainty she will ever do so. And if she eventually wants
a car or has a craving for broccoli, she will be obliged to
pay at the counter before receiving the vehicle or nour
ishment. She will get no free ride or food, at the expense
of another consumer forced to pay an inflated price. See
Thomas More Law Center v. Obama, 651 F. 3d 529, 565
(CA6 2011) (Sutton, J., concurring in part) (“Regulating
how citizens pay for what they already receive (health
care), never quite know when they will need, and in the
case of severe illnesses or emergencies generally will not
be able to afford, has few (if any) parallels in modern
life.”). Upholding the minimum coverage provision on the
ground that all are participants or will be participants in
the health-care market would therefore carry no implica
tion that Congress may justify under the Commerce
Clause a mandate to buy other products and services.
Nor is it accurate to say that the minimum coverage
provision “compel[s] individuals . . . to purchase an un
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wanted product,” ante, at 18, or “suite of products,” post, at
11, n. 2 (joint opinion of SCALIA, KENNEDY, THOMAS, and
ALITO, JJ.). If unwanted today, medical service secured by
insurance may be desperately needed tomorrow. Virtually
everyone, I reiterate, consumes health care at some point
in his or her life. See supra, at 3. Health insurance is a
means of paying for this care, nothing more. In requiring
individuals to obtain insurance, Congress is therefore not
mandating the purchase of a discrete, unwanted product.
Rather, Congress is merely defining the terms on which
individuals pay for an interstate good they consume:
Persons subject to the mandate must now pay for medical
care in advance (instead of at the point of service) and
through insurance (instead of out of pocket). Establishing
payment terms for goods in or affecting interstate com
merce is quintessential economic regulation well within
Congress’ domain. See, e.g., United States v. Wrightwood
Dairy Co., 315 U. S. 110, 118 (1942). Cf. post, at 13 (joint
opinion of SCALIA, KENNEDY, THOMAS, and ALITO, JJ.)
(recognizing that “the Federal Government can prescribe
[a commodity’s] quality . . . and even [its price]”).
THE CHIEF JUSTICE also calls the minimum coverage
provision an illegitimate effort to make young, healthy
individuals subsidize insurance premiums paid by the less
hale and hardy. See ante, at 17, 25–26. This complaint,
too, is spurious. Under the current health-care system,
healthy persons who lack insurance receive a benefit for
which they do not pay: They are assured that, if they need
it, emergency medical care will be available, although they
cannot afford it. See supra, at 5–6. Those who have in
surance bear the cost of this guarantee. See ibid. By
requiring the healthy uninsured to obtain insurance or
pay a penalty structured as a tax, the minimum coverage
provision ends the free ride these individuals currently
enjoy.
In the fullness of time, moreover, today’s young and
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healthy will become society’s old and infirm. Viewed over
a lifespan, the costs and benefits even out: The young who
pay more than their fair share currently will pay less than
their fair share when they become senior citizens. And
even if, as undoubtedly will be the case, some individuals,
over their lifespans, will pay more for health insurance
than they receive in health services, they have little to
complain about, for that is how insurance works. Every
insured person receives protection against a catastrophic
loss, even though only a subset of the covered class will
ultimately need that protection.
b
In any event, THE CHIEF JUSTICE’s limitation of the
commerce power to the regulation of those actively en
gaged in commerce finds no home in the text of the Consti
tution or our decisions. Article I, §8, of the Constitution
grants Congress the power “[t]o regulate Commerce . . .
among the several States.” Nothing in this language im-
plies that Congress’ commerce power is limited to regu-
lating those actively engaged in commercial transactions.
Indeed, as the D. C. Circuit observed, “[a]t the time the
Constitution was [framed], to ‘regulate’ meant,” among
other things, “to require action.” See Seven-Sky v. Holder,
661 F. 3d 1, 16 (2011).
Arguing to the contrary, THE CHIEF JUSTICE notes that
“the Constitution gives Congress the power to ‘coin
Money,’ in addition to the power to ‘regulate the Value
thereof,’ ” and similarly “gives Congress the power to ‘raise
and support Armies’ and to ‘provide and maintain a Navy,’ in
addition to the power to ‘make Rules for the Government
and Regulation of the land and naval Forces.’ ” Ante, at
18–19 (citing Art. I, §8, cls. 5, 12–14). In separating the
power to regulate from the power to bring the subject of
the regulation into existence, THE CHIEF JUSTICE asserts,
“[t]he language of the Constitution reflects the natural
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understanding that the power to regulate assumes there is
already something to be regulated.” Ante, at 19.
This argument is difficult to fathom. Requiring individ
uals to obtain insurance unquestionably regulates the inter
state health-insurance and health-care markets, both of
them in existence well before the enactment of the ACA.
See Wickard, 317 U. S., at 128 (“The stimulation of com
merce is a use of the regulatory function quite as definitely
as prohibitions or restrictions thereon.”). Thus, the “some
thing to be regulated” was surely there when Congress
created the minimum coverage provision.6
Nor does our case law toe the activity versus inactiv
ity line. In Wickard, for example, we upheld the penalty
imposed on a farmer who grew too much wheat, even
though the regulation had the effect of compelling farmers
to purchase wheat in the open market. Id., at 127–129.
“[F]orcing some farmers into the market to buy what they
could provide for themselves” was, the Court held, a valid
means of regulating commerce. Id., at 128–129. In an-
other context, this Court similarly upheld Congress’ author
ity under the commerce power to compel an “inactive” land
holder to submit to an unwanted sale. See Monongahela
Nav. Co. v. United States, 148 U. S. 312, 335–337 (1893)
(“[U]pon the [great] power to regulate commerce[,]” Con
gress has the authority to mandate the sale of real prop-
erty to the Government, where the sale is essential to the
improvement of a navigable waterway (emphasis added));
Cherokee Nation v. Southern Kansas R. Co., 135 U. S. 641,
——————
6
THE CHIEF JUSTICE’s reliance on the quoted passages of the Consti
tution, see ante, at 18–19, is also dubious on other grounds. The power
to “regulate the Value” of the national currency presumably includes
the power to increase the currency’s worth—i.e., to create value where
none previously existed. And if the power to “[r]egulat[e] . . . the land
and naval Forces” presupposes “there is already [in existence] some
thing to be regulated,” i.e., an Army and a Navy, does Congress lack
authority to create an Air Force?
25
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657–659 (1890) (similar reliance on the commerce power
regarding mandated sale of private property for railroad
construction).
In concluding that the Commerce Clause does not per
mit Congress to regulate commercial “inactivity,” and there-
fore does not allow Congress to adopt the practical solu
tion it devised for the health-care problem, THE CHIEF
JUSTICE views the Clause as a “technical legal conception,”
precisely what our case law tells us not to do. Wickard,
317 U. S., at 122 (internal quotation marks omitted). See
also supra, at 14–16. This Court’s former endeavors to
impose categorical limits on the commerce power have not
fared well. In several pre-New Deal cases, the Court
attempted to cabin Congress’ Commerce Clause authority
by distinguishing “commerce” from activity once conceived
to be noncommercial, notably, “production,” “mining,” and
“manufacturing.” See, e.g., United States v. E. C. Knight
Co., 156 U. S. 1, 12 (1895) (“Commerce succeeds to manu
facture, and is not a part of it.”); Carter v. Carter Coal Co.,
298 U. S. 238, 304 (1936) (“Mining brings the subject
matter of commerce into existence. Commerce disposes of
it.”). The Court also sought to distinguish activities hav
ing a “direct” effect on interstate commerce, and for that
reason, subject to federal regulation, from those having
only an “indirect” effect, and therefore not amenable to
federal control. See, e.g., A. L. A. Schechter Poultry Corp.
v. United States, 295 U. S. 495, 548 (1935) (“[T]he dis-
tinction between direct and indirect effects of intrastate
transactions upon interstate commerce must be recognized
as a fundamental one.”).
These line-drawing exercises were untenable, and the
Court long ago abandoned them. “[Q]uestions of the power
of Congress [under the Commerce Clause],” we held in
Wickard, “are not to be decided by reference to any for-
mula which would give controlling force to nomenclature such
as ‘production’ and ‘indirect’ and foreclose consideration of
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the actual effects of the activity in question upon inter
state commerce.” 317 U. S., at 120. See also Morrison,
529 U. S., at 641–644 (Souter, J., dissenting) (recounting
the Court’s “nearly disastrous experiment” with formalis
tic limits on Congress’ commerce power). Failing to learn
from this history, THE CHIEF JUSTICE plows ahead with
his formalistic distinction between those who are “active
in commerce,” ante, at 20, and those who are not.
It is not hard to show the difficulty courts (and Con
gress) would encounter in distinguishing statutes that reg
ulate “activity” from those that regulate “inactivity.” As
Judge Easterbrook noted, “it is possible to restate most
actions as corresponding inactions with the same effect.”
Archie v. Racine, 847 F. 2d 1211, 1213 (CA7 1988) (en
banc). Take this case as an example. An individual who
opts not to purchase insurance from a private insurer can
be seen as actively selecting another form of insurance:
self-insurance. See Thomas More Law Center, 651 F. 3d,
at 561 (Sutton, J., concurring in part) (“No one is in
active when deciding how to pay for health care, as self
insurance and private insurance are two forms of action
for addressing the same risk.”). The minimum coverage
provision could therefore be described as regulating activ
ists in the self-insurance market.7 Wickard is another
example. Did the statute there at issue target activity
(the growing of too much wheat) or inactivity (the farmer’s
failure to purchase wheat in the marketplace)? If any
thing, the Court’s analysis suggested the latter. See 317
U. S., at 127–129.
At bottom, THE CHIEF JUSTICE’s and the joint dissent
——————
7
THE CHIEF JUSTICE’s characterization of individuals who choose not
to purchase private insurance as “doing nothing,” ante, at 20, is simi
larly questionable. A person who self-insures opts against prepayment for
a product the person will in time consume. When aggregated, exercise
of that option has a substantial impact on the health-care market. See
supra, at 5–7, 16–17.
27
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ers’ “view that an individual cannot be subject to Com
merce Clause regulation absent voluntary, affirmative acts
that enter him or her into, or affect, the interstate mar
ket expresses a concern for individual liberty that [is]
more redolent of Due Process Clause arguments.” Seven-
Sky, 661 F. 3d, at 19. See also Troxel v. Granville, 530
U. S. 57, 65 (2000) (plurality opinion) (“The [Due Process]
Clause also includes a substantive component that pro
vides heightened protection against government interfer
ence with certain fundamental rights and liberty inter
ests.” (internal quotation marks omitted)). Plaintiffs have
abandoned any argument pinned to substantive due pro
cess, however, see 648 F. 3d 1235, 1291, n. 93 (CA11
2011), and now concede that the provisions here at issue
do not offend the Due Process Clause.8
2
Underlying THE CHIEF JUSTICE’s view that the Com
merce Clause must be confined to the regulation of active
participants in a commercial market is a fear that the
commerce power would otherwise know no limits. See,
e.g., ante, at 23 (Allowing Congress to compel an individ-
ual not engaged in commerce to purchase a product would
“permi[t] Congress to reach beyond the natural extent
of its authority, everywhere extending the sphere of its
activity, and drawing all power into its impetuous vortex.”
(internal quotation marks omitted)). The joint dissenters
——————
8
Some adherents to the joint dissent have questioned the existence of
substantive due process rights. See McDonald v. Chicago, 561 U. S.
___, ___ (2010) (THOMAS, J., concurring) (slip op., at 7) (The notion that
the Due Process Clause “could define the substance of th[e] righ[t to
liberty] strains credulity.”); Albright v. Oliver, 510 U. S. 266, 275 (1994)
(SCALIA, J., concurring) (“I reject the proposition that the Due Process
Clause guarantees certain (unspecified) liberties[.]”). Given these
Justices’ reluctance to interpret the Due Process Clause as guarantee
ing liberty interests, their willingness to plant such protections in the
Commerce Clause is striking.
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express a similar apprehension. See post, at 8 (If the
minimum coverage provision is upheld under the com
merce power then “the Commerce Clause becomes a font of
unlimited power, . . . the hideous monster whose devour
ing jaws . . . spare neither sex nor age, nor high nor low,
nor sacred nor profane.” (internal quotation marks omit
ted)). This concern is unfounded.
First, THE CHIEF JUSTICE could certainly uphold the
individual mandate without giving Congress carte blanche
to enact any and all purchase mandates. As several times
noted, the unique attributes of the health-care market
render everyone active in that market and give rise to a
significant free-riding problem that does not occur in other
markets. See supra, at 3–7, 16–18, 21.
Nor would the commerce power be unbridled, absent
THE CHIEF JUSTICE’s “activity” limitation. Congress would
remain unable to regulate noneconomic conduct that has
only an attenuated effect on interstate commerce and is
traditionally left to state law. See Lopez, 514 U. S., at
567; Morrison, 529 U. S., at 617–619. In Lopez, for
example, the Court held that the Federal Government
lacked power, under the Commerce Clause, to criminalize
the possession of a gun in a local school zone. Possessing
a gun near a school, the Court reasoned, “is in no sense
an economic activity that might, through repetition else
where, substantially affect any sort of interstate com
merce.” 514 U. S., at 567; ibid. (noting that the Court
would have “to pile inference upon inference” to conclude
that gun possession has a substantial effect on commerce).
Relying on similar logic, the Court concluded in Morrison
that Congress could not regulate gender-motivated vio
lence, which the Court deemed to have too “attenuated
[an] effect upon interstate commerce.” 529 U. S., at 615.
An individual’s decision to self-insure, I have explained,
is an economic act with the requisite connection to inter
state commerce. See supra, at 16–17. Other choices
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individuals make are unlikely to fit the same or similar
description. As an example of the type of regulation he
fears, THE CHIEF JUSTICE cites a Government mandate to
purchase green vegetables. Ante, at 22–23. One could call
this concern “the broccoli horrible.” Congress, THE CHIEF
JUSTICE posits, might adopt such a mandate, reasoning
that an individual’s failure to eat a healthy diet, like the
failure to purchase health insurance, imposes costs on
others. See ibid.
Consider the chain of inferences the Court would have
to accept to conclude that a vegetable-purchase mandate
was likely to have a substantial effect on the health-care
costs borne by lithe Americans. The Court would have to
believe that individuals forced to buy vegetables would
then eat them (instead of throwing or giving them away),
would prepare the vegetables in a healthy way (steamed
or raw, not deep-fried), would cut back on unhealthy foods,
and would not allow other factors (such as lack of exercise
or little sleep) to trump the improved diet.9 Such “pil[ing
of] inference upon inference” is just what the Court re
fused to do in Lopez and Morrison.
Other provisions of the Constitution also check congres
sional overreaching. A mandate to purchase a particu-
lar product would be unconstitutional if, for example, the
edict impermissibly abridged the freedom of speech, inter
fered with the free exercise of religion, or infringed on a
liberty interest protected by the Due Process Clause.
——————
9
The failure to purchase vegetables in THE CHIEF JUSTICE’s hypothet
ical, then, is not what leads to higher health-care costs for others;
rather, it is the failure of individuals to maintain a healthy diet, and
the resulting obesity, that creates the cost-shifting problem. See ante,
at 22–23. Requiring individuals to purchase vegetables is thus
several steps removed from solving the problem. The failure to obtain
health insurance, by contrast, is the immediate cause of the cost-shifting
Congress sought to address through the ACA. See supra, at 5–7.
Requiring individuals to obtain insurance attacks the source of the
problem directly, in a single step.
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Supplementing these legal restraints is a formidable
check on congressional power: the democratic process. See
Raich, 545 U. S., at 33; Wickard, 317 U. S., at 120 (repeat
ing Chief Justice Marshall’s “warning that effective re
straints on [the commerce power’s] exercise must proceed
from political rather than judicial processes” (citing Gib-
bons v. Ogden, 9 Wheat. 1, 197 (1824)). As the controversy
surrounding the passage of the Affordable Care Act at
tests, purchase mandates are likely to engender political
resistance. This prospect is borne out by the behavior of
state legislators. Despite their possession of unquestioned
authority to impose mandates, state governments have
rarely done so. See Hall, Commerce Clause Challenges to
Health Care Reform, 159 U. Pa. L. Rev. 1825, 1838 (2011).
When contemplated in its extreme, almost any power
looks dangerous. The commerce power, hypothetically,
would enable Congress to prohibit the purchase and home
production of all meat, fish, and dairy goods, effectively
compelling Americans to eat only vegetables. Cf. Raich,
545 U. S., at 9; Wickard, 317 U. S., at 127–129. Yet no one
would offer the “hypothetical and unreal possibilit[y],”
Pullman Co. v. Knott, 235 U. S. 23, 26 (1914), of a vegetar
ian state as a credible reason to deny Congress the author
ity ever to ban the possession and sale of goods. THE
CHIEF JUSTICE accepts just such specious logic when he
cites the broccoli horrible as a reason to deny Congress
the power to pass the individual mandate. Cf. R. Bork,
The Tempting of America 169 (1990) (“Judges and lawyers
live on the slippery slope of analogies; they are not supposed
to ski it to the bottom.”). But see, e.g., post, at 3 (joint opin
ion of SCALIA, KENNEDY, THOMAS, and ALITO, JJ.) (assert
ing, outlandishly, that if the minimum coverage provision
is sustained, then Congress could make “breathing in and
out the basis for federal prescription”).
31
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3
To bolster his argument that the minimum coverage
provision is not valid Commerce Clause legislation, THE
CHIEF JUSTICE emphasizes the provision’s novelty. See
ante, at 18 (asserting that “sometimes the most telling
indication of [a] severe constitutional problem . . . is the
lack of historical precedent for Congress’s action” (internal
quotation marks omitted)). While an insurance-purchase
mandate may be novel, THE CHIEF JUSTICE’s argument
certainly is not. “[I]n almost every instance of the exer-
cise of the [commerce] power differences are asserted from
previous exercises of it and made a ground of attack.”
Hoke v. United States, 227 U. S. 308, 320 (1913). See, e.g.,
Brief for Petitioner in Perez v. United States, O. T. 1970,
No. 600, p. 5 (“unprecedented exercise of power”); Sup-
plemental Brief for Appellees in Katzenbach v. McClung,
O. T. 1964, No. 543, p. 40 (“novel assertion of federal
power”); Brief for Appellee in Wickard v. Filburn, O. T.
1941, No. 59, p. 6 (“complete departure”). For decades,
the Court has declined to override legislation because of
its novelty, and for good reason. As our national economy
grows and changes, we have recognized, Congress must
adapt to the changing “economic and financial realities.”
See supra, at 14–15. Hindering Congress’ ability to do so
is shortsighted; if history is any guide, today’s constriction
of the Commerce Clause will not endure. See supra, at
25–26.
III
A
For the reasons explained above, the minimum coverage
provision is valid Commerce Clause legislation. See su-
pra, Part II. When viewed as a component of the entire
ACA, the provision’s constitutionality becomes even plain
er.
The Necessary and Proper Clause “empowers Congress
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to enact laws in effectuation of its [commerce] powe[r]
that are not within its authority to enact in isolation.”
Raich, 545 U. S., at 39 (SCALIA, J., concurring in judgment).
Hence, “[a] complex regulatory program . . . can survive a
Commerce Clause challenge without a showing that every
single facet of the program is independently and directly
related to a valid congressional goal.” Indiana, 452 U. S.,
at 329, n. 17. “It is enough that the challenged provisions
are an integral part of the regulatory program and that
the regulatory scheme when considered as a whole satis
fies this test.” Ibid. (collecting cases). See also Raich,
545 U. S., at 24–25 (A challenged statutory provision
fits within Congress’ commerce authority if it is an “essen
tial par[t] of a larger regulation of economic activity,”
such that, in the absence of the provision, “the regulatory
scheme could be undercut.” (quoting Lopez, 514 U. S., at
561)); Raich, 545 U. S., at 37 (SCALIA, J., concurring in
judgment) (“Congress may regulate even noneconomic
local activity if that regulation is a necessary part of
a more general regulation of interstate commerce. The
relevant question is simply whether the means chosen are
‘reasonably adapted’ to the attainment of a legitimate end
under the commerce power.” (citation omitted)).
Recall that one of Congress’ goals in enacting the Af
fordable Care Act was to eliminate the insurance indus
try’s practice of charging higher prices or denying coverage
to individuals with preexisting medical conditions. See
supra, at 9–10. The commerce power allows Congress to
ban this practice, a point no one disputes. See United
States v. South-Eastern Underwriters Assn., 322 U. S. 533,
545, 552–553 (1944) (Congress may regulate “the methods
by which interstate insurance companies do business.”).
Congress knew, however, that simply barring insurance
companies from relying on an applicant’s medical history
would not work in practice. Without the individual man
date, Congress learned, guaranteed-issue and community
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rating requirements would trigger an adverse-selection
death-spiral in the health-insurance market: Insurance
premiums would skyrocket, the number of uninsured
would increase, and insurance companies would exit the
market. See supra, at 10–11. When complemented by an
insurance mandate, on the other hand, guaranteed issue
and community rating would work as intended, increasing
access to insurance and reducing uncompensated care.
See supra, at 11–12. The minimum coverage provision is
thus an “essential par[t] of a larger regulation of economic
activity”; without the provision, “the regulatory scheme
[w]ould be undercut.” Raich, 545 U. S., at 24–25 (inter-
nal quotation marks omitted). Put differently, the mini
mum coverage provision, together with the guaranteed
issue and community-rating requirements, is “ ‘reasonably
adapted’ to the attainment of a legitimate end under
the commerce power”: the elimination of pricing and
sales practices that take an applicant’s medical history
into account. See id., at 37 (SCALIA, J., concurring in
judgment).
B
Asserting that the Necessary and Proper Clause does
not authorize the minimum coverage provision, THE CHIEF
JUSTICE focuses on the word “proper.” A mandate to
purchase health insurance is not “proper” legislation, THE
CHIEF JUSTICE urges, because the command “under
mine[s] the structure of government established by the
Constitution.” Ante, at 28. If long on rhetoric, THE CHIEF
JUSTICE’s argument is short on substance.
THE CHIEF JUSTICE cites only two cases in which this
Court concluded that a federal statute impermissibly
transgressed the Constitution’s boundary between state
and federal authority: Printz v. United States, 521 U. S.
898 (1997), and New York v. United States, 505 U. S.
144 (1992). See ante, at 29. The statutes at issue in
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both cases, however, compelled state officials to act on the
Federal Government’s behalf. 521 U. S., at 925–933 (hold
ing unconstitutional a statute obligating state law en
forcement officers to implement a federal gun-control law);
New York, 505 U. S., at 176–177 (striking down a statute
requiring state legislators to pass regulations pursuant to
Congress’ instructions). “[Federal] laws conscripting state
officers,” the Court reasoned, “violate state sovereignty
and are thus not in accord with the Constitution.” Printz,
521 U. S., at 925, 935; New York, 505 U. S., at 176.
The minimum coverage provision, in contrast, acts
“directly upon individuals, without employing the States
as intermediaries.” New York, 505 U. S., at 164. The
provision is thus entirely consistent with the Consti
tution’s design. See Printz, 521 U. S., at 920 (“[T]he
Framers explicitly chose a Constitution that confers upon
Congress the power to regulate individuals, not States.”
(internal quotation marks omitted)).
Lacking case law support for his holding, THE CHIEF
JUSTICE nevertheless declares the minimum coverage
provision not “proper” because it is less “narrow in scope”
than other laws this Court has upheld under the Neces
sary and Proper Clause. Ante, at 29 (citing United States
v. Comstock, 560 U. S. ___ (2010); Sabri v. United States,
541 U. S. 600 (2004); Jinks v. Richland County, 538 U. S.
456 (2003)). THE CHIEF JUSTICE’s reliance on cases in
which this Court has affirmed Congress’ “broad authority
to enact federal legislation” under the Necessary and
Proper Clause, Comstock, 560 U. S., at ___ (slip op., at 5),
is underwhelming.
Nor does THE CHIEF JUSTICE pause to explain why the
power to direct either the purchase of health insurance or,
alternatively, the payment of a penalty collectible as a tax
is more far-reaching than other implied powers this Court
has found meet under the Necessary and Proper Clause.
These powers include the power to enact criminal laws,
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see, e.g., United States v. Fox, 95 U. S. 670, 672 (1878); the
power to imprison, including civil imprisonment, see, e.g.,
Comstock, 560 U. S., at ___ (slip op., at 1); and the power
to create a national bank, see McCulloch, 4 Wheat., at 425.
See also Jinks, 538 U. S., at 463 (affirming Congress’
power to alter the way a state law is applied in state court,
where the alteration “promotes fair and efficient operation
of the federal courts”).10
In failing to explain why the individual mandate threat
ens our constitutional order, THE CHIEF JUSTICE disserves
future courts. How is a judge to decide, when ruling on
the constitutionality of a federal statute, whether Con
gress employed an “independent power,” ante, at 28, or
merely a “derivative” one, ante, at 29. Whether the power
used is “substantive,” ante, at 30, or just “incidental,” ante,
at 29? The instruction THE CHIEF JUSTICE, in effect,
provides lower courts: You will know it when you see it.
It is more than exaggeration to suggest that the mini
mum coverage provision improperly intrudes on “essential
attributes of state sovereignty.” Ibid. (internal quotation
marks omitted). First, the Affordable Care Act does not
operate “in [an] are[a] such as criminal law enforcement or
education where States historically have been sovereign.”
Lopez, 514 U. S., at 564. As evidenced by Medicare, Medi
caid, the Employee Retirement Income Security Act of
1974 (ERISA), and the Health Insurance Portability and
Accountability Act of 1996 (HIPAA), the Federal Govern
——————
10
Indeed, Congress regularly and uncontroversially requires individ
uals who are “doing nothing,” see ante, at 20, to take action. Exam
ples include federal requirements to report for jury duty, 28 U. S. C.
§1866(g) (2006 ed., Supp. IV); to register for selective service, 50
U. S. C. App. §453; to purchase firearms and gear in anticipation of
service in the Militia, 1 Stat. 271 (Uniform Militia Act of 1792); to turn
gold currency over to the Federal Government in exchange for paper
currency, see Nortz v. United States, 294 U. S. 317, 328 (1935); and to
file a tax return, 26 U. S. C. §6012 (2006 ed., Supp. IV).
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ment plays a lead role in the health-care sector, both as a
direct payer and as a regulator.
Second, and perhaps most important, the minimum
coverage provision, along with other provisions of the
ACA, addresses the very sort of interstate problem that
made the commerce power essential in our federal system.
See supra, at 12–14. The crisis created by the large num
ber of U. S. residents who lack health insurance is one of
national dimension that States are “separately incompe
tent” to handle. See supra, at 7–8, 13. See also Maryland
Brief 15–26 (describing “the impediments to effective state
policymaking that flow from the interconnectedness of
each state’s healthcare economy” and emphasizing that
“state-level reforms cannot fully address the problems
associated with uncompensated care”). Far from tram
pling on States’ sovereignty, the ACA attempts a federal
solution for the very reason that the States, acting sepa
rately, cannot meet the need. Notably, the ACA serves the
general welfare of the people of the United States while
retaining a prominent role for the States. See id., at 31–
36 (explaining and illustrating how the ACA affords States
wide latitude in implementing key elements of the Act’s
reforms).11
——————
11
In a separate argument, the joint dissenters contend that the min
imum coverage provision is not necessary and proper because it was not
the “only . . . way” Congress could have made the guaranteed-issue and
community-rating reforms work. Post, at 9–10. Congress could also
have avoided an insurance-market death spiral, the dissenters main
tain, by imposing a surcharge on those who did not previously purchase
insurance when those individuals eventually enter the health
insurance system. Post, at 10. Or Congress could “den[y] a full income
tax credit” to those who do not purchase insurance. Ibid.
Neither a surcharge on those who purchase insurance nor the de
nial of a tax credit to those who do not would solve the problem created
by guaranteed-issue and community-rating requirements. Neither
would prompt the purchase of insurance before sickness or injury
occurred.
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IV
In the early 20th century, this Court regularly struck
down economic regulation enacted by the peoples’ repre
sentatives in both the States and the Federal Government.
See, e.g., Carter Coal Co., 298 U. S., at 303–304, 309–310;
Dagenhart, 247 U. S., at 276–277; Lochner v. New York,
198 U. S. 45, 64 (1905). THE CHIEF JUSTICE’s Commerce
Clause opinion, and even more so the joint dissenters’
reasoning, see post, at 4–16, bear a disquieting resem
blance to those long-overruled decisions.
Ultimately, the Court upholds the individual mandate
as a proper exercise of Congress’ power to tax and spend
“for the . . . general Welfare of the United States.” Art. I,
§8, cl. 1; ante, at 43–44. I concur in that determination,
which makes THE CHIEF JUSTICE’s Commerce Clause
essay all the more puzzling. Why should THE CHIEF
JUSTICE strive so mightily to hem in Congress’ capacity to
meet the new problems arising constantly in our ever
developing modern economy? I find no satisfying response
to that question in his opinion.12 \\
——————
But even assuming there were “practicable” alternatives to the
minimum coverage provision, “we long ago rejected the view that the
Necessary and Proper Clause demands that an Act of Congress be
‘absolutely necessary’ to the exercise of an enumerated power.” Jinks
v. Richland County, 538 U. S. 456, 462 (2003) (quoting McCulloch
v. Maryland, 4 Wheat. 316, 414–415 (1819)). Rather, the statutory
provision at issue need only be “conducive” and “[reasonably] adapted”
to the goal Congress seeks to achieve. Jinks, 538 U. S., at 462 (internal
quotation marks omitted). The minimum coverage provision meets this
requirement. See supra, at 31–33.
12
THE CHIEF JUSTICE states that he must evaluate the constitution
ality of the minimum coverage provision under the Commerce Clause
because the provision “reads more naturally as a command to buy
insurance than as a tax.” Ante, at 44. THE CHIEF JUSTICE ultimately
concludes, however, that interpreting the provision as a tax is a “fairly
possible” construction. Ante, at 32 (internal quotation marks omitted).
That being so, I see no reason to undertake a Commerce Clause analy
sis that is not outcome determinative.
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V
Through Medicaid, Congress has offered the States an
opportunity to furnish health care to the poor with the aid
of federal financing. To receive federal Medicaid funds,
States must provide health benefits to specified categories
of needy persons, including pregnant women, children,
parents, and adults with disabilities. Guaranteed eligibil
ity varies by category: for some it is tied to the federal
poverty level (incomes up to 100% or 133%); for others it
depends on criteria such as eligibility for designated state
or federal assistance programs. The ACA enlarges the
population of needy people States must cover to include
adults under age 65 with incomes up to 133% of the fed-
eral poverty level. The spending power conferred by the
Constitution, the Court has never doubted, permits Con
gress to define the contours of programs financed with
federal funds. See, e.g., Pennhurst State School and Hos-
pital v. Halderman, 451 U. S. 1, 17 (1981). And to expand
coverage, Congress could have recalled the existing legis
lation, and replaced it with a new law making Medicaid as
embracive of the poor as Congress chose.
The question posed by the 2010 Medicaid expansion,
then, is essentially this: To cover a notably larger popula
tion, must Congress take the repeal/reenact route, or may
it achieve the same result by amending existing law? The
answer should be that Congress may expand by amend
ment the classes of needy persons entitled to Medicaid
benefits. A ritualistic requirement that Congress repeal
and reenact spending legislation in order to enlarge the
population served by a federally funded program would
advance no constitutional principle and would scarcely
serve the interests of federalism. To the contrary, such a
requirement would rigidify Congress’ efforts to empower
States by partnering with them in the implementation of
federal programs.
Medicaid is a prototypical example of federal-state coop
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eration in serving the Nation’s general welfare. Rather
than authorizing a federal agency to administer a uni-
form national health-care system for the poor, Con-
gress offered States the opportunity to tailor Medicaid
grants to their particular needs, so long as they remain
within bounds set by federal law. In shaping Medicaid,
Congress did not endeavor to fix permanently the terms
participating states must meet; instead, Congress re
served the “right to alter, amend, or repeal” any provision
of the Medicaid Act. 42 U. S. C. §1304. States, for their
part, agreed to amend their own Medicaid plans consistent
with changes from time to time made in the federal law.
See 42 CFR §430.12©(i) (2011). And from 1965 to the
present, States have regularly conformed to Congress’
alterations of the Medicaid Act.
THE CHIEF JUSTICE acknowledges that Congress may
“condition the receipt of [federal] funds on the States’
complying with restrictions on the use of those funds,”
ante, at 50, but nevertheless concludes that the 2010
expansion is unduly coercive. His conclusion rests on
three premises, each of them essential to his theory. First,
the Medicaid expansion is, in THE CHIEF JUSTICE’s view, a
new grant program, not an addition to the Medicaid pro
gram existing before the ACA’s enactment. Congress, THE
CHIEF JUSTICE maintains, has threatened States with the
loss of funds from an old program in an effort to get them
to adopt a new one. Second, the expansion was unforesee
able by the States when they first signed on to Medicaid.
Third, the threatened loss of funding is so large that the
States have no real choice but to participate in the Medi
caid expansion. THE CHIEF JUSTICE therefore—for the
first time ever—finds an exercise of Congress’ spending
power unconstitutionally coercive.
Medicaid, as amended by the ACA, however, is not two
spending programs; it is a single program with a constant
aim—to enable poor persons to receive basic health care
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when they need it. Given past expansions, plus express
statutory warning that Congress may change the re
quirements participating States must meet, there can be
no tenable claim that the ACA fails for lack of notice.
Moreover, States have no entitlement to receive any Medi
caid funds; they enjoy only the opportunity to accept funds
on Congress’ terms. Future Congresses are not bound
by their predecessors’ dispositions; they have authority to
spend federal revenue as they see fit. The Federal Gov
ernment, therefore, is not, as THE CHIEF JUSTICE charges,
threatening States with the loss of “existing” funds from
one spending program in order to induce them to opt into
another program. Congress is simply requiring States to
do what States have long been required to do to receive
Medicaid funding: comply with the conditions Congress
prescribes for participation.
A majority of the Court, however, buys the argument
that prospective withholding of funds formerly available
exceeds Congress’ spending power. Given that holding, I
entirely agree with THE CHIEF JUSTICE as to the appropri
ate remedy. It is to bar the withholding found impermis
sible—not, as the joint dissenters would have it, to scrap
the expansion altogether, see post, at 46–48. The dissent
ers’ view that the ACA must fall in its entirety is a radical
departure from the Court’s normal course. When a consti
tutional infirmity mars a statute, the Court ordinarily
removes the infirmity. It undertakes a salvage operation;
it does not demolish the legislation. See, e.g., Brockett v.
Spokane Arcades, Inc., 472 U. S. 491, 504 (1985) (Court’s
normal course is to declare a statute invalid “to the extent
that it reaches too far, but otherwise [to leave the statute]
intact”). That course is plainly in order where, as in this
case, Congress has expressly instructed courts to leave
untouched every provision not found invalid. See 42
U. S. C. §1303. Because THE CHIEF JUSTICE finds the
withholding—not the granting—of federal funds incom
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patible with the Spending Clause, Congress’ extension of
Medicaid remains available to any State that affirms its
willingness to participate.
A
Expansion has been characteristic of the Medicaid pro
gram. Akin to the ACA in 2010, the Medicaid Act as
passed in 1965 augmented existing federal grant programs
jointly administered with the States.13 States were not
required to participate in Medicaid. But if they did, the
Federal Government paid at least half the costs. To qual-
ify for these grants, States had to offer a minimum level of
health coverage to beneficiaries of four federally funded,
state-administered welfare programs: Aid to Families with
Dependent Children; Old Age Assistance; Aid to the Blind;
and Aid to the Permanently and Totally Disabled. See
Social Security Amendments of 1965, §121(a), 79 Stat.
343; Schweiker v. Gray Panthers, 453 U. S. 34, 37 (1981).
At their option, States could enroll additional “medically
needy” individuals; these costs, too, were partially borne by
the Federal Government at the same, at least 50%, rate.
Ibid.
Since 1965, Congress has amended the Medicaid pro
gram on more than 50 occasions, sometimes quite sizably.
Most relevant here, between 1988 and 1990, Congress
——————
13
Medicaid was “plainly an extension of the existing Kerr-Mills”
grant program. Huberfeld, Federalizing Medicaid, 14 U. Pa. J. Const.
L. 431, 444–445 (2011). Indeed, the “section of the Senate report
dealing with Title XIX”—the title establishing Medicaid—“was entitled,
‘Improvement and Extension of Kerr-Mills Medical Assistance Pro
gram.’ ” Stevens & Stevens, Welfare Medicine in America 51 (1974)
(quoting S. Rep. No. 404, 89th Cong., 1st Sess., pt. 1, p. 9 (1965)).
Setting the pattern for Medicaid, Kerr-Mills reimbursed States for a
portion of the cost of health care provided to welfare recipients if
States met conditions specified in the federal law, e.g., participating
States were obliged to offer minimum coverage for hospitalization and
physician services. See Huberfeld, supra, at 443–444.
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required participating States to include among their bene
ficiaries pregnant women with family incomes up to 133%
of the federal poverty level, children up to age 6 at the
same income levels, and children ages 6 to 18 with family
incomes up to 100% of the poverty level. See 42 U. S. C.
§§1396a(a)(10)(A)(i), 1396a(l); Medicare Catastrophic Cov
erage Act of 1988, §302, 102 Stat. 750; Omnibus Budget
Reconciliation Act of 1989, §6401, 103 Stat. 2258; Om-
nibus Budget Reconciliation Act of 1990, §4601, 104 Stat.
1388–166. These amendments added millions to the
Medicaid-eligible population. Dubay & Kenney, Lessons
from the Medicaid Expansions for Children and Pregnant
Women 5 (Apr. 1997).
Between 1966 and 1990, annual federal Medicaid spend
ing grew from $631.6 million to $42.6 billion; state
spending rose to $31 billion over the same period. See Dept.
of Health and Human Services, National Health Expendi
tures by Type of Service and Source of Funds: Calendar
Years 1960 to 2010 (table).14 And between 1990 and 2010,
federal spending increased to $269.5 billion. Ibid. En
largement of the population and services covered by Medi
caid, in short, has been the trend.
Compared to past alterations, the ACA is notable for the
extent to which the Federal Government will pick up the
tab. Medicaid’s 2010 expansion is financed largely by
federal outlays. In 2014, federal funds will cover 100%
of the costs for newly eligible beneficiaries; that rate will
gradually decrease before settling at 90% in 2020. 42
U. S. C. §1396d(y) (2006 ed., Supp. IV). By comparison,
federal contributions toward the care of beneficiaries
eligible pre-ACA range from 50% to 83%, and averaged
57% between 2005 and 2008. §1396d(b) (2006 ed., Supp.
——————
14
Available online at http:%%//%%www.cms.gov/Research-Statistics-Data-
and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/
NationalHealthAccountsHistorical.html.
43
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IV); Dept. of Health and Human Services, Centers for
Medicare and Medicaid Services, C. Truffer et al., 2010
Actuarial Report on the Financial Outlook for Medicaid,
p. 20.
Nor will the expansion exorbitantly increase state Medi
caid spending. The Congressional Budget Office (CBO)
projects that States will spend 0.8% more than they would
have, absent the ACA. See CBO, Spending & Enrollment
Detail for CBO’s March 2009 Baseline. But see ante, at
44–45 (“[T]he Act dramatically increases state obligations
under Medicaid.”); post, at 45 (joint opinion of SCALIA,
KENNEDY, THOMAS, and ALITO, JJ.) (“[A]cceptance of the
[ACA expansion] will impose very substantial costs on
participating States.”). Whatever the increase in state
obligations after the ACA, it will pale in comparison to the
increase in federal funding.15
Finally, any fair appraisal of Medicaid would require
acknowledgment of the considerable autonomy States
enjoy under the Act. Far from “conscript[ing] state agen
cies into the national bureaucratic army,” ante, at 55
(citing FERC v. Mississippi, 456 U. S. 742, 775 (1982)
(O’Connor, J., concurring in judgment in part and dissent
ing in part) (brackets in original and internal quotation
marks omitted)), Medicaid “is designed to advance cooper
ative federalism.” Wisconsin Dept. of Health and Family
Servs. v. Blumer, 534 U. S. 473, 495 (2002) (citing Harris
v. McRae, 448 U. S. 297, 308 (1980)). Subject to its basic
——————
15
Even the study on which the plaintiffs rely, see Brief for Petitioners
10, concludes that “[w]hile most states will experience some increase in
spending, this is quite small relative to the federal matching payments
and low relative to the costs of uncompensated care that [the states]
would bear if the[re] were no health reform.” See Kaiser Commission
on Medicaid & the Uninsured, Medicaid Coverage & Spending in
Health Reform 16 (May 2010). Thus there can be no objection to the
ACA’s expansion of Medicaid as an “unfunded mandate.” Quite the
contrary, the program is impressively well funded.
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requirements, the Medicaid Act empowers States to “select
dramatically different levels of funding and coverage,
alter and experiment with different financing and delivery
modes, and opt to cover (or not to cover) a range of parti-
cular procedures and therapies. States have leveraged
this policy discretion to generate a myriad of dramatically
different Medicaid programs over the past several dec
ades.” Ruger, Of Icebergs and Glaciers, 75 Law & Con
temp. Probs. 215, 233 (2012) (footnote omitted). The ACA
does not jettison this approach. States, as first-line ad
ministrators, will continue to guide the distribution of
substantial resources among their needy populations.
The alternative to conditional federal spending, it bears
emphasis, is not state autonomy but state marginaliza
tion.16 In 1965, Congress elected to nationalize health
coverage for seniors through Medicare. It could similarly
have established Medicaid as an exclusively federal pro
gram. Instead, Congress gave the States the opportunity
to partner in the program’s administration and develop
ment. Absent from the nationalized model, of course, is
the state-level policy discretion and experimentation that
is Medicaid’s hallmark; undoubtedly the interests of fed
eralism are better served when States retain a meaning-
ful role in the implementation of a program of such
importance. See Caminker, State Sovereignty and Sub
ordinacy, 95 Colum. L. Rev. 1001, 1002–1003 (1995) (coopera-
tive federalism can preserve “a significant role for state
discretion in achieving specified federal goals, where the
alternative is complete federal preemption of any state
——————
16
In 1972, for example, Congress ended the federal cash-assistance
program for the aged, blind, and disabled. That program previously
had been operated jointly by the Federal and State Governments, as
is the case with Medicaid today. Congress replaced the cooperative
federal program with the nationalized Supplemental Security In-
come (SSI) program. See Schweiker v. Gray Panthers, 453 U. S. 34, 38
(1981).
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regulatory role”); Rose-Ackerman, Cooperative Federalism
and Co-optation, 92 Yale L. J. 1344, 1346 (1983) (“If
the federal government begins to take full responsibility
for social welfare spending and preempts the states, the
result is likely to be weaker . . . state governments.”).17
Although Congress “has no obligation to use its Spend
ing Clause power to disburse funds to the States,” College
Savings Bank v. Florida Prepaid Postsecondary Ed. Ex-
pense Bd., 527 U. S. 666, 686 (1999), it has provided Medi
caid grants notable for their generosity and flexibility.
“[S]uch funds,” we once observed, “are gifts,” id., at 686–
687, and so they have remained through decades of expan
sion in their size and scope.
B
The Spending Clause authorizes Congress “to pay the
Debts and provide for the . . . general Welfare of the
United States.” Art. I, §8, cl. 1. To ensure that federal funds
granted to the States are spent “to ‘provide for the . . .
general Welfare’ in the manner Congress intended,” ante,
at 46, Congress must of course have authority to impose
limitations on the States’ use of the federal dollars. This
Court, time and again, has respected Congress’ prescrip
tion of spending conditions, and has required States to
abide by them. See, e.g., Pennhurst, 451 U. S., at 17
(“[O]ur cases have long recognized that Congress may fix
the terms on which it shall disburse federal money to the
States.”). In particular, we have recognized Congress’
prerogative to condition a State’s receipt of Medicaid
——————
17
THE CHIEF JUSTICE and the joint dissenters perceive in cooperative
federalism a “threa[t]” to “political accountability.” Ante, at 48; see
post, at 34–35. By that, they mean voter confusion: Citizens upset by
unpopular government action, they posit, may ascribe to state officials
blame more appropriately laid at Congress’ door. But no such confu
sion is apparent in this case: Medicaid’s status as a federally funded,
state-administered program is hardly hidden from view.
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funding on compliance with the terms Congress set for
participation in the program. See, e.g., Harris, 448 U. S.,
at 301 (“[O]nce a State elects to participate [in Medicaid],
it must comply with the requirements of [the Medicaid
Act].”); Arkansas Dept. of Health and Human Servs. v.
Ahlborn, 547 U. S. 268, 275 (2006); Frew v. Hawkins, 540
U. S. 431, 433 (2004); Atkins v. Rivera, 477 U. S. 154, 156–
157 (1986).
Congress’ authority to condition the use of federal funds
is not confined to spending programs as first launched.
The legislature may, and often does, amend the law, im
posing new conditions grant recipients henceforth must
meet in order to continue receiving funds. See infra, at 54
(describing Bennett v. Kentucky Dept. of Ed., 470 U. S.
656, 659–660 (1985) (enforcing restriction added five years
after adoption of educational program)).
Yes, there are federalism-based limits on the use of
Congress’ conditional spending power. In the leading
decision in this area, South Dakota v. Dole, 483 U. S. 203
(1987), the Court identified four criteria. The conditions
placed on federal grants to States must (a) promote the
“general welfare,” (b) “unambiguously” inform States what
is demanded of them, © be germane “to the federal inter
est in particular national projects or programs,” and (d)
not “induce the States to engage in activities that would
themselves be unconstitutional.” Id., at 207–208, 210
(internal quotation marks omitted).18
The Court in Dole mentioned, but did not adopt, a fur
ther limitation, one hypothetically raised a half-century
earlier: In “some circumstances,” Congress might be pro
hibited from offering a “financial inducement . . . so coer
——————
18
Although the plaintiffs, in the proceedings below, did not contest
the ACA’s satisfaction of these criteria, see 648 F. 3d 1235, 1263 (CA11
2011), THE CHIEF JUSTICE appears to rely heavily on the second crite-
rion. Compare ante, at 52, 54, with infra, at 52–54.
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cive as to pass the point at which ‘pressure turns into
compulsion.’ ” Id., at 211 (quoting Steward Machine Co. v.
Davis, 301 U. S. 548, 590 (1937)). Prior to today’s deci
sion, however, the Court has never ruled that the terms of
any grant crossed the indistinct line between temptation
and coercion.
Dole involved the National Minimum Drinking Age Act,
23 U. S. C. §158, enacted in 1984. That Act directed the
Secretary of Transportation to withhold 5% of the federal
highway funds otherwise payable to a State if the State
permitted purchase of alcoholic beverages by persons
less than 21 years old. Drinking age was not within the
authority of Congress to regulate, South Dakota argued,
because the Twenty-First Amendment gave the States
exclusive power to control the manufacture, transporta
tion, and consumption of alcoholic beverages. The small
percentage of highway-construction funds South Dakota
stood to lose by adhering to 19 as the age of eligibility to
purchase 3.2% beer, however, was not enough to qualify as
coercion, the Court concluded.
This case does not present the concerns that led the
Court in Dole even to consider the prospect of coercion. In
Dole, the condition—set 21 as the minimum drinking age—
did not tell the States how to use funds Congress pro-
vided for highway construction. Further, in view of the
Twenty-First Amendment, it was an open question whether
Congress could directly impose a national minimum
drinking age.
The ACA, in contrast, relates solely to the federally
funded Medicaid program; if States choose not to comply,
Congress has not threatened to withhold funds earmarked
for any other program. Nor does the ACA use Medicaid
funding to induce States to take action Congress itself
could not undertake. The Federal Government undoubt
edly could operate its own health-care program for poor
persons, just as it operates Medicare for seniors’ health
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care. See supra, at 44.
That is what makes this such a simple case, and the
Court’s decision so unsettling. Congress, aiming to assist
the needy, has appropriated federal money to subsidize
state health-insurance programs that meet federal stand
ards. The principal standard the ACA sets is that the
state program cover adults earning no more than 133% of
the federal poverty line. Enforcing that prescription en
sures that federal funds will be spent on health care for
the poor in furtherance of Congress’ present perception of
the general welfare.
C
THE CHIEF JUSTICE asserts that the Medicaid expan
sion creates a “new health care program.” Ante, at 54.
Moreover, States could “hardly anticipate” that Congress
would “transform [the program] so dramatically.” Ante,
at 55. Therefore, THE CHIEF JUSTICE maintains, Congress’
threat to withhold “old” Medicaid funds based on a State’s
refusal to participate in the “new” program is a “threa[t] to
terminate [an]other . . . independent gran[t].” Ante, at 50,
52–53. And because the threat to withhold a large amount
of funds from one program “leaves the States with no real
option but to acquiesce [in a newly created program],” THE
CHIEF JUSTICE concludes, the Medicaid expansion is un
constitutionally coercive. Ante, at 52.
1
The starting premise on which THE CHIEF JUSTICE’s
coercion analysis rests is that the ACA did not really
“extend” Medicaid; instead, Congress created an entirely
new program to co-exist with the old. THE CHIEF JUSTICE
calls the ACA new, but in truth, it simply reaches more of
America’s poor than Congress originally covered.
Medicaid was created to enable States to provide medi
cal assistance to “needy persons.” See S. Rep. No. 404,
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89th Cong., 1st Sess., pt. 1, p. 9 (1965). See also §121(a),
79 Stat. 343 (The purpose of Medicaid is to enable States
“to furnish . . . medical assistance on behalf of [certain
persons] whose income and resources are insufficient to
meet the costs of necessary medical services.”). By bring
ing health care within the reach of a larger population of
Americans unable to afford it, the Medicaid expansion is
an extension of that basic aim.
The Medicaid Act contains hundreds of provisions gov
erning operation of the program, setting conditions rang
ing from “Limitation on payments to States for expend-
itures attributable to taxes,” 42 U. S. C. §1396a(t) (2006
ed.), to “Medical assistance to aliens not lawfully admitted
for permanent residence,” §1396b(v) (2006 ed. and Supp.
IV). The Medicaid expansion leaves unchanged the vast
majority of these provisions; it adds beneficiaries to the
existing program and specifies the rate at which States
will be reimbursed for services provided to the added bene-
ficiaries. See ACA §§2001(a)(1), (3), 124 Stat. 271–272.
The ACA does not describe operational aspects of the
program for these newly eligible persons; for that infor
mation, one must read the existing Medicaid Act. See 42
U. S. C. §§1396–1396v(b) (2006 ed. and Supp. IV).
Congress styled and clearly viewed the Medicaid expan
sion as an amendment to the Medicaid Act, not as a “new”
health-care program. To the four categories of beneficiar
ies for whom coverage became mandatory in 1965, and the
three mandatory classes added in the late 1980’s, see
supra, at 41–42, the ACA adds an eighth: individuals
under 65 with incomes not exceeding 133% of the federal
poverty level. The expansion is effectuated by §2001 of the
ACA, aptly titled: “Medicaid Coverage for the Lowest
Income Populations.” 124 Stat. 271. That section amends
Title 42, Chapter 7, Subchapter XIX: Grants to States for
Medical Assistance Programs. Commonly known as the
Medicaid Act, Subchapter XIX filled some 278 pages in
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2006. Section 2001 of the ACA would add approximately
three pages.19
Congress has broad authority to construct or adjust
spending programs to meet its contemporary understand
ing of “the general Welfare.” Helvering v. Davis, 301 U. S.
619, 640–641 (1937). Courts owe a large measure of re
spect to Congress’ characterization of the grant programs
it establishes. See Steward Machine, 301 U. S., at 594.
Even if courts were inclined to second-guess Congress’
conception of the character of its legislation, how would
reviewing judges divine whether an Act of Congress, pur
porting to amend a law, is in reality not an amendment,
but a new creation? At what point does an extension
become so large that it “transforms” the basic law?
Endeavoring to show that Congress created a new pro
gram, THE CHIEF JUSTICE cites three aspects of the ex
pansion. First, he asserts that, in covering those earning
no more than 133% of the federal poverty line, the Medi
caid expansion, unlike pre-ACA Medicaid, does not “care
for the neediest among us.” Ante, at 53. What makes
that so? Single adults earning no more than $14,856 per
year—133% of the current federal poverty level—surely
rank among the Nation’s poor.
Second, according to THE CHIEF JUSTICE, “Congress
mandated that newly eligible persons receive a level of
coverage that is less comprehensive than the traditional
Medicaid benefit package.” Ibid. That less comprehensive
benefit package, however, is not an innovation introduced
by the ACA; since 2006, States have been free to use it for
many of their Medicaid beneficiaries.20 The level of bene
——————
19
Compare Subchapter XIX, 42 U. S. C. §§1396–1396v(b) (2006 ed.
and Supp. IV) with §§1396a(a) (10)(A)(i)(VIII) (2006 ed. and Supp.
IV); 1396a(a) (10)(A)(ii)(XX), 1396a(a)(75), 1396a(k), 1396a(gg) to (hh),
1396d(y), 1396r–1(e), 1396u–7(b)(5) to (6).
20
The Deficit Reduction Act of 2005 authorized States to provide
“benchmark coverage” or “benchmark equivalent coverage” to certain
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fits offered therefore does not set apart post-ACA Medicaid
recipients from all those entitled to benefits pre-ACA.
Third, THE CHIEF JUSTICE correctly notes that the
reimbursement rate for participating States is differ
ent regarding individuals who became Medicaid-eligible
through the ACA. Ibid. But the rate differs only in its
generosity to participating States. Under pre-ACA Medi
caid, the Federal Government pays up to 83% of the costs
of coverage for current enrollees, §1396d(b) (2006 ed. and
Supp. IV); under the ACA, the federal contribution starts
at 100% and will eventually settle at 90%, §1396d(y).
Even if one agreed that a change of as little as 7 percent
age points carries constitutional significance, is it not
passing strange to suggest that the purported incursion on
state sovereignty might have been averted, or at least
mitigated, had Congress offered States less money to carry
out the same obligations?
Consider also that Congress could have repealed Medi
caid. See supra, at 38–39 (citing 42 U. S. C. §1304); Brief
for Petitioners in No. 11–400, p. 41. Thereafter, Congress
could have enacted Medicaid II, a new program combin
ing the pre-2010 coverage with the expanded coverage
required by the ACA. By what right does a court stop
Congress from building up without first tearing down?
2
THE CHIEF JUSTICE finds the Medicaid expansion vul
nerable because it took participating States by surprise.
Ante, at 54. “A State could hardly anticipate that Con
gres[s]” would endeavor to “transform [the Medicaid pro
gram] so dramatically,” he states. Ante, at 54–55. For the
notion that States must be able to foresee, when they sign
up, alterations Congress might make later on, THE CHIEF
——————
Medicaid populations. See §6044, 120 Stat. 88, 42 U. S. C. §1396u–7
(2006 ed. and Supp. IV). States may offer the same level of coverage to
persons newly eligible under the ACA. See §1396a(k).
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JUSTICE cites only one case: Pennhurst State School and
Hospital v. Halderman, 451 U. S. 1.
In
Pennhurst, residents of a state-run, federally funded
institution for the mentally disabled complained of abu
sive treatment and inhumane conditions in alleged viola
tion of the Developmentally Disabled Assistance and Bill
of Rights Act. 451 U. S., at 5–6. We held that the State
was not answerable in damages for violating conditions
it did not “voluntarily and knowingly accep[t].” Id., at 17,
27. Inspecting the statutory language and legislative his
tory, we found that the Act did not “unambiguously” im
pose the requirement on which the plaintiffs relied: that
they receive appropriate treatment in the least restrictive
environment. Id., at 17–18. Satisfied that Congress had
not clearly conditioned the States’ receipt of federal funds
on the States’ provision of such treatment, we declined to
read such a requirement into the Act. Congress’ spending
power, we concluded, “does not include surprising partici
pating States with postacceptance or ‘retroactive’ condi
tions.” Id., at 24–25.
Pennhurst thus instructs that “if Congress intends to
impose a condition on the grant of federal moneys, it must
do so unambiguously.” Ante, at 53 (quoting Pennhurst,
451 U. S., at 17). That requirement is met in this case.
Section 2001 does not take effect until 2014. The ACA
makes perfectly clear what will be required of States that
accept Medicaid funding after that date: They must extend
eligibility to adults with incomes no more than 133% of
the federal poverty line. See 42 U. S. C. §1396a(a)(10)(A)
(i)(VIII) (2006 ed. and Supp. IV).
THE CHIEF JUSTICE appears to find in Pennhurst a
requirement that, when spending legislation is first
passed, or when States first enlist in the federal program,
Congress must provide clear notice of conditions it might
later impose. If I understand his point correctly, it was
incumbent on Congress, in 1965, to warn the States clearly
53
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Opinion of GINSBURG, J.
of the size and shape potential changes to Medicaid might
take. And absent such notice, sizable changes could not be
made mandatory. Our decisions do not support such a
requirement.21\\
In Bennett v. New Jersey, 470 U. S. 632 (1985), the
Secretary of Education sought to recoup Title I funds22
based on the State’s noncompliance, from 1970 to 1972,
with a 1978 amendment to Title I. Relying on Pennhurst,
we rejected the Secretary’s attempt to recover funds based
on the States’ alleged violation of a rule that did not exist
when the State accepted and spent the funds. See 470
U. S., at 640 (“New Jersey[,] when it applied for and re
ceived Title I funds for the years 1970–1972[,] had no
basis to believe that the propriety of the expenditures
would be judged by any standards other than the ones in
effect at the time.” (citing Pennhurst, 451 U. S., at 17, 24–
25; emphasis added)).
When amendment of an existing grant program has no
such retroactive effect, however, we have upheld Congress’
instruction. In Bennett v. Kentucky Dept. of Ed., 470 U. S.
656 (1985), the Secretary sued to recapture Title I funds
based on the Commonwealth’s 1974 violation of a spend
ing condition Congress added to Title I in 1970. Rejecting
Kentucky’s argument pinned to Pennhurst, we held that
——————
21
THE CHIEF JUSTICE observes that “Spending Clause legislation
[i]s much in the nature of a contract.” Ante, at 46 (internal quotation
marks omitted). See also post, at 33 (joint opinion of SCALIA, KENNEDY,
THOMAS, and ALITO, JJ.) (same). But the Court previously has rec-
ognized that “[u]nlike normal contractual undertakings, federal grant
programs originate in and remain governed by statutory provisions
expressing the judgment of Congress concerning desirable public
policy.” Bennett v. Kentucky Dept. of Ed., 470 U. S. 656, 669 (1985).
22
Title I of the Elementary and Secondary Education Act of 1965
provided federal grants to finance supplemental educational programs
in school districts with high concentrations of children from low-income
families. See Bennett v. New Jersey, 470 U. S. 632, 634–635 (1985)
(citing Pub. L. No. 89–10, 79 Stat. 27).
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Opinion of GINSBURG, J.
the Commonwealth suffered no surprise after accepting
the federal funds. Kentucky was therefore obliged to re-
turn the money. 470 U. S., at 665–666, 673–674. The
conditions imposed were to be assessed as of 1974, in light
of “the legal requirements in place when the grants were
made,” id., at 670, not as of 1965, when Title I was origi
nally enacted.
As these decisions show, Pennhurst’s rule demands that
conditions on federal funds be unambiguously clear at the
time a State receives and uses the money—not at the time,
perhaps years earlier, when Congress passed the law
establishing the program. See also Dole, 483 U. S., at 208
(finding Pennhurst satisfied based on the clarity of the
Federal Aid Highway Act as amended in 1984, without
looking back to 1956, the year of the Act’s adoption).
In any event, from the start, the Medicaid Act put
States on notice that the program could be changed: “The
right to alter, amend, or repeal any provision of [Medi
caid],” the statute has read since 1965, “is hereby reserved
to the Congress.” 42 U. S. C. §1304. The “effect of these
few simple words” has long been settled. See National
Railroad Passenger Corporation v. Atchison, T. & S. F. R.
Co., 470 U. S. 451, 467–468, n. 22 (1985) (citing Sinking
Fund Cases, 99 U. S. 700, 720 (1879)). By reserving the
right to “alter, amend, [or] repeal” a spending program,
Congress “has given special notice of its intention to retain
. . . full and complete power to make such alterations and
amendments . . . as come within the just scope of legisla
tive power.” Id., at 720.
Our decision in Bowen v. Public Agencies Opposed to
Social Security Entrapment, 477 U. S. 41, 51–52 (1986), is
guiding here. As enacted in 1935, the Social Security Act
did not cover state employees. Id., at 44. In response to
pressure from States that wanted coverage for their em
ployees, Congress, in 1950, amended the Act to allow
States to opt into the program. Id., at 45. The statutory
55
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Opinion of GINSBURG, J.
provision giving States this option expressly permitted
them to withdraw from the program. Ibid.
Beginning in the late 1970’s, States increasingly exer
cised the option to withdraw. Id., at 46. Concerned that
withdrawals were threatening the integrity of Social
Security, Congress repealed the termination provision.
Congress thereby changed Social Security from a program
voluntary for the States to one from which they could not
escape. Id., at 48. California objected, arguing that the
change impermissibly deprived it of a right to withdraw
from Social Security. Id., at 49–50. We unanimously
rejected California’s argument. Id., at 51–53. By includ
ing in the Act “a clause expressly reserving to it ‘[t]he
right to alter, amend, or repeal any provision’ of the Act,”
we held, Congress put States on notice that the Act
“created no contractual rights.” Id., at 51–52. The States
therefore had no law-based ground on which to complain
about the amendment, despite the significant character of
the change.
THE CHIEF JUSTICE nevertheless would rewrite §1304
to countenance only the “right to alter somewhat,” or
“amend, but not too much.” Congress, however, did not so
qualify §1304. Indeed, Congress retained discretion to
“repeal” Medicaid, wiping it out entirely. Cf. Delta Air
Lines, Inc. v. August, 450 U. S. 346, 368 (1981) (Rehnquist,
J., dissenting) (invoking “the common-sense maxim that
the greater includes the lesser”). As Bowen indicates, no
State could reasonably have read §1304 as reserving to
Congress authority to make adjustments only if modestly
sized.
In fact, no State proceeded on that understanding. In com
pliance with Medicaid regulations, each State expressly
undertook to abide by future Medicaid changes. See 42
CFR §430.12©(1) (2011) (“The [state Medicaid] plan must
provide that it will be amended whenever necessary to
reflect . . . [c]hanges in Federal law, regulations, policy
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interpretations, or court decisions.”). Whenever a State
notifies the Federal Government of a change in its own
Medicaid program, the State certifies both that it knows
the federally set terms of participation may change, and
that it will abide by those changes as a condition of con
tinued participation. See, e.g., Florida Agency for Health
Care Admin., State Plan Under Title XIX of the Social
Security Act Medical Assistance Program §7.1, p. 86 (Oct.
6, 1992).
THE CHIEF JUSTICE insists that the most recent expan
sion, in contrast to its predecessors, “accomplishes a shift
in kind, not merely degree.” Ante, at 53. But why was
Medicaid altered only in degree, not in kind, when Con
gress required States to cover millions of children and
pregnant women? See supra, at 41–42. Congress did not
“merely alte[r] and expan[d] the boundaries of ” the Aid to
Families with Dependent Children program. But see ante,
at 53–55. Rather, Congress required participating States
to provide coverage tied to the federal poverty level (as it
later did in the ACA), rather than to the AFDC program.
See Brief for National Health Law Program et al. as Amici
Curiae 16–18. In short, given §1304, this Court’s con
struction of §1304’s language in Bowen, and the enlarge
ment of Medicaid in the years since 1965,23 a State would
be hard put to complain that it lacked fair notice when,
in 2010, Congress altered Medicaid to embrace a larger
portion of the Nation’s poor.
3
THE CHIEF JUSTICE ultimately asks whether “the finan
——————
23
Note, in this regard, the extension of Social Security, which began
in 1935 as an old-age pension program, then expanded to include sur-
vivor benefits in 1939 and disability benefits in 1956. See Social
Security Act, ch. 531, 49 Stat. 622–625; Social Security Act Amend
ments of 1939, 53 Stat. 1364–1365; Social Security Amendments of
1956, ch. 836, §103, 70 Stat. 815–816.
57
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Opinion of GINSBURG, J.
cial inducement offered by Congress . . . pass[ed] the point
at which pressure turns into compulsion.” Ante, at 50
(internal quotation marks omitted). The financial in
ducement Congress employed here, he concludes, crosses
that threshold: The threatened withholding of “existing
Medicaid funds” is “a gun to the head” that forces States to
acquiesce. Ante, at 50–51 (citing 42 U. S. C. §1396c).24
THE CHIEF JUSTICE sees no need to “fix the outermost
line,” Steward Machine, 301 U. S., at 591, “where persua
sion gives way to coercion,” ante, at 55. Neither do the
joint dissenters. See post, at 36, 38.25 Notably, the deci
——————
24
The joint dissenters, for their part, would make this the entire in
quiry. “[I]f States really have no choice other than to accept the pack
age,” they assert, “the offer is coercive.” Post, at 35. THE CHIEF JUSTICE
recognizes Congress’ authority to construct a single federal program
and “condition the receipt of funds on the States’ complying with
restrictions on the use of those funds.” Ante, at 50. For the joint
dissenters, however, all that matters, it appears, is whether States can
resist the temptation of a given federal grant. Post, at 35. On this
logic, any federal spending program, sufficiently large and well-funded,
would be unconstitutional. The joint dissenters point to smaller pro
grams States might have the will to refuse. See post, at 40–41 (elemen
tary and secondary education). But how is a court to judge whether
“only 6.6% of all state expenditures,” post, at 41, is an amount States
could or would do without?
Speculations of this genre are characteristic of the joint dissent. See,
e.g., post, at 35 (“it may be state officials who will bear the brunt of
public disapproval” for joint federal-state endeavors); ibid., (“federal
officials . . . may remain insulated from the electoral ramifications of
their decision”); post, at 37 (“a heavy federal tax . . . levied to support a
federal program that offers large grants to the States . . . may, as a
practical matter, [leave States] unable to refuse to participate”); ibid.
(withdrawal from a federal program “would likely force the State to
impose a huge tax increase”); post, at 46 (state share of ACA expansion
costs “may increase in the future”) (all emphasis added; some internal
quotation marks omitted). The joint dissenters are long on conjecture
and short on real-world examples.
25
The joint dissenters also rely heavily on Congress’ perceived intent
to coerce the States. Post, at 42–46; see, e.g., post, at 42 (“In crafting the
ACA, Congress clearly expressed its informed view that no State could
58
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Opinion of GINSBURG, J.
sion on which they rely, Steward Machine, found the
statute at issue inside the line, “wherever the line may
be.” 301 U. S., at 591.
When future Spending Clause challenges arrive, as they
likely will in the wake of today’s decision, how will liti
gants and judges assess whether “a State has a legitimate
choice whether to accept the federal conditions in ex
change for federal funds”? Ante, at 48. Are courts to
measure the number of dollars the Federal Government
might withhold for noncompliance? The portion of the
State’s budget at stake? And which State’s—or States’—
budget is determinative: the lead plaintiff, all challenging
States (26 in this case, many with quite different fiscal
situations), or some national median? Does it matter that
Florida, unlike most States, imposes no state income tax,
and therefore might be able to replace foregone federal
funds with new state revenue?26 Or that the coercion state
——————
possibly refuse the offer that the ACA extends.”). We should not lightly
ascribe to Congress an intent to violate the Constitution (at least as my
colleagues read it). This is particularly true when the ACA could just
as well be comprehended as demonstrating Congress’ mere expectation,
in light of the uniformity of past participation and the generosity of the
federal contribution, that States would not withdraw. Cf. South Dakota
v. Dole, 483 U. S. 203, 211 (1987) (“We cannot conclude . . . that a con
ditional grant of federal money . . . is unconstitutional simply by
reason of its success in achieving the congressional objective.”).
26
Federal taxation of a State’s citizens, according to the joint dissent
ers, may diminish a State’s ability to raise new revenue. This, in turn,
could limit a State’s capacity to replace a federal program with an
“equivalent” state-funded analog. Post, at 40. But it cannot be true
that “the amount of the federal taxes extracted from the taxpayers of a
State to pay for the program in question is relevant in determining
whether there is impermissible coercion.” Post, at 37. When the
United States Government taxes United States citizens, it taxes them
“in their individual capacities” as “the people of America”—not as
residents of a particular State. See U. S. Term Limits, Inc. v. Thornton,
514 U. S. 779, 839 (1995) (KENNEDY, J., concurring). That is because
the “Framers split the atom of sovereignty[,] . . . establishing two orders
of government”—“one state and one federal”—“each with its own direct
59
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officials in fact fear is punishment at the ballot box for
turning down a politically popular federal grant?
The coercion inquiry, therefore, appears to involve polit-
ical judgments that defy judicial calculation. See Baker
v. Carr, 369 U. S. 186, 217 (1962). Even commentators
sympathetic to robust enforcement of Dole’s limitations,
see supra, at 46, have concluded that conceptions of
“impermissible coercion” premised on States’ perceived
inability to decline federal funds “are just too amorphous
to be judicially administrable.” Baker & Berman, Getting
off the Dole, 78 Ind. L. J. 459, 521, 522, n. 307 (2003)
(citing, e.g., Scalia, The Rule of Law as a Law of Rules, 56
U. Chi. L. Rev. 1175 (1989)).
At bottom, my colleagues’ position is that the States’
reliance on federal funds limits Congress’ authority to
alter its spending programs. This gets things backwards:
Congress, not the States, is tasked with spending federal
money in service of the general welfare. And each succes
sive Congress is empowered to appropriate funds as it sees
fit. When the 110th Congress reached a conclusion about
Medicaid funds that differed from its predecessors’ view,
it abridged no State’s right to “existing,” or “pre-existing,”
funds. But see ante, at 51–52; post, at 47–48 (joint opinion
of SCALIA, KENNEDY, THOMAS, and ALITO, JJ.). For, in
——————
relationship” to the people. Id., at 838.
A State therefore has no claim on the money its residents pay in
federal taxes, and federal “spending programs need not help people in
all states in the same measure.” See Brief for David Satcher et al. as
Amici Curiae 19. In 2004, for example, New Jersey received 55 cents
in federal spending for every dollar its residents paid to the Federal
Government in taxes, while Mississippi received $1.77 per tax dollar
paid. C. Dubay, Tax Foundation, Federal Tax Burdens and Expendi
tures by State: Which States Gain Most from Federal Fiscal Opera
tions? 2 (Mar. 2006). Thus no constitutional problem was created when
Arizona declined for 16 years to participate in Medicaid, even though
its residents’ tax dollars financed Medicaid programs in every other
State.
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Opinion of GINSBURG, J.
fact, there are no such funds. There is only money States
anticipate receiving from future Congresses.
D
Congress has delegated to the Secretary of Health and
Human Services the authority to withhold, in whole or
in part, federal Medicaid funds from States that fail to
comply with the Medicaid Act as originally composed and as
subsequently amended. 42 U. S. C. §1396c.27 THE CHIEF
JUSTICE, however, holds that the Constitution precludes
the Secretary from withholding “existing” Medicaid funds
based on States’ refusal to comply with the expanded Medi
caid program. Ante, at 55. For the foregoing reasons, I
disagree that any such withholding would violate the
Spending Clause. Accordingly, I would affirm the decision
of the Court of Appeals for the Eleventh Circuit in this
regard.
But in view of THE CHIEF JUSTICE’s disposition, I agree
with him that the Medicaid Act’s severability clause de
termines the appropriate remedy. That clause provides
that “[i]f any provision of [the Medicaid Act], or the appli
cation thereof to any person or circumstance, is held in-
valid, the remainder of the chapter, and the application of
such provision to other persons or circumstances shall not
be affected thereby.” 42 U. S. C. §1303.
The Court does not strike down any provision of the
——————
27
As THE CHIEF JUSTICE observes, the Secretary is authorized to
withhold all of a State’s Medicaid funding. See ante, at 51. But total
withdrawal is what the Secretary may, not must, do. She has discre
tion to withhold only a portion of the Medicaid funds otherwise due a
noncompliant State. See §1396c; cf. 45 CFR §80.10(f) (2011) (Secretary
may enforce Title VI’s nondiscrimination requirement through “refusal
to grant or continue Federal financial assistance, in whole or in part.”
(emphasis added)). The Secretary, it is worth noting, may herself
experience political pressures, which would make her all the more
reluctant to cut off funds Congress has appropriated for a State’s needy
citizens.
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ACA. It prohibits only the “application” of the Secretary’s
authority to withhold Medicaid funds from States that
decline to conform their Medicaid plans to the ACA’s
requirements. Thus the ACA’s authorization of funds to
finance the expansion remains intact, and the Secretary’s
authority to withhold funds for reasons other than non
compliance with the expansion remains unaffected.
Even absent §1303’s command, we would have no war
rant to invalidate the Medicaid expansion, contra post, at
46–48 (joint opinion of SCALIA, KENNEDY, THOMAS, and
ALITO, JJ.), not to mention the entire ACA, post, at 49–64
(same). For when a court confronts an unconstitutional
statute, its endeavor must be to conserve, not destroy,
the legislature’s dominant objective. See, e.g., Ayotte v.
Planned Parenthood of Northern New Eng., 546 U. S. 320,
328–330 (2006). In this case, that objective was to in
crease access to health care for the poor by increasing the
States’ access to federal funds. THE CHIEF JUSTICE is
undoubtedly right to conclude that Congress may offer
States funds “to expand the availability of health care, and
requir[e] that States accepting such funds comply with the
conditions on their use.” Ante, at 55. I therefore concur
in the judgment with respect to Part IV–B of THE CHIEF
JUSTICE’s opinion.
* * *
For the reasons stated, I agree with THE CHIEF JUSTICE
that, as to the validity of the minimum coverage provi
sion, the judgment of the Court of Appeals for the Eleventh
Circuit should be reversed. In my view, the provision en-
counters no constitutional obstruction. Further, I would
uphold the Eleventh Circuit’s decision that the Medicaid
expansion is within Congress’ spending power.
_________________
_________________
1
Cite as: 567 U. S. ____ (2012)
SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
SUPREME COURT OF THE UNITED STATES
Nos. 11–393, 11–398 and 11–400
NATIONAL FEDERATION OF INDEPENDENT
BUSINESS, ET AL., PETITIONERS
11–393
v.
KATHLEEN SEBELIUS, SECRETARY OF HEALTH
AND HUMAN SERVICES, ET AL.
DEPARTMENT OF HEALTH AND HUMAN
SERVICES, ET AL., PETITIONERS
11–398
v.
FLORIDA ET AL.
11–400
FLORIDA, ET AL., PETITIONERS
v.
DEPARTMENT OF HEALTH AND
HUMAN SERVICES ET AL.
ON WRITS OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE ELEVENTH CIRCUIT
[June 28, 2012]
JUSTICE SCALIA, JUSTICE KENNEDY, JUSTICE THOMAS,
and JUSTICE ALITO, dissenting.
Congress has set out to remedy the problem that the
best health care is beyond the reach of many Americans
who cannot afford it. It can assuredly do that, by exercis-
ing the powers accorded to it under the Constitution. The
question in this case, however, is whether the complex
structures and provisions of the Patient Protection and
Affordable Care Act (Affordable Care Act or ACA) go be-
yond those powers. We conclude that they do.
This case is in one respect difficult: it presents two
2
NATIONAL FEDERATION OF INDEPENDENT
BUSINESS
v. SEBELIUS
SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
questions of first impression. The first of those is whether
failure to engage in economic activity (the purchase of
health insurance) is subject to regulation under the Com-
merce Clause. Failure to act does result in an effect
on commerce, and hence might be said to come under
this Court’s “affecting commerce” criterion of Commerce
Clause jurisprudence. But in none of its decisions has this
Court extended the Clause that far. The second question
is whether the congressional power to tax and spend,
U. S. Const., Art. I, §8, cl. 1, permits the conditioning of
a State’s continued receipt of all funds under a massive
state-administered federal welfare program upon its ac-
ceptance of an expansion to that program. Several of our
opinions have suggested that the power to tax and spend
cannot be used to coerce state administration of a federal
program, but we have never found a law enacted under
the spending power to be coercive. Those questions are
difficult.
The case is easy and straightforward, however, in an-
other respect. What is absolutely clear, affirmed by the
text of the 1789 Constitution, by the Tenth Amendment
ratified in 1791, and by innumerable cases of ours in the
220 years since, is that there are structural limits upon
federal power—upon what it can prescribe with respect to
private conduct, and upon what it can impose upon the
sovereign States. Whatever may be the conceptual limits
upon the Commerce Clause and upon the power to tax
and spend, they cannot be such as will enable the Federal
Government to regulate all private conduct and to com-
pel the States to function as administrators of federal
programs.
That clear principle carries the day here. The striking
case of Wickard v. Filburn, 317 U. S. 111 (1942), which
held that the economic activity of growing wheat, even
for one’s own consumption, affected commerce sufficiently
that it could be regulated, always has been regarded as
3
Cite as: 567 U. S. ____ (2012)
SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
the ne plus ultra of expansive Commerce Clause jurispru-
dence. To go beyond that, and to say the failure to grow
wheat (which is not an economic activity, or any activity
at all) nonetheless affects commerce and therefore can be
federally regulated, is to make mere breathing in and out
the basis for federal prescription and to extend federal
power to virtually all human activity.
As for the constitutional power to tax and spend for
the general welfare: The Court has long since expanded
that beyond (what Madison thought it meant) taxing and
spending for those aspects of the general welfare that were
within the Federal Government’s enumerated powers,
see United States v. Butler, 297 U. S. 1, 65–66 (1936).
Thus, we now have sizable federal Departments devoted
to subjects not mentioned among Congress’ enumerated
powers, and only marginally related to commerce: the De-
partment of Education, the Department of Health and
Human Services, the Department of Housing and Urban
Development. The principal practical obstacle that pre-
vents Congress from using the tax-and-spend power to
assume all the general-welfare responsibilities tradition-
ally exercised by the States is the sheer impossibility of
managing a Federal Government large enough to adminis-
ter such a system. That obstacle can be overcome by
granting funds to the States, allowing them to administer
the program. That is fair and constitutional enough when
the States freely agree to have their powers employed and
their employees enlisted in the federal scheme. But it is a
blatant violation of the constitutional structure when the
States have no choice.
The Act before us here exceeds federal power both in
mandating the purchase of health insurance and in deny-
ing nonconsenting States all Medicaid funding. These
parts of the Act are central to its design and operation,
and all the Act’s other provisions would not have been
enacted without them. In our view it must follow that the
4
NATIONAL FEDERATION OF INDEPENDENT
BUSINESS
v. SEBELIUS
SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
entire statute is inoperative.
I
The Individual Mandate
Article I, §8, of the Constitution gives Congress the
power to “regulate Commerce . . . among the several
States.” The Individual Mandate in the Act commands
that every “applicable individual shall for each month
beginning after 2013 ensure that the individual, and any
dependent of the individual who is an applicable individ-
ual, is covered under minimum essential coverage.” 26
U. S. C. §5000A(a) (2006 ed., Supp. IV). If this provision
“regulates” anything, it is the failure to maintain mini-
mum essential coverage. One might argue that it regu-
lates that failure by requiring it to be accompanied by
payment of a penalty. But that failure—that abstention
from commerce—is not “Commerce.” To be sure, purchas-
ing insurance is ”Commerce”; but one does not regulate
commerce that does not exist by compelling its existence.
In Gibbons v. Ogden, 9 Wheat. 1, 196 (1824), Chief
Justice Marshall wrote that the power to regulate com-
merce is the power “to prescribe the rule by which
commerce is to be governed.” That understanding is con-
sistent with the original meaning of “regulate” at the time
of the Constitution’s ratification, when “to regulate” meant
“[t]o adjust by rule, method or established mode,” 2 N.
Webster, An American Dictionary of the English Lan-
guage (1828); “[t]o adjust by rule or method,” 2 S. Johnson,
A Dictionary of the English Language (7th ed. 1785); “[t]o
adjust, to direct according to rule,” 2 J. Ash, New and
Complete Dictionary of the English Language (1775); “to
put in order, set to rights, govern or keep in order,” T.
Dyche & W. Pardon, A New General English Dictionary
5
Cite as: 567 U. S. ____ (2012)
SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
(16th ed. 1777).1 It can mean to direct the manner of
something but not to direct that something come into
being. There is no instance in which this Court or Con-
gress (or anyone else, to our knowledge) has used “regulate”
in that peculiar fashion. If the word bore that meaning,
Congress’ authority “[t]o make Rules for the Govern-
ment and Regulation of the land and naval Forces,” U. S.
Const., Art. I, §8, cl. 14, would have made superfluous
the later provision for authority “[t]o raise and support
Armies,” id., §8, cl. 12, and “[t]o provide and maintain a
Navy,” id., §8, cl. 13.
We do not doubt that the buying and selling of health
insurance contracts is commerce generally subject to
federal regulation. But when Congress provides that
(nearly) all citizens must buy an insurance contract, it
goes beyond “adjust[ing] by rule or method,” Johnson,
supra, or “direct[ing] according to rule,” Ash, supra; it
directs the creation of commerce.
In response, the Government offers two theories as to
why the Individual Mandate is nevertheless constitu-
tional. Neither theory suffices to sustain its validity.
A
First, the Government submits that §5000A is “integral
to the Affordable Care Act’s insurance reforms” and “nec-
essary to make effective the Act’s core reforms.” Brief
for Petitioners in No. 11–398 (Minimum Coverage Provi-
sion) 24 (hereinafter Petitioners’ Minimum Coverage Brief).
Congress included a “finding” to similar effect in the Act
——————
1
The most authoritative legal dictionaries of the founding era lack
any definition for “regulate” or “regulation,” suggesting that the term
bears its ordinary meaning (rather than some specialized legal mean-
ing) in the constitutional text. See R. Burn, A New Law Dictionary 281
(1792); G. Jacob, A New Law Dictionary (10th ed. 1782); 2 T. Cunning-
ham, A New and Complete Law Dictionary (2d ed. 1771).
6
NATIONAL FEDERATION OF INDEPENDENT
BUSINESS
v. SEBELIUS
SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
itself. See 42 U. S. C. §18091(2)(H).
As discussed in more detail in Part V, infra, the Act
contains numerous health insurance reforms, but most
notable for present purposes are the “guaranteed issue”
and “community rating” provisions, §§300gg to 300gg–4.
The former provides that, with a few exceptions, “each
health insurance issuer that offers health insurance cov-
erage in the individual or group market in a State must
accept every employer and individual in the State that
applies for such coverage.” §300gg–1(a). That is, an in-
surer may not deny coverage on the basis of, among other
things, any pre-existing medical condition that the appli-
cant may have, and the resulting insurance must cover
that condition. See §300gg–3.
Under ordinary circumstances, of course, insurers would
respond by charging high premiums to individuals with
pre-existing conditions. The Act seeks to prevent this
through the community-rating provision. Simply put, the
community-rating provision requires insurers to calculate
an individual’s insurance premium based on only four
factors: (i) whether the individual’s plan covers just
the individual or his family also, (ii) the “rating area” in
which the individual lives, (iii) the individual’s age, and
(iv) whether the individual uses tobacco. §300gg(a)(1)(A).
Aside from the rough proxies of age and tobacco use (and
possibly rating area), the Act does not allow an insurer to
factor the individual’s health characteristics into the price
of his insurance premium. This creates a new incentive
for young and healthy individuals without pre-existing
conditions. The insurance premiums for those in this
group will not reflect their own low actuarial risks but will
subsidize insurance for others in the pool. Many of them
may decide that purchasing health insurance is not an eco-
nomically sound decision—especially since the guaranteed-
issue provision will enable them to purchase it at the
same cost in later years and even if they have developed a
7
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SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
pre-existing condition. But without the contribution of
above-risk premiums from the young and healthy, the
community-rating provision will not enable insurers to
take on high-risk individuals without a massive increase
in premiums.
The Government presents the Individual Mandate as a
unique feature of a complicated regulatory scheme govern-
ing many parties with countervailing incentives that must
be carefully balanced. Congress has imposed an extensive
set of regulations on the health insurance industry, and
compliance with those regulations will likely cost the in-
dustry a great deal. If the industry does not respond by
increasing premiums, it is not likely to survive. And if
the industry does increase premiums, then there is a seri-
ous risk that its products—insurance plans—will become
economically undesirable for many and prohibitively ex-
pensive for the rest.
This is not a dilemma unique to regulation of the health-
insurance industry. Government regulation typically
imposes costs on the regulated industry—especially regu-
lation that prohibits economic behavior in which most
market participants are already engaging, such as “piec-
ing out” the market by selling the product to different
classes of people at different prices (in the present context,
providing much lower insurance rates to young and
healthy buyers). And many industries so regulated face
the reality that, without an artificial increase in demand,
they cannot continue on. When Congress is regulating
these industries directly, it enjoys the broad power to
enact “ ‘all appropriate legislation’ ” to “ ‘protec[t]’ ” and
“ ‘advanc[e]’ ” commerce, NLRB v. Jones & Laughlin Steel
Corp., 301 U. S. 1, 36–37 (1937) (quoting The Daniel Ball,
10 Wall. 557, 564 (1871)). Thus, Congress might protect
the imperiled industry by prohibiting low-cost competition,
or by according it preferential tax treatment, or even by
granting it a direct subsidy.
8
NATIONAL FEDERATION OF INDEPENDENT
BUSINESS
v. SEBELIUS
SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
Here, however, Congress has impressed into service
third parties, healthy individuals who could be but are not
customers of the relevant industry, to offset the undesir-
able consequences of the regulation. Congress’ desire to
force these individuals to purchase insurance is motivated
by the fact that they are further removed from the market
than unhealthy individuals with pre-existing conditions,
because they are less likely to need extensive care in
the near future. If Congress can reach out and command
even those furthest removed from an interstate market to
participate in the market, then the Commerce Clause
becomes a font of unlimited power, or in Hamilton’s words,
“the hideous monster whose devouring jaws . . . spare
neither sex nor age, nor high nor low, nor sacred nor pro-
fane.” The Federalist No. 33, p. 202 (C. Rossiter ed. 1961).
At the outer edge of the commerce power, this Court has
insisted on careful scrutiny of regulations that do not
act directly on an interstate market or its participants. In
New York v. United States, 505 U. S. 144 (1992), we held
that Congress could not, in an effort to regulate the dis-
posal of radioactive waste produced in several different
industries, order the States to take title to that waste.
Id., at 174–177. In Printz v. United States, 521 U. S.
898 (1997), we held that Congress could not, in an effort to
regulate the distribution of firearms in the interstate mar-
ket, compel state law-enforcement officials to perform
background checks. Id., at 933–935. In United States v.
Lopez, 514 U. S. 549 (1995), we held that Congress could
not, as a means of fostering an educated interstate labor
market through the protection of schools, ban the posses-
sion of a firearm within a school zone. Id., at 559–563.
And in United States v. Morrison, 529 U. S. 598 (2000), we
held that Congress could not, in an effort to ensure the full
participation of women in the interstate economy, subject
private individuals and companies to suit for gender-
motivated violent torts. Id., at 609–619. The lesson of
9
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SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
these cases is that the Commerce Clause, even when sup-
plemented by the Necessary and Proper Clause, is not
carte blanche for doing whatever will help achieve the
ends Congress seeks by the regulation of commerce. And
the last two of these cases show that the scope of the
Necessary and Proper Clause is exceeded not only when
the congressional action directly violates the sovereignty
of the States but also when it violates the background
principle of enumerated (and hence limited) federal power.
The case upon which the Government principally relies
to sustain the Individual Mandate under the Necessary
and Proper Clause is Gonzales v. Raich, 545 U. S. 1 (2005).
That case held that Congress could, in an effort to restrain
the interstate market in marijuana, ban the local cultiva-
tion and possession of that drug. Id., at 15–22. Raich
is no precedent for what Congress has done here. That
case’s prohibition of growing (cf. Wickard, 317 U. S. 111),
and of possession (cf. innumerable federal statutes) did not
represent the expansion of the federal power to direct into
a broad new field. The mandating of economic activity
does, and since it is a field so limitless that it converts the
Commerce Clause into a general authority to direct the
economy, that mandating is not “consist[ent] with the
letter and spirit of the constitution.” McCulloch v. Mary-
land, 4 Wheat. 316, 421 (1819).
Moreover, Raich is far different from the Individual
Mandate in another respect. The Court’s opinion in Raich
pointed out that the growing and possession prohibitions
were the only practicable way of enabling the prohibition
of interstate traffic in marijuana to be effectively enforced.
545 U. S., at 22. See also Shreveport Rate Cases, 234 U. S.
342 (1914) (Necessary and Proper Clause allows regula-
tions of intrastate transactions if necessary to the regula-
tion of an interstate market). Intrastate marijuana could
no more be distinguished from interstate marijuana than,
for example, endangered-species trophies obtained before
10
NATIONAL FEDERATION OF INDEPENDENT
BUSINESS
v. SEBELIUS
SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
the species was federally protected can be distinguished
from trophies obtained afterwards—which made it neces-
sary and proper to prohibit the sale of all such trophies,
see Andrus v. Allard, 444 U. S. 51 (1979).
With the present statute, by contrast, there are many
ways other than this unprecedented Individual Mandate
by which the regulatory scheme’s goals of reducing insur-
ance premiums and ensuring the profitability of insurers
could be achieved. For instance, those who did not pur-
chase insurance could be subjected to a surcharge when
they do enter the health insurance system. Or they could
be denied a full income tax credit given to those who do
purchase the insurance.
The Government was invited, at oral argument, to
suggest what federal controls over private conduct (other
than those explicitly prohibited by the Bill of Rights or
other constitutional controls) could not be justified as
necessary and proper for the carrying out of a general
regulatory scheme. See Tr. of Oral Arg. 27–30, 43–45
(Mar. 27, 2012). It was unable to name any. As we said at
the outset, whereas the precise scope of the Commerce
Clause and the Necessary and Proper Clause is uncertain,
the proposition that the Federal Government cannot do
everything is a fundamental precept. See Lopez, 514 U. S.,
at 564 (“[I]f we were to accept the Government’s argu-
ments, we are hard pressed to posit any activity by an in-
dividual that Congress is without power to regulate”).
Section 5000A is defeated by that proposition.
B
The Government’s second theory in support of the In-
dividual Mandate is that §5000A is valid because it is
actually a “regulat[ion of] activities having a substantial
relation to interstate commerce, . . . i.e., . . . activities that
substantially affect interstate commerce.” Id., at 558–559.
See also Shreveport Rate Cases, supra. This argument
11
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SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
takes a few different forms, but the basic idea is that
§5000A regulates “the way in which individuals finance
their participation in the health-care market.” Petitioners’
Minimum Coverage Brief 33 (emphasis added). That is,
the provision directs the manner in which individuals
purchase health care services and related goods (directing
that they be purchased through insurance) and is there-
fore a straightforward exercise of the commerce power.
The primary problem with this argument is that §5000A
does not apply only to persons who purchase all, or most,
or even any, of the health care services or goods that the
mandated insurance covers. Indeed, the main objection
many have to the Mandate is that they have no intention
of purchasing most or even any of such goods or services
and thus no need to buy insurance for those purchases.
The Government responds that the health-care market
involves “essentially universal participation,” id., at 35.
The principal difficulty with this response is that it is, in
the only relevant sense, not true. It is true enough that
everyone consumes “health care,” if the term is taken to
include the purchase of a bottle of aspirin. But the health
care “market” that is the object of the Individual Mandate
not only includes but principally consists of goods and
services that the young people primarily affected by the
Mandate do not purchase. They are quite simply not
participants in that market, and cannot be made so (and
thereby subjected to regulation) by the simple device of
defining participants to include all those who will, later in
their lifetime, probably purchase the goods or services
covered by the mandated insurance.2 Such a definition of
——————
2
JUSTICE GINSBURG is therefore right to note that Congress is “not
mandating the purchase of a discrete, unwanted product.” Ante, at 22
(opinion concurring in part, concurring in judgment in part, and dis-
12
NATIONAL FEDERATION OF INDEPENDENT
BUSINESS
v. SEBELIUS
SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
market participants is unprecedented, and were it to be a
premise for the exercise of national power, it would have
no principled limits.
In a variation on this attempted exercise of federal
power, the Government points out that Congress in this
Act has purported to regulate “economic and financial
decision[s] to forego [sic] health insurance coverage and
[to] attempt to self-insure,” 42 U. S. C. §18091(2)(A), since
those decisions have “a substantial and deleterious effect
on interstate commerce,” Petitioners’ Minimum Coverage
Brief 34. But as the discussion above makes clear, the
decision to forgo participation in an interstate market is
not itself commercial activity (or indeed any activity at all)
within Congress’ power to regulate. It is true that, at the
end of the day, it is inevitable that each American will
affect commerce and become a part of it, even if not by
choice. But if every person comes within the Commerce
Clause power of Congress to regulate by the simple reason
that he will one day engage in commerce, the idea of a
limited Government power is at an end.
Wickard v. Filburn has been regarded as the most ex-
pansive assertion of the commerce power in our history. A
close second is Perez v. United States, 402 U. S. 146 (1971),
which upheld a statute criminalizing the eminently local
activity of loan-sharking. Both of those cases, however,
——————
senting in part). Instead, it is mandating the purchase of an unwanted
suite of products—e.g., physician office visits, emergency room visits,
hospital room and board, physical therapy, durable medical equipment,
mental health care, and substance abuse detoxification. See Selected
Medical Benefits: A Report from the Dept. of Labor to the Dept. of
Health & Human Services (April 15, 2011) (reporting that over two-
thirds of private industry health plans cover these goods and services),
online at http://www.bls.gov/ncs/ebs/sp/selmedbensreport.pdf (all Inter-
net materials as visited June 26, 2012, and available in Clerk of Court’s
case file).
13
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SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
involved commercial activity. To go beyond that, and to
say that the failure to grow wheat or the refusal to make
loans affects commerce, so that growing and lending can
be federally compelled, is to extend federal power to virtu-
ally everything. All of us consume food, and when we do
so the Federal Government can prescribe what its quality
must be and even how much we must pay. But the mere
fact that we all consume food and are thus, sooner or later,
participants in the “market” for food, does not empower
the Government to say when and what we will buy. That
is essentially what this Act seeks to do with respect to the
purchase of health care. It exceeds federal power.
C
A few respectful responses to JUSTICE GINSBURG’s dis-
sent on the issue of the Mandate are in order. That dis-
sent duly recites the test of Commerce Clause power that
our opinions have applied, but disregards the premise the
test contains. It is true enough that Congress needs only a
“ ‘rational basis’ for concluding that the regulated activity
substantially affects interstate commerce,” ante, at 15 (em-
phasis added). But it must be activity affecting com-
merce that is regulated, and not merely the failure to
engage in commerce. And one is not now purchasing
the health care covered by the insurance mandate simply
because one is likely to be purchasing it in the future. Our
test’s premise of regulated activity is not invented out of
whole cloth, but rests upon the Constitution’s requirement
that it be commerce which is regulated. If all inactivity
affecting commerce is commerce, commerce is everything.
Ultimately the dissent is driven to saying that there is
really no difference between action and inaction, ante, at
26, a proposition that has never recommended itself,
neither to the law nor to common sense. To say, for exam-
ple, that the inaction here consists of activity in “the self-
insurance market,” ibid., seems to us wordplay. By parity
14
NATIONAL FEDERATION OF INDEPENDENT
BUSINESS
v. SEBELIUS
SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
of reasoning the failure to buy a car can be called partici-
pation in the non-private-car-transportation market. Com-
merce becomes everything.
The dissent claims that we “fai[l] to explain why the
individual mandate threatens our constitutional order.”
Ante, at 35. But we have done so. It threatens that order
because it gives such an expansive meaning to the Com-
merce Clause that all private conduct (including failure to
act) becomes subject to federal control, effectively destroy-
ing the Constitution’s division of governmental powers.
Thus the dissent, on the theories proposed for the validity
of the Mandate, would alter the accepted constitutional
relation between the individual and the National Govern-
ment. The dissent protests that the Necessary and Proper
Clause has been held to include “the power to enact crimi-
nal laws, . . . the power to imprison, . . . and the power to
create a national bank,” ante, at 34–35. Is not the power
to compel purchase of health insurance much lesser? No,
not if (unlike those other dispositions) its application rests
upon a theory that everything is within federal control
simply because it exists.
The dissent’s exposition of the wonderful things the Fed-
eral Government has achieved through exercise of its
assigned powers, such as “the provision of old-age and
survivors’ benefits” in the Social Security Act, ante, at 2,
is quite beside the point. The issue here is whether the
federal government can impose the Individual Mandate
through the Commerce Clause. And the relevant history
is not that Congress has achieved wide and wonderful
results through the proper exercise of its assigned powers
in the past, but that it has never before used the Com-
merce Clause to compel entry into commerce.3 The dissent
——————
3
In its effort to show the contrary, JUSTICE GINSBURG’S dissent comes
15
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SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
treats the Constitution as though it is an enumeration of
those problems that the Federal Government can ad-
dress—among which, it finds, is “the Nation’s course in
the economic and social welfare realm,” ibid., and more
specifically “the problem of the uninsured,” ante, at 7.
The Constitution is not that. It enumerates not federally
soluble problems, but federally available powers. The
Federal Government can address whatever problems it
wants but can bring to their solution only those powers
that the Constitution confers, among which is the power to
regulate commerce. None of our cases say anything else.
Article I contains no whatever-it-takes-to-solve-a-national-
problem power.
The dissent dismisses the conclusion that the power to
compel entry into the health-insurance market would
include the power to compel entry into the new-car or
broccoli markets. The latter purchasers, it says, “will be
obliged to pay at the counter before receiving the vehicle
——————
up with nothing more than two condemnation cases, which it says
demonstrate “Congress’ authority under the commerce power to compel
an ‘inactive’ landholder to submit to an unwanted sale.” Ante, at 24.
Wrong on both scores. As its name suggests, the condemnation power
does not “compel” anyone to do anything. It acts in rem, against the
property that is condemned, and is effective with or without a transfer
of title from the former owner. More important, the power to condemn
for public use is a separate sovereign power, explicitly acknowledged in
the Fifth Amendment, which provides that “private property [shall not]
be taken for public use, without just compensation.”
Thus, the power to condemn tends to refute rather than support
the power to compel purchase of unwanted goods at a prescribed price:
The latter is rather like the power to condemn cash for public use. If it
existed, why would it not (like the condemnation power) be accompa-
nied by a requirement of fair compensation for the portion of the
exacted price that exceeds the goods’ fair market value (here, the
difference between what the free market would charge for a health-
insurance policy on a young, healthy person with no pre-existing
conditions, and the government-exacted community-rated premium)?
16
NATIONAL FEDERATION OF INDEPENDENT
BUSINESS
v. SEBELIUS
SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
or nourishment,” whereas those refusing to purchase
health-insurance will ultimately get treated anyway, at
others’ expense. Ante, at 21. “[T]he unique attributes of
the health-care market . . . give rise to a significant free-
riding problem that does not occur in other markets.”
Ante, at 28. And “a vegetable-purchase mandate” (or a
car-purchase mandate) is not “likely to have a substantial
effect on the health-care costs” borne by other Americans.
Ante, at 29. Those differences make a very good argument
by the dissent’s own lights, since they show that the fail-
ure to purchase health insurance, unlike the failure to
purchase cars or broccoli, creates a national, social-welfare
problem that is (in the dissent’s view) included among the
unenumerated “problems” that the Constitution author-
izes the Federal Government to solve. But those differences
do not show that the failure to enter the health-insurance
market, unlike the failure to buy cars and broccoli, is
an activity that Congress can “regulate.” (Of course one
day the failure of some of the public to purchase Amer-
ican cars may endanger the existence of domestic automo-
bile manufacturers; or the failure of some to eat broccoli
may be found to deprive them of a newly discovered cancer-
fighting chemical which only that food contains, producing
health-care costs that are a burden on the rest of us—in
which case, under the theory of JUSTICE GINSBURG’s dis-
sent, moving against those inactivities will also come
within the Federal Government’s unenumerated problem-
solving powers.)
II
The Taxing Power
As far as §5000A is concerned, we would stop there.
Congress has attempted to regulate beyond the scope of its
17
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SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
Commerce Clause authority,4 and §5000A is therefore
invalid. The Government contends, however, as expressed
in the caption to Part II of its brief, that “THE MINIMUM
COVERAGE PROVISION IS INDEPENDENTLY AUTHORIZED BY
CONGRESS
’S TAXING POWER.” Petitioners’ Minimum Cov-
erage Brief 52. The phrase “independently authorized”
suggests the existence of a creature never hitherto seen
in the United States Reports: A penalty for constitutional
purposes that is also a tax for constitutional purposes. In
all our cases the two are mutually exclusive. The provi-
sion challenged under the Constitution is either a penalty
or else a tax. Of course in many cases what was a regu-
latory mandate enforced by a penalty could have been
imposed as a tax upon permissible action; or what was im-
posed as a tax upon permissible action could have been a
regulatory mandate enforced by a penalty. But we know
of no case, and the Government cites none, in which the
imposition was, for constitutional purposes, both.5 The
two are mutually exclusive. Thus, what the Government’s
caption should have read was “ALTERNATIVELY, THE
MINIMUM COVERAGE PROVISION IS NOT A MANDATE
-WITH-
PENALTY BUT A TAX
.” It is important to bear this in mind
in evaluating the tax argument of the Government and of
those who support it: The issue is not whether Congress
——————
4
No one seriously contends that any of Congress’ other enumerated
powers gives it the authority to enact §5000A as a regulation.
5
Of course it can be both for statutory purposes, since Congress can
define “tax” and “penalty” in its enactments any way it wishes. That is
why United States v. Sotelo, 436 U. S. 268 (1978), does not disprove our
statement. That case held that a “penalty” for willful failure to pay
one’s taxes was included among the “taxes” made non-dischargeable
under the Bankruptcy Code. 436 U. S., at 273–275. Whether the
“penalty” was a “tax” within the meaning of the Bankruptcy Code had
absolutely no bearing on whether it escaped the constitutional limita-
tions on penalties.
18
NATIONAL FEDERATION OF INDEPENDENT
BUSINESS
v. SEBELIUS
SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
had the power to frame the minimum-coverage provision
as a tax, but whether it did so.
In answering that question we must, if “fairly possible,”
Crowell v. Benson, 285 U. S. 22, 62 (1932), construe the
provision to be a tax rather than a mandate-with-penalty,
since that would render it constitutional rather than un-
constitutional (ut res magis valeat quam pereat). But we
cannot rewrite the statute to be what it is not. “‘ “[A]l-
though this Court will often strain to construe legis-
lation so as to save it against constitutional attack, it
must not and will not carry this to the point of perverting
the purpose of a statute . . .” or judicially rewriting it.’”
Commodity Futures Trading Comm’n v. Schor, 478 U. S.
833, 841 (1986) (quoting Aptheker v. Secretary of State,
378 U. S. 500, 515 (1964), in turn quoting Scales v. United
States, 367 U. S. 203, 211 (1961)). In this case, there is
simply no way, “without doing violence to the fair meaning
of the words used,” Grenada County Supervisors v. Brog-
den, 112 U. S. 261, 269 (1884), to escape what Congress
enacted: a mandate that individuals maintain minimum
essential coverage, enforced by a penalty.
Our cases establish a clear line between a tax and a
penalty: “ ‘[A] tax is an enforced contribution to provide for
the support of government; a penalty . . . is an exaction
imposed by statute as punishment for an unlawful act.’ ”
United States v. Reorganized CF&I Fabricators of Utah,
Inc., 518 U. S. 213, 224 (1996) (quoting United States v. La
Franca, 282 U. S. 568, 572 (1931)). In a few cases, this
Court has held that a “tax” imposed upon private conduct
was so onerous as to be in effect a penalty. But we have
never held—never—that a penalty imposed for violation of
the law was so trivial as to be in effect a tax. We have
never held that any exaction imposed for violation of
the law is an exercise of Congress’ taxing power—even
when the statute calls it a tax, much less when (as here)
the statute repeatedly calls it a penalty. When an act
19
Cite as: 567 U. S. ____ (2012)
SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
“adopt[s] the criteria of wrongdoing” and then imposes a
monetary penalty as the “principal consequence on those
who transgress its standard,” it creates a regulatory pen-
alty, not a tax. Child Labor Tax Case, 259 U. S. 20, 38
(1922).
So the question is, quite simply, whether the exaction
here is imposed for violation of the law. It unquestion-
ably is. The minimum-coverage provision is found in 26
U. S. C. §5000A, entitled “Requirement to maintain mini-
mum essential coverage.” (Emphasis added.) It commands
that every “applicable individual shall . . . ensure that the
individual . . . is covered under minimum essential cover-
age.” Ibid. (emphasis added). And the immediately fol-
lowing provision states that, “[i]f . . . an applicable
individual . . . fails to meet the requirement of subsection
(a) . . . there is hereby imposed . . . a penalty.” §5000A(b)
(emphasis added). And several of Congress’ legislative
“findings” with regard to §5000A confirm that it sets forth
a legal requirement and constitutes the assertion of regu-
latory power, not mere taxing power. See 42 U. S. C.
§18091(2)(A) (“The requirement regulates activity . . .”);
§18091(2)(C) (“The requirement . . . will add millions of
new consumers to the health insurance market . . .”);
§18091(2)(D) (“The requirement achieves near-universal
coverage”); §18091(2)(H) (“The requirement is an essential
part of this larger regulation of economic activity, and the
absence of the requirement would undercut Federal regu-
lation of the health insurance market”); §18091(3) (“[T]he
Supreme Court of the United States ruled that insurance
is interstate commerce subject to Federal regulation”).
The Government and those who support its view on the
tax point rely on New York v. United States, 505 U. S. 144,
to justify reading “shall” to mean “may.” The “shall” in
that case was contained in an introductory provision—a
recital that provided for no legal consequences—which
said that “[e]ach State shall be responsible for providing
20
NATIONAL FEDERATION OF INDEPENDENT
BUSINESS
v. SEBELIUS
SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
. . . for the disposal of . . . low-level radioactive waste.” 42
U. S. C. §2021c(a)(1)(A). The Court did not hold that
“shall” could be construed to mean “may,” but rather that
this preliminary provision could not impose upon the oper-
ative provisions of the Act a mandate that they did not
contain: “We . . . decline petitioners’ invitation to con-
strue §2021c(a)(1)(A), alone and in isolation, as a com-
mand to the States independent of the remainder of the
Act.” New York, 505 U. S., at 170. Our opinion then
proceeded to “consider each [of the three operative provi-
sions] in turn.” Ibid. Here the mandate—the “shall”—is
contained not in an inoperative preliminary recital, but in
the dispositive operative provision itself. New York pro-
vides no support for reading it to be permissive.
Quite separately, the fact that Congress (in its own
words) “imposed . . . a penalty,” 26 U. S. C. §5000A(b)(1),
for failure to buy insurance is alone sufficient to render
that failure unlawful. It is one of the canons of interpreta-
tion that a statute that penalizes an act makes it unlaw-
ful: “[W]here the statute inflicts a penalty for doing an act,
although the act itself is not expressly prohibited, yet to do
the act is unlawful, because it cannot be supposed that the
Legislature intended that a penalty should be inflicted for
a lawful act.” Powhatan Steamboat Co. v. Appomattox R.
Co., 24 How. 247, 252 (1861). Or in the words of Chancel-
lor Kent: “If a statute inflicts a penalty for doing an act,
the penalty implies a prohibition, and the thing is unlaw-
ful, though there be no prohibitory words in the statute.”
1 J. Kent, Commentaries on American Law 436 (1826).
We never have classified as a tax an exaction imposed
for violation of the law, and so too, we never have classi-
fied as a tax an exaction described in the legislation itself
as a penalty. To be sure, we have sometimes treated as a
tax a statutory exaction (imposed for something other
than a violation of law) which bore an agnostic label that
does not entail the significant constitutional consequences
21
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SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
of a penalty—such as “license” (License Tax Cases, 5 Wall.
462 (1867)) or “surcharge” (New York v. United States,
supra.). But we have never—never—treated as a tax an
exaction which faces up to the critical difference between
a tax and a penalty, and explicitly denominates the exac-
tion a “penalty.” Eighteen times in §5000A itself and else-
where throughout the Act, Congress called the exaction in
§5000A(b) a “penalty.”
That §5000A imposes not a simple tax but a mandate to
which a penalty is attached is demonstrated by the fact
that some are exempt from the tax who are not ex-
empt from the mandate—a distinction that would make
no sense if the mandate were not a mandate. Section
5000A(d) exempts three classes of people from the defini-
tion of “applicable individual” subject to the minimum
coverage requirement: Those with religious objections or
who participate in a “health care sharing ministry,”
§5000A(d)(2); those who are “not lawfully present” in the
United States, §5000A(d)(3); and those who are incarcer-
ated, §5000A(d)(4). Section 5000A(e) then creates a sepa-
rate set of exemptions, excusing from liability for the
penalty certain individuals who are subject to the mini-
mum coverage requirement: Those who cannot afford
coverage, §5000A(e)(1); who earn too little income to re-
quire filing a tax return, §5000A(e)(2); who are members
of an Indian tribe, §5000A(e)(3); who experience only short
gaps in coverage, §5000A(e)(4); and who, in the judgment
of the Secretary of Health and Human Services, “have
suffered a hardship with respect to the capability to obtain
coverage,” §5000A(e)(5). If §5000A were a tax, these two
classes of exemption would make no sense; there being no
requirement, all the exemptions would attach to the pen-
alty (renamed tax) alone.
In the face of all these indications of a regulatory re-
quirement accompanied by a penalty, the Solicitor General
assures us that “neither the Treasury Department nor the
22
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v. SEBELIUS
SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
Department of Health and Human Services interprets
Section 5000A as imposing a legal obligation,” Petitioners’
Minimum Coverage Brief 61, and that “[i]f [those subject
to the Act] pay the tax penalty, they’re in compliance with
the law,” Tr. of Oral Arg. 50 (Mar. 26, 2012). These self-
serving litigating positions are entitled to no weight.
What counts is what the statute says, and that is entirely
clear. It is worth noting, moreover, that these assurances
contradict the Government’s position in related litigation.
Shortly before the Affordable Care Act was passed, the
Commonwealth of Virginia enacted Va. Code Ann. §38.2–
3430.1:1 (Lexis Supp. 2011), which states, “No resident of
[the] Commonwealth . . . shall be required to obtain or
maintain a policy of individual insurance coverage except
as required by a court or the Department of Social Ser-
vices . . . .” In opposing Virginia’s assertion of standing to
challenge §5000A based on this statute, the Government
said that “if the minimum coverage provision is unconsti-
tutional, the [Virginia] statute is unnecessary, and if the
minimum coverage provision is upheld, the state statute is
void under the Supremacy Clause.” Brief for Appellant
in No. 11–1057 etc. (CA4), p. 29. But it would be void
under the Supremacy Clause only if it was contradicted by
a federal “require[ment] to obtain or maintain a policy of
individual insurance coverage.”
Against the mountain of evidence that the minimum
coverage requirement is what the statute calls it—a re-
quirement—and that the penalty for its violation is what
the statute calls it—a penalty—the Government brings
forward the flimsiest of indications to the contrary. It
notes that “[t]he minimum coverage provision amends the
Internal Revenue Code to provide that a non-exempted
individual . . . will owe a monetary penalty, in addition to
the income tax itself,” and that “[t]he [Internal Revenue
Service (IRS)] will assess and collect the penalty in the
same manner as assessable penalties under the Internal
23
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SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
Revenue Code.” Petitioners’ Minimum Coverage Brief 53.
The manner of collection could perhaps suggest a tax if
IRS penalty-collection were unheard-of or rare. It is not.
See, e.g., 26 U. S. C. §527(j) (2006 ed.) (IRS-collectible pen-
alty for failure to make campaign-finance disclosures);
§5761© (IRS-collectible penalty for domestic sales of to-
bacco products labeled for export); §9707 (IRS-collectible
penalty for failure to make required health-insurance
premium payments on behalf of mining employees). In
Reorganized CF&I Fabricators of Utah, Inc., 518 U. S.
213, we held that an exaction not only enforced by the
Commissioner of Internal Revenue but even called a “tax”
was in fact a penalty. “[I]f the concept of penalty means
anything,” we said, “it means punishment for an unlawful
act or omission.” Id., at 224. See also Lipke v. Lederer,
259 U. S. 557 (1922) (same). Moreover, while the penalty
is assessed and collected by the IRS, §5000A is adminis-
tered both by that agency and by the Department of
Health and Human Services (and also the Secretary of
Veteran Affairs), see §5000A(e)(1)(D), (e)(5), (f)(1)(A)(v),
(f)(1)(E) (2006 ed., Supp. IV), which is responsible for
defining its substantive scope—a feature that would be
quite extraordinary for taxes.
The Government points out that “[t]he amount of the
penalty will be calculated as a percentage of household
income for federal income tax purposes, subject to a floor
and [a] ca[p],” and that individuals who earn so little
money that they “are not required to file income tax re-
turns for the taxable year are not subject to the penalty”
(though they are, as we discussed earlier, subject to the
mandate). Petitioners’ Minimum Coverage Brief 12, 53.
But varying a penalty according to ability to pay is an
utterly familiar practice. See, e.g., 33 U. S. C. §1319(d)
(2006 ed., Supp. IV) (“In determining the amount of a civil
penalty the court shall consider . . . the economic impact of
the penalty on the violator”); see also 6 U. S. C. §488e©; 7
24
NATIONAL FEDERATION OF INDEPENDENT
BUSINESS
v. SEBELIUS
SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
U. S. C. §§7734(b)(2), 8313(b)(2); 12 U. S. C. §§1701q–1(d)(3),
1723i©(3), 1735f–14©(3), 1735f–15(d)(3), 4585©(2); 15
U. S. C. §§45(m)(1)(C), 77h–1(g)(3), 78u–2(d), 80a–9(d)(4),
80b–3(i)(4), 1681s(a)(2)(B), 1717a(b)(3), 1825(b)(1), 2615(a)
(2)(B), 5408(b)(2); 33 U. S. C. §2716a(a).
The last of the feeble arguments in favor of petition-
ers that we will address is the contention that what this
statute repeatedly calls a penalty is in fact a tax because it
contains no scienter requirement. The presence of such a
requirement suggests a penalty—though one can imagine
a tax imposed only on willful action; but the absence of
such a requirement does not suggest a tax. Penalties for
absolute-liability offenses are commonplace. And where a
statute is silent as to scienter, we traditionally presume
a mens rea requirement if the statute imposes a “severe
penalty.” Staples v. United States, 511 U. S. 600, 618
(1994). Since we have an entire jurisprudence addressing
when it is that a scienter requirement should be inferred
from a penalty, it is quite illogical to suggest that a
penalty is not a penalty for want of an express scienter
requirement.
And the nail in the coffin is that the mandate and pen-
alty are located in Title I of the Act, its operative core,
rather than where a tax would be found—in Title IX,
containing the Act’s “Revenue Provisions.” In sum, “the
terms of [the] act rende[r] it unavoidable,” Parsons v.
Bedford, 3 Pet. 433, 448 (1830), that Congress imposed a
regulatory penalty, not a tax.
For all these reasons, to say that the Individual Man-
date merely imposes a tax is not to interpret the statute
but to rewrite it. Judicial tax-writing is particularly troubl-
ing. Taxes have never been popular, see, e.g., Stamp Act
of 1765, and in part for that reason, the Constitution
requires tax increases to originate in the House of Repre-
sentatives. See Art. I, §7, cl. 1. That is to say, they must
originate in the legislative body most accountable to the
25
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SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
people, where legislators must weigh the need for the tax
against the terrible price they might pay at their next
election, which is never more than two years off. The
Federalist No. 58 “defend[ed] the decision to give the
origination power to the House on the ground that the
Chamber that is more accountable to the people should
have the primary role in raising revenue.” United States
v. Munoz-Flores, 495 U. S. 385, 395 (1990). We have no
doubt that Congress knew precisely what it was doing
when it rejected an earlier version of this legislation that
imposed a tax instead of a requirement-with-penalty. See
Affordable Health Care for America Act, H. R. 3962, 111th
Cong., 1st Sess., §501 (2009); America’s Healthy Future
Act of 2009, S. 1796, 111th Cong., 1st Sess., §1301. Impos-
ing a tax through judicial legislation inverts the constitu-
tional scheme, and places the power to tax in the branch of
government least accountable to the citizenry.
Finally, we must observe that rewriting §5000A as a tax
in order to sustain its constitutionality would force us to
confront a difficult constitutional question: whether this is
a direct tax that must be apportioned among the States
according to their population. Art. I, §9, cl. 4. Perhaps it
is not (we have no need to address the point); but the
meaning of the Direct Tax Clause is famously unclear, and
its application here is a question of first impression that
deserves more thoughtful consideration than the lick-and-
a-promise accorded by the Government and its supporters.
The Government’s opening brief did not even address the
question—perhaps because, until today, no federal court
has accepted the implausible argument that §5000A is
an exercise of the tax power. And once respondents raised
the issue, the Government devoted a mere 21 lines of its
reply brief to the issue. Petitioners’ Minimum Coverage
Reply Brief 25. At oral argument, the most prolonged
statement about the issue was just over 50 words. Tr. of
Oral Arg. 79 (Mar. 27, 2012). One would expect this Court
26
NATIONAL FEDERATION OF INDEPENDENT
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v. SEBELIUS
SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
to demand more than fly-by-night briefing and argument
before deciding a difficult constitutional question of first
impression.
III
The Anti-Injunction Act
There is another point related to the Individual Man-
date that we must discuss—a point that logically should
have been discussed first: Whether jurisdiction over the
challenges to the minimum-coverage provision is precluded
by the Anti-Injunction Act, which provides that “no suit
for the purpose of restraining the assessment or collection
of any tax shall be maintained in any court by any per-
son,” 26 U. S. C. §7421(a) (2006 ed.).
We have left the question to this point because it
seemed to us that the dispositive question whether the
minimum-coverage provision is a tax is more appropriately
addressed in the significant constitutional context of
whether it is an exercise of Congress’ taxing power. Hav-
ing found that it is not, we have no difficulty in deciding
that these suits do not have “the purpose of restraining
the assessment or collection of any tax.”6
——————
6
The amicus appointed to defend the proposition that the Anti-
Injunction Act deprives us of jurisdiction stresses that the penalty for
failing to comply with the mandate “shall be assessed and collected
in the same manner as an assessable penalty under subchapter B of
chapter 68,” 26 U. S. C. §5000A(g)(1) (2006 ed., Supp. IV), and that
such penalties “shall be assessed and collected in the same manner
as taxes,” §6671(a) (2006 ed.). But that point seems to us to confirm
the inapplicability of the Anti-Injunction Act. That the penalty is to
be “assessed and collected in the same manner as taxes” refutes the
proposition that it is a tax for all statutory purposes, including with
respect to the Anti-Injunction Act. Moreover, elsewhere in the Internal
Revenue Code, Congress has provided both that a particular payment
shall be “assessed and collected” in the same manner as a tax and that
no suit shall be maintained to restrain the assessment or collection of
the payment. See, e.g., §§7421(b)(1), §6901(a); §6305(a), (b). The
27
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SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
The Government and those who support its position on
this point make the remarkable argument that §5000A is
not a tax for purposes of the Anti-Injunction Act, see Brief
for Petitioners in No. 11–398 (Anti-Injunction Act), but
is a tax for constitutional purposes, see Petitioners’ Mini-
mum Coverage Brief 52–62. The rhetorical device that
tries to cloak this argument in superficial plausibility is
the same device employed in arguing that for constitu-
tional purposes the minimum-coverage provision is a tax:
confusing the question of what Congress did with the
question of what Congress could have done. What quali-
fies as a tax for purposes of the Anti-Injunction Act, unlike
what qualifies as a tax for purposes of the Constitution, is
entirely within the control of Congress. Compare Bailey v.
George, 259 U. S. 16, 20 (1922) (Anti-Injunction Act barred
suit to restrain collections under the Child Labor Tax
Law), with Child Labor Tax Case, 259 U. S., at 36–41
(holding the same law unconstitutional as exceeding Con-
gress’ taxing power). Congress could have defined “tax”
for purposes of that statute in such fashion as to exclude
some exactions that in fact are “taxes.” It might have
prescribed, for example, that a particular exercise of the
taxing power “shall not be regarded as a tax for purposes
of the Anti-Injunction Act.” But there is no such prescrip-
tion here. What the Government would have us believe in
——————
latter directive would be superfluous if the former invoked the Anti-
Injunction Act.
Amicus also suggests that the penalty should be treated as a tax
because it is an assessable penalty, and the Code’s assessment provi-
sion authorizes the Secretary of the Treasury to assess “all taxes (in-
cluding interest, additional amounts, additions to the tax, and as-
sessable penalties) imposed by this title.” §6201(a) (2006 ed., Supp.
IV). But the fact that such items are included as “taxes” for purposes of
assessment does not establish that they are included as “taxes” for
purposes of other sections of the Code, such as the Anti-Injunction Act,
that do not contain similar “including” language.
28
NATIONAL FEDERATION OF INDEPENDENT
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v. SEBELIUS
SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
these cases is that the very same textual indications that
show this is not a tax under the Anti-Injunction Act show
that it is a tax under the Constitution. That carries ver-
bal wizardry too far, deep into the forbidden land of the
sophists.
IV
The Medicaid Expansion
We now consider respondents’ second challenge to the
constitutionality of the ACA, namely, that the Act’s dra-
matic expansion of the Medicaid program exceeds Con-
gress’ power to attach conditions to federal grants to the
States.
The ACA does not legally compel the States to partici-
pate in the expanded Medicaid program, but the Act au-
thorizes a severe sanction for any State that refuses to go
along: termination of all the State’s Medicaid funding. For
the average State, the annual federal Medicaid subsidy is
equal to more than one-fifth of the State’s expenditures.7
A State forced out of the program would not only lose this
huge sum but would almost certainly find it necessary to
increase its own health-care expenditures substantially,
requiring either a drastic reduction in funding for other
programs or a large increase in state taxes. And these
new taxes would come on top of the federal taxes already
paid by the State’s citizens to fund the Medicaid program
in other States.
The States challenging the constitutionality of the ACA’s
Medicaid Expansion contend that, for these practical
reasons, the Act really does not give them any choice at
all. As proof of this, they point to the goal and the struc-
——————
7
“State expenditures” is used here to mean annual expenditures from
the States’ own funding sources, and it excludes federal grants unless
otherwise noted.
29
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SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
ture of the ACA. The goal of the Act is to provide near-
universal medical coverage, 42 U. S. C. §18091(2)(D), and
without 100% State participation in the Medicaid pro-
gram, attainment of this goal would be thwarted. Even if
States could elect to remain in the old Medicaid program,
while declining to participate in the Expansion, there
would be a gaping hole in coverage. And if a substantial
number of States were entirely expelled from the program,
the number of persons without coverage would be even
higher.
In light of the ACA’s goal of near-universal coverage,
petitioners argue, if Congress had thought that anything
less than 100% state participation was a realistic possibil-
ity, Congress would have provided a backup scheme. But
no such scheme is to be found anywhere in the more than
900 pages of the Act. This shows, they maintain, that
Congress was certain that the ACA’s Medicaid offer was
one that no State could refuse.
In response to this argument, the Government contends
that any congressional assumption about uniform state
participation was based on the simple fact that the offer
of federal funds associated with the expanded coverage is
such a generous gift that no State would want to turn it
down.
To evaluate these arguments, we consider the extent of
the Federal Government’s power to spend money and to
attach conditions to money granted to the States.
A
No one has ever doubted that the Constitution author-
izes the Federal Government to spend money, but for
many years the scope of this power was unsettled. The
Constitution grants Congress the power to collect taxes “to
. . . provide for the . . . general Welfare of the United
States,” Art. I, §8, cl. 1, and from “the foundation of the
Nation sharp differences of opinion have persisted as to
30
NATIONAL FEDERATION OF INDEPENDENT
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v. SEBELIUS
SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
the true interpretation of the phrase” “the general wel-
fare.” Butler, 297 U. S., at 65. Madison, it has been said,
thought that the phrase “amounted to no more than a
reference to the other powers enumerated in the subse-
quent clauses of the same section,” while Hamilton “main-
tained the clause confers a power separate and distinct
from those later enumerated [and] is not restricted in
meaning by the grant of them.” Ibid.
The Court resolved this dispute in Butler. Writing for
the Court, Justice Roberts opined that the Madisonian
view would make Article I’s grant of the spending power a
“mere tautology.” Ibid. To avoid that, he adopted Hamil-
ton’s approach and found that “the power of Congress to
authorize expenditure of public moneys for public pur-
poses is not limited by the direct grants of legislative
power found in the Constitution.” Id., at 66. Instead, he
wrote, the spending power’s “confines are set in the clause
which confers it, and not in those of section 8 which be-
stow and define the legislative powers of the Congress.”
Ibid.; see also Steward Machine Co. v. Davis, 301 U. S.
548, 586–587 (1937); Helvering v. Davis, 301 U. S. 619,
640 (1937).
The power to make any expenditure that furthers “the
general welfare” is obviously very broad, and shortly after
Butler was decided the Court gave Congress wide leeway
to decide whether an expenditure qualifies. See Helvering,
301 U. S., at 640–641. “The discretion belongs to Con-
gress,” the Court wrote, “unless the choice is clearly
wrong, a display of arbitrary power, not an exercise of
judgment.” Id., at 640. Since that time, the Court has
never held that a federal expenditure was not for “the
general welfare.”
B
One way in which Congress may spend to promote the
general welfare is by making grants to the States. Mone-
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tary grants, so-called grants-in-aid, became more frequent
during the 1930’s, G. Stephens & N. Wikstrom, Ameri-
can Intergovernmental Relations—A Fragmented Federal
Polity 83 (2007), and by 1950 they had reached $20 billion8
or 11.6% of state and local government expenditures from
their own sources.9 By 1970 this number had grown to
$123.7 billion10 or 29.1% of state and local government
expenditures from their own sources.11 As of 2010, fed-
eral outlays to state and local governments came to over
$608 billion or 37.5% of state and local government
expenditures.12
When Congress makes grants to the States, it customar-
ily attaches conditions, and this Court has long held that
the Constitution generally permits Congress to do this.
See Pennhurst State School and Hospital v. Halderman,
451 U. S. 1, 17 (1981); South Dakota v. Dole, 483 U. S.
203, 206 (1987); Fullilove v. Klutznick, 448 U. S. 448, 474
(1980) (opinion of Burger, C. J.); Steward Machine, supra,
at 593.
C
This practice of attaching conditions to federal funds
——————
8
This number is expressed in billions of Fiscal Year 2005 dollars.
9
See Office of Management and Budget, Historical Tables, Budget of
the U. S. Government, Fiscal Year 2013, Table 12.1—Summary Com-
parison of Total Outlays for Grants to State and Local Governments:
1940–2017 (hereinafter Table 12.1), http://www.whitehouse.gov/omb/
budget/Historicals; id., Table 15.2—Total Government Expenditures:
1948–2011 (hereinafter Table 15.2).
10
This number is expressed in billions of Fiscal Year 2005 dollars.
11
See Table 12.1; Dept. of Commerce, Bureau of Census, Statistical
Abstract of the United States: 2001, p. 262 (Table 419, Federal Grants-
in-Aid Summary: 1970 to 2001).
12
See Statistical Abstract of the United States: 2012, p. 268 (Table
431, Federal Grants-in-Aid to State and Local Governments: 1990 to
2011).
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greatly increases federal power. “[O]bjectives not thought
to be within Article I’s enumerated legislative fields, may
nevertheless be attained through the use of the spending
power and the conditional grant of federal funds.” Dole,
supra, at 207 (internal quotation marks and citation omit-
ted); see also College Savings Bank v. Florida Prepaid
Postsecondary Ed. Expense Bd., 527 U. S. 666, 686 (1999)
(by attaching conditions to federal funds, Congress may
induce the States to “tak[e] certain actions that Congress
could not require them to take”).
This formidable power, if not checked in any way, would
present a grave threat to the system of federalism created
by our Constitution. If Congress’ “Spending Clause power
to pursue objectives outside of Article I’s enumerated
legislative fields,” Davis v. Monroe County Bd. of Ed., 526
U. S. 629, 654 (1999) (KENNEDY, J., dissenting) (internal
quotation marks omitted), is “limited only by Congress’
notion of the general welfare, the reality, given the vast
financial resources of the Federal Government, is that
the Spending Clause gives ‘power to the Congress to tear
down the barriers, to invade the states’ jurisdiction, and to
become a parliament of the whole people, subject to no
restrictions save such as are self-imposed,’” Dole, supra, at
217 (O’Connor, J., dissenting) (quoting Butler, 297 U. S.,
at 78). “[T]he Spending Clause power, if wielded without
concern for the federal balance, has the potential to oblite-
rate distinctions between national and local spheres of
interest and power by permitting the Federal Government
to set policy in the most sensitive areas of traditional
state concern, areas which otherwise would lie outside
its reach.” Davis, supra, at 654–655 (KENNEDY, J.,
dissenting).
Recognizing this potential for abuse, our cases have long
held that the power to attach conditions to grants to the
States has limits. See, e.g., Dole, supra, at 207–208; id.,
at 207 (spending power is “subject to several general re-
33
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SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
strictions articulated in our cases”). For one thing, any
such conditions must be unambiguous so that a State at
least knows what it is getting into. See Pennhurst, supra,
at 17. Conditions must also be related “to the federal
interest in particular national projects or programs,”
Massachusetts v. United States, 435 U. S. 444, 461 (1978),
and the conditional grant of federal funds may not “induce
the States to engage in activities that would themselves be
unconstitutional,” Dole, supra, at 210; see Lawrence County
v. Lead-Deadwood School Dist. No. 40–1, 469 U. S.
256, 269–270 (1985). Finally, while Congress may seek to
induce States to accept conditional grants, Congress may
not cross the “point at which pressure turns into compul-
sion, and ceases to be inducement.” Steward Machine, 301
U. S., at 590. Accord, College Savings Bank, supra, at 687;
Metropolitan Washington Airports Authority v. Citizens for
Abatement of Aircraft Noise, Inc., 501 U. S. 252, 285 (1991)
(White, J., dissenting); Dole, supra, at 211.
When federal legislation gives the States a real choice
whether to accept or decline a federal aid package, the
federal-state relationship is in the nature of a contractual
relationship. See Barnes v. Gorman, 536 U. S. 181, 186
(2002); Pennhurst, 451 U. S., at 17. And just as a contract
is voidable if coerced, “[t]he legitimacy of Congress’ power
to legislate under the spending power . . . rests on whether
the State voluntarily and knowingly accepts the terms
of the ‘contract.’ ” Ibid. (emphasis added). If a federal
spending program coerces participation the States have
not “exercise[d] their choice”—let alone made an “informed
choice.” Id., at 17, 25.
Coercing States to accept conditions risks the destruc-
tion of the “unique role of the States in our system.”
Davis, supra, at 685 (KENNEDY, J., dissenting). “[T]he
Constitution has never been understood to confer upon
Congress the ability to require the States to govern accord-
ing to Congress’ instructions.” New York, 505 U. S., at
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NATIONAL FEDERATION OF INDEPENDENT
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v. SEBELIUS
SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
162. Congress may not “simply commandeer the legisla-
tive processes of the States by directly compelling them to
enact and enforce a federal regulatory program.” Id.,
at 161 (internal quotation marks and brackets omitted).
Congress effectively engages in this impermissible com-
pulsion when state participation in a federal spending
program is coerced, so that the States’ choice whether to
enact or administer a federal regulatory program is ren-
dered illusory.
Where all Congress has done is to “encourag[e] state
regulation rather than compe[l] it, state governments
remain responsive to the local electorate’s preferences;
state officials remain accountable to the people. [But]
where the Federal Government compels States to regulate,
the accountability of both state and federal officials is
diminished.” New York, supra, at 168.
Amici who support the Government argue that forcing
state employees to implement a federal program is more
respectful of federalism than using federal workers to
implement that program. See, e.g., Brief for Service Em-
ployees International Union et al. as Amici Curiae in No.
11–398, pp. 25–26. They note that Congress, instead of
expanding Medicaid, could have established an entirely
federal program to provide coverage for the same group of
people. By choosing to structure Medicaid as a cooperative
federal-state program, they contend, Congress allows for
more state control. Ibid.
This argument reflects a view of federalism that our
cases have rejected—and with good reason. When Con-
gress compels the States to do its bidding, it blurs the
lines of political accountability. If the Federal Govern-
ment makes a controversial decision while acting on its
own, “it is the Federal Government that makes the deci-
sion in full view of the public, and it will be federal offi-
cials that suffer the consequences if the decision turns out
to be detrimental or unpopular.” New York, 505 U. S., at
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168. But when the Federal Government compels the
States to take unpopular actions, “it may be state officials
who will bear the brunt of public disapproval, while the
federal officials who devised the regulatory program may
remain insulated from the electoral ramifications of their
decision.” Id., at 169; see Printz, supra, at 930. For this
reason, federal officeholders may view this “departur[e]
from the federal structure to be in their personal interests
. . . as a means of shifting responsibility for the eventual
decision.” New York, 505 U. S., at 182–183. And even state
officials may favor such a “departure from the constitu-
tional plan,” since uncertainty concerning responsibility
may also permit them to escape accountability. Id., at
182. If a program is popular, state officials may claim
credit; if it is unpopular, they may protest that they were
merely responding to a federal directive.
Once it is recognized that spending-power legislation
cannot coerce state participation, two questions remain:
(1) What is the meaning of coercion in this context? (2) Is
the ACA’s expanded Medicaid coverage coercive? We now
turn to those questions.
D
1
The answer to the first of these questions—the meaning
of coercion in the present context—is straightforward. As
we have explained, the legitimacy of attaching conditions
to federal grants to the States depends on the voluntari-
ness of the States’ choice to accept or decline the offered
package. Therefore, if States really have no choice other
than to accept the package, the offer is coercive, and the
conditions cannot be sustained under the spending power.
And as our decision in South Dakota v. Dole makes clear,
theoretical voluntariness is not enough.
In South Dakota v. Dole, we considered whether the
spending power permitted Congress to condition 5% of the
36
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State’s federal highway funds on the State’s adoption of
a minimum drinking age of 21 years. South Dakota ar-
gued that the program was impermissibly coercive, but we
disagreed, reasoning that “Congress ha[d] directed only
that a State desiring to establish a minimum drinking age
lower than 21 lose a relatively small percentage of certain
federal highway funds.” 483 U. S., at 211. Because “all
South Dakota would lose if she adhere[d] to her chosen
course as to a suitable minimum drinking age [was] 5%
of the funds otherwise obtainable under specified high-
way grant programs,” we found that “Congress ha[d] of-
fered relatively mild encouragement to the States to enact
higher minimum drinking ages than they would otherwise
choose.” Ibid. Thus, the decision whether to comply with
the federal condition “remain[ed] the prerogative of the
States not merely in theory but in fact,” and so the pro-
gram at issue did not exceed Congress’ power. Id., at 211–
212 (emphasis added).
The question whether a law enacted under the spending
power is coercive in fact will sometimes be difficult, but
where Congress has plainly “crossed the line distinguish-
ing encouragement from coercion,” New York, supra, at
175, a federal program that coopts the States’ political
processes must be declared unconstitutional. “[T]he fed-
eral balance is too essential a part of our constitutional
structure and plays too vital a role in securing freedom for
us to admit inability to intervene.” Lopez, 514 U. S., at
578 (KENNEDY, J., concurring).
2
The Federal Government’s argument in this case at best
pays lip service to the anticoercion principle. The Federal
Government suggests that it is sufficient if States are
“free, as a matter of law, to turn down” federal funds.
Brief for Respondents in No. 11–400, p. 17 (emphasis
added); see also id., at 25. According to the Federal Gov-
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ernment, neither the amount of the offered federal funds
nor the amount of the federal taxes extracted from the
taxpayers of a State to pay for the program in question is
relevant in determining whether there is impermissible
coercion. Id., at 41–46.
This argument ignores reality. When a heavy federal
tax is levied to support a federal program that offers large
grants to the States, States may, as a practical matter, be
unable to refuse to participate in the federal program and
to substitute a state alternative. Even if a State believes
that the federal program is ineffective and inefficient,
withdrawal would likely force the State to impose a huge
tax increase on its residents, and this new state tax would
come on top of the federal taxes already paid by residents
to support subsidies to participating States.13
Acceptance of the Federal Government’s interpreta-
tion of the anticoercion rule would permit Congress to dic-
tate policy in areas traditionally governed primarily at the
state or local level. Suppose, for example, that Congress
enacted legislation offering each State a grant equal to the
State’s entire annual expenditures for primary and sec-
ondary education. Suppose also that this funding came
with conditions governing such things as school curricu-
lum, the hiring and tenure of teachers, the drawing of
school districts, the length and hours of the school day, the
——————
13
JUSTICE GINSBURG argues that “[a] State . . . has no claim on the
money its residents pay in federal taxes.” Ante, at 59, n. 26. This is
true as a formal matter. “When the United States Government taxes
United States citizens, it taxes them ‘in their individual capacities’ as
‘the people of America’—not as residents of a particular State.” Ante, at
58, n. 26 (quoting U. S. Term Limits, Inc. v. Thornton, 514 U. S. 779,
839 (1995) (KENNEDY, J., concurring)). But unless JUSTICE GINSBURG
thinks that there is no limit to the amount of money that can be
squeezed out of taxpayers, heavy federal taxation diminishes the
practical ability of States to collect their own taxes.
38
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school calendar, a dress code for students, and rules for
student discipline. As a matter of law, a State could turn
down that offer, but if it did so, its residents would not
only be required to pay the federal taxes needed to support
this expensive new program, but they would also be forced
to pay an equivalent amount in state taxes. And if the
State gave in to the federal law, the State and its subdivi-
sions would surrender their traditional authority in the
field of education. Asked at oral argument whether such
a law would be allowed under the spending power, the
Solicitor General responded that it would. Tr. of Oral Arg.
44–45 (Mar. 28, 2012).
E
Whether federal spending legislation crosses the line
from enticement to coercion is often difficult to determine,
and courts should not conclude that legislation is uncon-
stitutional on this ground unless the coercive nature of an
offer is unmistakably clear. In this case, however, there
can be no doubt. In structuring the ACA, Congress unam-
biguously signaled its belief that every State would have
no real choice but to go along with the Medicaid Expan-
sion. If the anticoercion rule does not apply in this case,
then there is no such rule.
1
The dimensions of the Medicaid program lend strong
support to the petitioner States’ argument that refusing to
accede to the conditions set out in the ACA is not a realis-
tic option. Before the ACA’s enactment, Medicaid funded
medical care for pregnant women, families with depend-
ents, children, the blind, the elderly, and the disabled. See
42 U. S. C. §1396a(a)(10) (2006 ed., Supp. IV). The ACA
greatly expands the program’s reach, making new funds
available to States that agree to extend coverage to all
individuals who are under age 65 and have incomes below
39
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SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
133% of the federal poverty line. See §1396a(a)
(10)(A)(i)(VIII). Any State that refuses to expand
its Medicaid programs in this way is threatened with a
severe sanction: the loss of all its federal Medicaid funds.
See §1396c (2006 ed.).
Medicaid has long been the largest federal program of
grants to the States. See Brief for Respondents in No. 11–
400, at 37. In 2010, the Federal Government directed
more than $552 billion in federal funds to the States. See
Nat. Assn. of State Budget Officers, 2010 State Expendi-
ture Report: Examining Fiscal 2009–2011 State Spending,
p. 7 (2011) (NASBO Report). Of this, more than $233
billion went to pre-expansion Medicaid. See id., at 47.14
This amount equals nearly 22% of all state expenditures
combined. See id., at 7.
The States devote a larger percentage of their budgets
to Medicaid than to any other item. Id., at 5. Federal
funds account for anywhere from 50% to 83% of each
State’s total Medicaid expenditures, see §1396d(b) (2006 ed.,
Supp. IV); most States receive more than $1 billion in
federal Medicaid funding; and a quarter receive more than
——————
14
The Federal Government has a higher number for federal spending
on Medicaid. According to the Office of Management and Budget,
federal grants to the States for Medicaid amounted to nearly $273
billion in Fiscal Year 2010. See Office of Management and Bud-
get, Historical Tables, Budget of the U. S. Government, Fiscal Year
2013, Table 12.3—Total Outlays for Grants to State and Local Gov-
ernments by Function, Agency, and Program: 1940–2013, http://
www.whitehouse.gov/omb/budget/Historicals. In that Fiscal Year, total
federal outlays for grants to state and local governments amounted to
over $608 billion, see Table 12.1, and state and local government
expenditures from their own sources amounted to $1.6 trillion, see
Table 15.2. Using these numbers, 44.8% of all federal outlays to both
state and local governments was allocated to Medicaid, amounting to
16.8% of all state and local expenditures from their own sources.
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$5 billion, NASBO Report 47. These federal dollars total
nearly two thirds—64.6%—of all Medicaid expenditures
nationwide.15 Id., at 46.
The Court of Appeals concluded that the States failed to
establish coercion in this case in part because the “states
have the power to tax and raise revenue, and therefore can
create and fund programs of their own if they do not like
Congress’s terms.” 648 F. 3d 1235, 1268 (CA11 2011); see
Brief for Sen. Harry Reid et al. as Amici Curiae in No. 11–
400, p. 21 (“States may always choose to decrease expendi-
tures on other programs or to raise revenues”). But the
sheer size of this federal spending program in relation to
state expenditures means that a State would be very hard
pressed to compensate for the loss of federal funds by
cutting other spending or raising additional revenue.
Arizona, for example, commits 12% of its state expendi-
tures to Medicaid, and relies on the Federal Government
to provide the rest: $5.6 billion, equaling roughly one-third
of Arizona’s annual state expenditures of $17 billion. See
NASBO Report 7, 47. Therefore, if Arizona lost federal
Medicaid funding, the State would have to commit an
additional 33% of all its state expenditures to fund an
equivalent state program along the lines of pre-expansion
Medicaid. This means that the State would have to allo-
cate 45% of its annual expenditures for that one purpose.
See ibid.
The States are far less reliant on federal funding for any
other program. After Medicaid, the next biggest federal
——————
15
The Federal Government reports a higher percentage. According
to Medicaid.gov, in Fiscal Year 2010, the Federal Government made
Medicaid payments in the amount of nearly $260 billion, repre-
senting 67.79% of total Medicaid payments of $383 billion. See
www.medicaid.gov/Medicaid-CHIP-Program-Information /By-State/By-\\ State.html.
41
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SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
funding item is aid to support elementary and secondary
education, which amounts to 12.8% of total federal outlays
to the States, see id., at 7, 16, and equals only 6.6% of
all state expenditures combined. See ibid. In Arizona,
for example, although federal Medicaid expenditures are
equal to 33% of all state expenditures, federal education
funds amount to only 9.8% of all state expenditures. See
ibid. And even in States with less than average federal
Medicaid funding, that funding is at least twice the size of
federal education funding as a percentage of state expend-
itures. Id., at 7, 16, 47.
A State forced out of the Medicaid program would face
burdens in addition to the loss of federal Medicaid fund-
ing. For example, a nonparticipating State might be found
to be ineligible for other major federal funding sources,
such as Temporary Assistance for Needy Families (TANF),
which is premised on the expectation that States will
participate in Medicaid. See 42 U. S. C. §602(a)(3) (2006
ed.) (requiring that certain beneficiaries of TANF funds be
“eligible for medical assistance under the State[’s Medi-
caid] plan”). And withdrawal or expulsion from the Medi-
caid program would not relieve a State’s hospitals of their
obligation under federal law to provide care for patients
who are unable to pay for medical services. The Emer-
gency Medical Treatment and Active Labor Act, §1395dd,
requires hospitals that receive any federal funding to
provide stabilization care for indigent patients but does
not offer federal funding to assist facilities in carrying out
its mandate. Many of these patients are now covered by
Medicaid. If providers could not look to the Medicaid
program to pay for this care, they would find it exceed-
ingly difficult to comply with federal law unless they were
given substantial state support. See, e.g., Brief for Econ-
omists as Amici Curiae in No 11–400, p. 11.
For these reasons, the offer that the ACA makes to the
States—go along with a dramatic expansion of Medicaid or
42
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potentially lose all federal Medicaid funding—is quite
unlike anything that we have seen in a prior spending-
power case. In South Dakota v. Dole, the total amount
that the States would have lost if every single State
had refused to comply with the 21-year-old drinking
age was approximately $614.7 million—or about 0.19%
of all state expenditures combined. See Nat. Assn.
of State Budget Officers, 1989 (Fiscal Years 1987–
1989 Data) State Expenditure Report 10, 84 (1989),
http:%%//%%www.nasbo.org/publications-data/state-expenditure-\\
report/archives. South Dakota stood to lose, at most,
funding that amounted to less than 1% of its annual state
expenditures. See ibid. Under the ACA, by contrast, the
Federal Government has threatened to withhold 42.3% of
all federal outlays to the states, or approximately $233
billion. See NASBO Report 7, 10, 47. South Dakota
stands to lose federal funding equaling 28.9% of its annual
state expenditures. See id., at 7, 47. Withholding $614.7
million, equaling only 0.19% of all state expenditures
combined, is aptly characterized as “relatively mild en-
couragement,” but threatening to withhold $233 billion,
equaling 21.86% of all state expenditures combined, is a
different matter.
2
What the statistics suggest is confirmed by the goal
and structure of the ACA. In crafting the ACA, Congress
clearly expressed its informed view that no State could
possibly refuse the offer that the ACA extends.
The stated goal of the ACA is near-universal health care
coverage. To achieve this goal, the ACA mandates that
every person obtain a minimum level of coverage. It at-
tempts to reach this goal in several different ways. The
guaranteed issue and community-rating provisions are
designed to make qualifying insurance available and
affordable for persons with medical conditions that may
43
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SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
require expensive care. Other ACA provisions seek to
make such policies more affordable for people of modest
means. Finally, for low-income individuals who are
simply not able to obtain insurance, Congress expanded
Medicaid, transforming it from a program covering only
members of a limited list of vulnerable groups into a pro-
gram that provides at least the requisite minimum level
of coverage for the poor. See 42 U. S. C. §§1396a(a)
(10)(A)(i)(VIII) (2006 ed., Supp. IV), 1396u–7(a), (b)(5),
18022(a). This design was intended to provide at least
a specified minimum level of coverage for all Americans,
but the achievement of that goal obviously depends on
participation by every single State. If any State—not
to mention all of the 26 States that brought this suit—
chose to decline the federal offer, there would be a gaping
hole in the ACA’s coverage.
It is true that some persons who are eligible for Medi-
caid coverage under the ACA may be able to secure private
insurance, either through their employers or by obtain-
ing subsidized insurance through an exchange. See 26
U. S. C. §36B(a) (2006 ed., Supp. IV); Brief for Respond-
ents in No. 11–400, at 12. But the new federal subsidies
are not available to those whose income is below the fed-
eral poverty level, and the ACA provides no means, other
than Medicaid, for these individuals to obtain coverage
and comply with the Mandate. The Government counters
that these people will not have to pay the penalty, see, e.g.,
Tr. of Oral Arg. 68 (Mar. 28, 2012); Brief for Respondents
in No. 11–400, at 49–50, but that argument misses the
point: Without Medicaid, these individuals will not have
coverage and the ACA’s goal of near-universal coverage
will be severely frustrated.
If Congress had thought that States might actually
refuse to go along with the expansion of Medicaid, Con-
gress would surely have devised a backup scheme so that
the most vulnerable groups in our society, those previously
44
NATIONAL FEDERATION OF INDEPENDENT
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v. SEBELIUS
SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
eligible for Medicaid, would not be left out in the cold. But
nowhere in the over 900-page Act is such a scheme to be
found. By contrast, because Congress thought that some
States might decline federal funding for the operation of
a “health benefit exchange,” Congress provided a backup
scheme; if a State declines to participate in the operation
of an exchange, the Federal Government will step in
and operate an exchange in that State. See 42 U. S. C.
§18041©(1). Likewise, knowing that States would not
necessarily provide affordable health insurance for aliens
lawfully present in the United States—because Medicaid
does not require States to provide such coverage—Con-
gress extended the availability of the new federal insur-
ance subsidies to all aliens. See 26 U. S. C. §36B©
(1)(B)(ii) (excepting from the income limit individuals
who are “not eligible for the medicaid program . . . by
reason of [their] alien status”). Congress did not make
these subsidies available for citizens with incomes below
the poverty level because Congress obviously assumed
that they would be covered by Medicaid. If Congress had
contemplated that some of these citizens would be left
without Medicaid coverage as a result of a State’s with-
drawal or expulsion from the program, Congress surely
would have made them eligible for the tax subsidies pro-
vided for low-income aliens.
These features of the ACA convey an unmistakable
message: Congress never dreamed that any State would
refuse to go along with the expansion of Medicaid. Con-
gress well understood that refusal was not a practical
option.
The Federal Government does not dispute the inference
that Congress anticipated 100% state participation, but it
argues that this assumption was based on the fact that
ACA’s offer was an “exceedingly generous” gift. Brief for
Respondents in No. 11–400, at 50. As the Federal Gov-
ernment sees things, Congress is like the generous bene-
45
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factor who offers $1 million with few strings attached to
50 randomly selected individuals. Just as this benefactor
might assume that all of these 50 individuals would snap
up his offer, so Congress assumed that every State would
gratefully accept the federal funds (and conditions) to go
with the expansion of Medicaid.
This characterization of the ACA’s offer raises obvious
questions. If that offer is “exceedingly generous,” as the
Federal Government maintains, why have more than half
the States brought this lawsuit, contending that the offer
is coercive? And why did Congress find it necessary to
threaten that any State refusing to accept this “exceed-
ingly generous” gift would risk losing all Medicaid funds?
Congress could have made just the new funding provided
under the ACA contingent on acceptance of the terms of
the Medicaid Expansion. Congress took such an approach
in some earlier amendments to Medicaid, separating new
coverage requirements and funding from the rest of the
program so that only new funding was conditioned on new
eligibility extensions. See, e.g., Social Security Amend-
ments of 1972, 86 Stat. 1465.
Congress’ decision to do otherwise here reflects its un-
derstanding that the ACA offer is not an “exceedingly
generous” gift that no State in its right mind would de-
cline. Instead, acceptance of the offer will impose very
substantial costs on participating States. It is true that
the Federal Government will bear most of the initial costs
associated with the Medicaid Expansion, first paying
100% of the costs of covering newly eligible individuals
between 2014 and 2016. 42 U. S. C. §1396d(y). But that
is just part of the picture. Participating States will be
forced to shoulder substantial costs as well, because after
2019 the Federal Government will cover only 90% of the
costs associated with the Expansion, see ibid., with state
spending projected to increase by at least $20 billion by
2020 as a consequence. Statement of Douglas W. Elmen-
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NATIONAL FEDERATION OF INDEPENDENT
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dorf, CBO’s Analysis of the Major Health Care Legislation
Enacted in March 2010, p. 24 (Mar. 30, 2011); see also R.
Bovbjerg, B. Ormond, & V. Chen, Kaiser Commission on
Medicaid and the Uninsured, State Budgets under Federal
Health Reform: The Extent and Causes of Variations in
Estimated Impacts 4, n. 27 (Feb. 2011) (estimating new
state spending at $43.2 billion through 2019). After 2019,
state spending is expected to increase at a faster rate; the
CBO estimates new state spending at $60 billion through
2021. Statement of Douglas W. Elmendorf, supra, at 24.
And these costs may increase in the future because of
the very real possibility that the Federal Government will
change funding terms and reduce the percentage of funds
it will cover. This would leave the States to bear an in-
creasingly large percentage of the bill. See Tr. of Oral
Arg. 74–76 (Mar. 28, 2012). Finally, after 2015, the States
will have to pick up the tab for 50% of all administrative
costs associated with implementing the new program, see
§§1396b(a)(2)–(5), (7) (2006 ed., Supp. IV), costs that could
approach $12 billion between fiscal years 2014 and 2020,
see Dept. of Health and Human Services, Center for Medi-
caid and Medicare Services, 2010 Actuarial Report on the
Financial Outlook for Medicaid 30.
In sum, it is perfectly clear from the goal and structure
of the ACA that the offer of the Medicaid Expansion was
one that Congress understood no State could refuse. The
Medicaid Expansion therefore exceeds Congress’ spending
power and cannot be implemented.
F
Seven Members of the Court agree that the Medicaid
Expansion, as enacted by Congress, is unconstitutional.
See Part IV–A to IV–E, supra; Part IV–A, ante, at 45–55
(opinion of ROBERTS, C. J., joined by BREYER and KAGAN,
JJ.). Because the Medicaid Expansion is unconstitutional,
the question of remedy arises. The most natural remedy
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would be to invalidate the Medicaid Expansion. However,
the Government proposes—in two cursory sentences at
the very end of its brief—preserving the Expansion. Under
its proposal, States would receive the additional Medi-
caid funds if they expand eligibility, but States would
keep their pre-existing Medicaid funds if they do not
expand eligibility. We cannot accept the Government’s
suggestion.
The reality that States were given no real choice but to
expand Medicaid was not an accident. Congress assumed
States would have no choice, and the ACA depends on
States’ having no choice, because its Mandate requires
low-income individuals to obtain insurance many of them
can afford only through the Medicaid Expansion. Fur-
thermore, a State’s withdrawal might subject everyone in
the State to much higher insurance premiums. That is
because the Medicaid Expansion will no longer offset the
cost to the insurance industry imposed by the ACA’s in-
surance regulations and taxes, a point that is explained in
more detail in the severability section below. To make the
Medicaid Expansion optional despite the ACA’s structure
and design “ ‘would be to make a new law, not to enforce
an old one. This is no part of our duty.’ ” Trade-Mark
Cases, 100 U. S. 82, 99 (1879).
Worse, the Government’s proposed remedy introduces a
new dynamic: States must choose between expanding
Medicaid or paying huge tax sums to the federal fisc for
the sole benefit of expanding Medicaid in other States. If
this divisive dynamic between and among States can be
introduced at all, it should be by conscious congressional
choice, not by Court-invented interpretation. We do not
doubt that States are capable of making decisions when
put in a tight spot. We do doubt the authority of this
Court to put them there.
The Government cites a severability clause codified with
Medicaid in Chapter 7 of the United States Code stating
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that if “any provision of this chapter, or the application
thereof to any person or circumstance, is held invalid, the
remainder of the chapter, and the application of such
provision to other persons or circumstances shall not be
affected thereby.” 42 U. S. C. §1303 (2006 ed.). But that
clause tells us only that other provisions in Chapter 7
should not be invalidated if §1396c, the authorization for
the cut-off of all Medicaid funds, is unconstitutional. It
does not tell us that §1396c can be judicially revised, to
say what it does not say. Such a judicial power would
not be called the doctrine of severability but perhaps
the doctrine of amendatory invalidation—similar to the
amendatory veto that permits the Governors of some
States to reduce the amounts appropriated in legislation.
The proof that such a power does not exist is the fact that
it would not preserve other congressional dispositions, but
would leave it up to the Court what the “validated” legis-
lation will contain. The Court today opts for permitting
the cut-off of only incremental Medicaid funding, but it
might just as well have permitted, say, the cut-off of funds
that represent no more than x percent of the State’s bud-
get. The Court severs nothing, but simply revises §1396c to
read as the Court would desire.
We should not accept the Government’s invitation to
attempt to solve a constitutional problem by rewriting the
Medicaid Expansion so as to allow States that reject it
to retain their pre-existing Medicaid funds. Worse, the
Government’s remedy, now adopted by the Court, takes
the ACA and this Nation in a new direction and charts a
course for federalism that the Court, not the Congress, has
chosen; but under the Constitution, that power and au-
thority do not rest with this Court.
V
Severability
The Affordable Care Act seeks to achieve “near-
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universal” health insurance coverage. §18091(2)(D) (2006
ed., Supp. IV). The two pillars of the Act are the Individ-
ual Mandate and the expansion of coverage under Medicaid.
In our view, both these central provisions of the Act—the
Individual Mandate and Medicaid Expansion—are invalid.
It follows, as some of the parties urge, that all other provi-
sions of the Act must fall as well. The following section
explains the severability principles that require this con-
clusion. This analysis also shows how closely interrelated
the Act is, and this is all the more reason why it is judicial
usurpation to impose an entirely new mechanism for
withdrawal of Medicaid funding, see Part IV–F, supra,
which is one of many examples of how rewriting the Act
alters its dynamics.
A
When an unconstitutional provision is but a part of a
more comprehensive statute, the question arises as to the
validity of the remaining provisions. The Court’s author-
ity to declare a statute partially unconstitutional has been
well established since Marbury v. Madison, 1 Cranch 137
(1803), when the Court severed an unconstitutional provi-
sion from the Judiciary Act of 1789. And while the Court
has sometimes applied “at least a modest presumption in
favor of . . . severability,” C. Nelson, Statutory Interpreta-
tion 144 (2010), it has not always done so, see, e.g., Minne-
sota v. Mille Lacs Band of Chippewa Indians, 526 U. S.
172, 190–195 (1999).
An automatic or too cursory severance of statutory
provisions risks “rewrit[ing] a statute and giv[ing] it an
effect altogether different from that sought by the meas-
ure viewed as a whole.” Railroad Retirement Bd. v. Alton
R. Co., 295 U. S. 330, 362 (1935). The Judiciary, if it
orders uncritical severance, then assumes the legislative
function; for it imposes on the Nation, by the Court’s
decree, its own new statutory regime, consisting of poli-
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cies, risks, and duties that Congress did not enact. That
can be a more extreme exercise of the judicial power than
striking the whole statute and allowing Congress to ad-
dress the conditions that pertained when the statute was
considered at the outset.
The Court has applied a two-part guide as the frame-
work for severability analysis. The test has been deemed
“well established.” Alaska Airlines, Inc. v. Brock, 480
U. S. 678, 684 (1987). First, if the Court holds a statutory
provision unconstitutional, it then determines whether
the now truncated statute will operate in the manner Con-
gress intended. If not, the remaining provisions must be
invalidated. See id., at 685. In Alaska Airlines, the Court
clarified that this first inquiry requires more than ask-
ing whether “the balance of the legislation is incapable of
functioning independently.” Id., at 684. Even if the re-
maining provisions will operate in some coherent way,
that alone does not save the statute. The question is
whether the provisions will work as Congress intended.
The “relevant inquiry in evaluating severability is whether
the statute will function in a manner consistent with
the intent of Congress.” Id., at 685 (emphasis in original).
See also Free Enterprise Fund v. Public Company Account-
ing Oversight Bd., 561 U. S. ___, ___ (2010) (slip op., at
28) (the Act “remains fully operative as a law with these
tenure restrictions excised”) (internal quotation marks
omitted); United States v. Booker, 543 U. S. 220, 227
(2005) (“[T]wo provisions . . . must be invalidated in order
to allow the statute to operate in a manner consistent
with congressional intent”); Mille Lacs, supra, at 194 (“[E]m-
bodying as it did one coherent policy, [the entire order]
is inseverable”).
Second, even if the remaining provisions can operate as
Congress designed them to operate, the Court must de-
termine if Congress would have enacted them standing
alone and without the unconstitutional portion. If Con-
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SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
gress would not, those provisions, too, must be invalidated.
See Alaska Airlines, supra, at 685 (“[T]he unconstitu-
tional provision must be severed unless the statute cre-
ated in its absence is legislation that Congress would not
have enacted”); see also Free Enterprise Fund, supra, at
___ (slip op., at 29) (“[N]othing in the statute’s text or
historical context makes it ‘evident’ that Congress, faced
with the limitations imposed by the Constitution, would
have preferred no Board at all to a Board whose members
are removable at will”); Ayotte v. Planned Parenthood of
Northern New Eng., 546 U. S. 320, 330 (2006) (“Would the
legislature have preferred what is left of its statute to no
statute at all”); Denver Area Ed. Telecommunications
Consortium, Inc. v. FCC, 518 U. S. 727, 767 (1996) (plural-
ity opinion) (“Would Congress still have passed §10(a) had
it known that the remaining provisions were invalid”
(internal quotation marks and brackets omitted)).
The two inquiries—whether the remaining provisions
will operate as Congress designed them, and whether
Congress would have enacted the remaining provisions
standing alone—often are interrelated. In the ordinary
course, if the remaining provisions cannot operate accord-
ing to the congressional design (the first inquiry), it almost
necessarily follows that Congress would not have enacted
them (the second inquiry). This close interaction may
explain why the Court has not always been precise in
distinguishing between the two. There are, however,
occasions in which the severability standard’s first inquiry
(statutory functionality) is not a proxy for the second
inquiry (whether the Legislature intended the remaining
provisions to stand alone).
B
The Act was passed to enable affordable, “near-universal”
health insurance coverage. 42 U. S. C. §18091(2)(D).
The resulting, complex statute consists of mandates and
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other requirements; comprehensive regulation and penal-
ties; some undoubted taxes; and increases in some gov-
ernmental expenditures, decreases in others. Under the
severability test set out above, it must be determined if
those provisions function in a coherent way and as Con-
gress would have intended, even when the major provi-
sions establishing the Individual Mandate and Medicaid
Expansion are themselves invalid.
Congress did not intend to establish the goal of near-
universal coverage without regard to fiscal consequences.
See, e.g., ACA §1563, 124 Stat. 270 (“[T]his Act will reduce
the Federal deficit between 2010 and 2019”). And it did
not intend to impose the inevitable costs on any one indus-
try or group of individuals. The whole design of the Act
is to balance the costs and benefits affecting each set
of regulated parties. Thus, individuals are required to
obtain health insurance. See 26 U. S. C. §5000A(a). Insur-
ance companies are required to sell them insurance re-
gardless of patients’ pre-existing conditions and to comply
with a host of other regulations. And the companies must
pay new taxes. See §4980I (high-cost insurance plans);
42 U. S. C. §§300gg(a)(1), 300gg–4(b) (community rating);
§§300gg–1, 300gg–3, 300gg–4(a) (guaranteed issue);
§300gg–11 (elimination of coverage limits); §300gg–14(a)
(dependent children up to age 26); ACA §§9010, 10905,
124 Stat. 865, 1017 (excise tax); Health Care and Educa-
tion Reconciliation Act of 2010 (HCERA) §1401, 124 Stat.
1059 (excise tax). States are expected to expand Medicaid
eligibility and to create regulated marketplaces called ex-
changes where individuals can purchase insurance. See
42 U. S. C. §§1396a(a)(10)(A)(i)(VIII) (2006 ed., Supp. IV)
(Medicaid Expansion), 18031 (exchanges). Some persons
who cannot afford insurance are provided it through the
Medicaid Expansion, and others are aided in their pur-
chase of insurance through federal subsidies available on
health-insurance exchanges. See 26 U. S. C. §36B (2006
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SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
ed., Supp. IV), 42 U. S. C. §18071 (2006 ed., Supp. IV)
(federal subsidies). The Federal Government’s increased
spending is offset by new taxes and cuts in other federal
expenditures, including reductions in Medicare and in
federal payments to hospitals. See, e.g., §1395ww® (Med-
icare cuts); ACA Title IX, Subtitle A, 124 Stat. 847 (“Rev-
enue Offset Provisions”). Employers with at least 50
employees must either provide employees with adequate
health benefits or pay a financial exaction if an employee
who qualifies for federal subsidies purchases insurance
through an exchange. See 26 U. S. C. §4980H (2006 ed.,
Supp. IV).
In short, the Act attempts to achieve near-universal
health insurance coverage by spreading its costs to indi-
viduals, insurers, governments, hospitals, and employers—
while, at the same time, offsetting significant portions
of those costs with new benefits to each group. For ex-
ample, the Federal Government bears the burden of pay-
ing billions for the new entitlements mandated by the
Medicaid Expansion and federal subsidies for insurance
purchases on the exchanges; but it benefits from reduc-
tions in the reimbursements it pays to hospitals. Hospi-
tals lose those reimbursements; but they benefit from the
decrease in uncompensated care, for under the insurance
regulations it is easier for individuals with pre-existing
conditions to purchase coverage that increases payments
to hospitals. Insurance companies bear new costs imposed
by a collection of insurance regulations and taxes, including
“guaranteed issue” and “community rating” requirements
to give coverage regardless of the insured’s pre-existing
conditions; but the insurers benefit from the new, healthy
purchasers who are forced by the Individual Mandate
to buy the insurers’ product and from the new low-
income Medicaid recipients who will enroll in insurance
companies’ Medicaid-funded managed care programs. In
summary, the Individual Mandate and Medicaid Expan-
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sion offset insurance regulations and taxes, which offset
reduced reimbursements to hospitals, which offset in-
creases in federal spending. So, the Act’s major provisions
are interdependent.
The Act then refers to these interdependencies as
“shared responsibility.” See ACA Subtitle F, Title I, 124
Stat. 242 (“Shared Responsibility”); ACA §1501, ibid.
(same); ACA §1513, id., at 253 (same); ACA §4980H, ibid.
(same). In at least six places, the Act describes the Indi-
vidual Mandate as working “together with the other pro-
visions of this Act.” 42 U. S. C. §18091(2)(C) (2006 ed.,
Supp. IV) (working “together” to “add millions of new
consumers to the health insurance market”); §18091(2)(E)
(working “together” to “significantly reduce” the economic
cost of the poorer health and shorter lifespan of the unin-
sured); §18091(2)(F) (working “together” to “lower health
insurance premiums”); §18091(2)(G) (working “together” to
“improve financial security for families”); §18091(2)(I)
(working “together” to minimize “adverse selection and
broaden the health insurance risk pool to include healthy
individuals”); §18091(2)(J) (working “together” to “signif-
icantly reduce administrative costs and lower health
insurance premiums”). The Act calls the Individual Man-
date “an essential part” of federal regulation of health
insurance and warns that “the absence of the requirement
would undercut Federal regulation of the health insurance
market.” §18091(2)(H).
C
One preliminary point should be noted before applying
severability principles to the Act. To be sure, an argument
can be made that those portions of the Act that none of the
parties has standing to challenge cannot be held nonse-
verable. The response to this argument is that our cases
do not support it. See, e.g., Williams v. Standard Oil Co.
of La., 278 U. S. 235, 242–244 (1929) (holding nonsever-
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able statutory provisions that did not burden the parties).
It would be particularly destructive of sound government
to apply such a rule with regard to a multifaceted piece of
legislation like the ACA. It would take years, perhaps
decades, for each of its provisions to be adjudicated sepa-
rately—and for some of them (those simply expending
federal funds) no one may have separate standing. The
Federal Government, the States, and private parties ought
to know at once whether the entire legislation fails.
The opinion now explains in Part V–C–1, infra, why the
Act’s major provisions are not severable from the Mandate
and Medicaid Expansion. It proceeds from the insurance
regulations and taxes (C–1–a), to the reductions in reim-
bursements to hospitals and other Medicare reductions
(C–1–b), the exchanges and their federal subsidies (C–1–c),
and the employer responsibility assessment (C–1–d).
Part V–C–2, infra, explains why the Act’s minor provi-
sions also are not severable.
1
The Act’s Major Provisions
Major provisions of the Affordable Care Act—i.e., the
insurance regulations and taxes, the reductions in federal
reimbursements to hospitals and other Medicare spend-
ing reductions, the exchanges and their federal subsidies,
and the employer responsibility assessment—cannot remain
once the Individual Mandate and Medicaid Expansion are
invalid. That result follows from the undoubted inability
of the other major provisions to operate as Congress in-
tended without the Individual Mandate and Medicaid
Expansion. Absent the invalid portions, the other major
provisions could impose enormous risks of unexpected bur-
dens on patients, the health-care community, and the
federal budget. That consequence would be in absolute
conflict with the ACA’s design of “shared responsibility,”
and would pose a threat to the Nation that Congress did
56
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not intend.
a
Insurance Regulations and Taxes
Without the Individual Mandate and Medicaid Expan-
sion, the Affordable Care Act’s insurance regulations and
insurance taxes impose risks on insurance companies and
their customers that this Court cannot measure. Those
risks would undermine Congress’ scheme of “shared re-
sponsibility.” See 26 U. S. C. §4980I (2006 ed., Supp.
IV) (high-cost insurance plans); 42 U. S. C. §§300gg(a)(1)
(2006 ed., Supp. IV), 300gg–4(b) (community rating);
§§300gg–1, 300gg–3, 300gg–4(a) (guaranteed issue);
§300gg–11 (elimination of coverage limits); §300gg–14(a)
(dependent children up to age 26); ACA §§9010, 10905,
124 Stat. 865, 1017 (excise tax); HCERA §1401, 124 Stat.
1059 (excise tax).
The Court has been informed by distinguished econo-
mists that the Act’s Individual Mandate and Medicaid
Expansion would each increase revenues to the insurance
industry by about $350 billion over 10 years; that this
combined figure of $700 billion is necessary to offset the
approximately $700 billion in new costs to the insurance
industry imposed by the Act’s insurance regulations and
taxes; and that the new $700-billion burden would other-
wise dwarf the industry’s current profit margin. See Brief
for Economists as Amici Curiae in No. 11–393 etc. (Sever-
ability), pp. 9–16, 10a.
If that analysis is correct, the regulations and taxes will
mean higher costs for insurance companies. Higher costs
may mean higher premiums for consumers, despite the
Act’s goal of “lower[ing] health insurance premiums.” 42
U. S. C. §18091(2)(F) (2006 ed., Supp. IV). Higher costs
also could threaten the survival of health-insurance com-
panies, despite the Act’s goal of “effective health insurance
markets.” §18091(2)(J).
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The actual cost of the regulations and taxes may be
more or less than predicted. What is known, however, is
that severing other provisions from the Individual Man-
date and Medicaid Expansion necessarily would impose
significant risks and real uncertainties on insurance com-
panies, their customers, all other major actors in the sys-
tem, and the government treasury. And what also is
known is this: Unnecessary risks and avoidable uncertain-
ties are hostile to economic progress and fiscal stability
and thus to the safety and welfare of the Nation and the
Nation’s freedom. If those risks and uncertainties are to
be imposed, it must not be by the Judiciary.
b
Reductions in Reimbursements to Hospitals and
Other Reductions in Medicare Expenditures
The Affordable Care Act reduces payments by the Fed-
eral Government to hospitals by more than $200 billion
over 10 years. See 42 U. S. C. §1395ww(b)(3)(B)(xi)–(xii)
(2006 ed., Supp. IV); §1395ww(q); §1395ww®; §1396r–
4(f)(7).
The concept is straightforward: Near-universal coverage
will reduce uncompensated care, which will increase hos-
pitals’ revenues, which will offset the government’s re-
ductions in Medicare and Medicaid reimbursements to
hospitals. Responsibility will be shared, as burdens and
benefits balance each other. This is typical of the whole
dynamic of the Act.
Invalidating the key mechanisms for expanding insur-
ance coverage, such as community rating and the Medi-
caid Expansion, without invalidating the reductions in
Medicare and Medicaid, distorts the ACA’s design of
“shared responsibility.” Some hospitals may be forced to
raise the cost of care in order to offset the reductions in
reimbursements, which could raise the cost of insurance
premiums, in contravention of the Act’s goal of “lower[ing]
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health insurance premiums.” 42 U. S. C. §18091(2)(F)
(2006 ed., Supp. IV). See also §18091(2)(I) (goal of
“lower[ing] health insurance premiums”); §18091(2)(J)
(same). Other hospitals, particularly safety-net hospitals that
serve a large number of uninsured patients, may be forced
to shut down. Cf. National Assn. of Public Hospitals, 2009
Annual Survey: Safety Net Hospitals and Health Systems
Fulfill Mission in Uncertain Times 5–6 (Feb. 2011). Like
the effect of preserving the insurance regulations and
taxes, the precise degree of risk to hospitals is unknow-
able. It is not the proper role of the Court, by severing
part of a statute and allowing the rest to stand, to impose
unknowable risks that Congress could neither measure
nor predict. And Congress could not have intended that
result in any event.
There is a second, independent reason why the reduc-
tions in reimbursements to hospitals and the ACA’s other
Medicare cuts must be invalidated. The ACA’s $455 bil-
lion in Medicare and Medicaid savings offset the $434-
billion cost of the Medicaid Expansion. See CBO Esti-
mate, Table 2 (Mar. 20, 2010). The reductions allowed
Congress to find that the ACA “will reduce the Federal
deficit between 2010 and 2019” and “will continue to
reduce budget deficits after 2019.” ACA §§1563(a)(1), (2),
124 Stat. 270.
That finding was critical to the ACA. The Act’s “shared
responsibility” concept extends to the federal budget.
Congress chose to offset new federal expenditures with
budget cuts and tax increases. That is why the United
States has explained in the course of this litigation that
“[w]hen Congress passed the ACA, it was careful to ensure
that any increased spending, including on Medicaid, was
offset by other revenue-raising and cost-saving provi-
sions.” Memorandum in Support of Government’s Motion
for Summary Judgment in No. 3–10–cv–91, p. 41.
If the Medicare and Medicaid reductions would no longer
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be needed to offset the costs of the Medicaid Expansion,
the reductions would no longer operate in the manner
Congress intended. They would lose their justification and
foundation. In addition, to preserve them would be “to
eliminate a significant quid pro quo of the legislative com-
promise” and create a statute Congress did not enact.
Legal Services Corporation v. Velazquez, 531 U. S. 533,
561 (2001) (SCALIA, J., dissenting). It is no secret that
cutting Medicare is unpopular; and it is most improbable
Congress would have done so without at least the assur-
ance that it would render the ACA deficit-neutral. See
ACA §§1563(a)(1), (2), 124 Stat. 270.
c
Health Insurance Exchanges and Their Federal
Subsidies
The ACA requires each State to establish a health-
insurance “exchange.” Each exchange is a one-stop mar-
ketplace for individuals and small businesses to compare
community-rated health insurance and purchase the
policy of their choice. The exchanges cannot operate in the
manner Congress intended if the Individual Mandate,
Medicaid Expansion, and insurance regulations cannot
remain in force.
The Act’s design is to allocate billions of federal dollars
to subsidize individuals’ purchases on the exchanges. In-
dividuals with incomes between 100 and 400 percent of
the poverty level receive tax credits to offset the cost of
insurance to the individual purchaser. 26 U. S. C. §36B
(2006 ed., Supp. IV); 42 U. S. C. §18071 (2006 ed., Supp.
IV). By 2019, 20 million of the 24 million people who will
obtain insurance through an exchange are expected to
receive an average federal subsidy of $6,460 per person.
See CBO, Analysis of the Major Health Care Legislation
Enacted in March 2010, pp. 18–19 (Mar. 30, 2011). With-
out the community-rating insurance regulation, however,
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the average federal subsidy could be much higher; for
community rating greatly lowers the enormous premiums
unhealthy individuals would otherwise pay. Federal
subsidies would make up much of the difference.
The result would be an unintended boon to insurance
companies, an unintended harm to the federal fisc, and
a corresponding breakdown of the “shared responsibil-
ity” between the industry and the federal budget that
Congress intended. Thus, the federal subsidies must be
invalidated.
In the absence of federal subsidies to purchasers, insur-
ance companies will have little incentive to sell insurance
on the exchanges. Under the ACA’s scheme, few, if any,
individuals would want to buy individual insurance poli-
cies outside of an exchange, because federal subsidies
would be unavailable outside of an exchange. Difficulty in
attracting individuals outside of the exchange would in
turn motivate insurers to enter exchanges, despite the
exchanges’ onerous regulations. See 42 U. S. C. §18031.
That system of incentives collapses if the federal subsidies
are invalidated. Without the federal subsidies, individ-
uals would lose the main incentive to purchase insurance
inside the exchanges, and some insurers may be unwilling
to offer insurance inside of exchanges. With fewer buyers
and even fewer sellers, the exchanges would not operate
as Congress intended and may not operate at all.
There is a second reason why, if community rating is
invalidated by the Mandate and Medicaid Expansion’s
invalidity, exchanges cannot be implemented in a manner
consistent with the Act’s design. A key purpose of an
exchange is to provide a marketplace of insurance options
where prices are standardized regardless of the buy-
er’s pre-existing conditions. See ibid. An individual who
shops for insurance through an exchange will evaluate
different insurance products. The products will offer
different benefits and prices. Congress designed the ex-
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changes so the shopper can compare benefits and prices.
But the comparison cannot be made in the way Congress
designed if the prices depend on the shopper’s pre-existing
health conditions. The prices would vary from person to
person. So without community rating—which prohibits
insurers from basing the price of insurance on pre-existing
conditions—the exchanges cannot operate in the manner
Congress intended.
d
Employer-Responsibility Assessment
The employer responsibility assessment provides an
incentive for employers with at least 50 employees to
provide their employees with health insurance options
that meet minimum criteria. See 26 U. S. C. §4980H
(2006 ed., Supp. IV). Unlike the Individual Mandate,
the employer-responsibility assessment does not require
employers to provide an insurance option. Instead, it re-
quires them to make a payment to the Federal Govern-
ment if they do not offer insurance to employees and if
insurance is bought on an exchange by an employee who
qualifies for the exchange’s federal subsidies. See ibid.
For two reasons, the employer-responsibility assessment
must be invalidated. First, the ACA makes a direct link
between the employer-responsibility assessment and the
exchanges. The financial assessment against employers
occurs only under certain conditions. One of them is the
purchase of insurance by an employee on an exchange.
With no exchanges, there are no purchases on the ex-
changes; and with no purchases on the exchanges, there is
nothing to trigger the employer-responsibility assessment.
Second, after the invalidation of burdens on individuals
(the Individual Mandate), insurers (the insurance regu-
lations and taxes), States (the Medicaid Expansion), the
Federal Government (the federal subsidies for exchanges
and for the Medicaid Expansion), and hospitals (the reduc-
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tions in reimbursements), the preservation of the employer-
responsibility assessment would upset the ACA’s design
of “shared responsibility.” It would leave employers as the
only parties bearing any significant responsibility. That
was not the congressional intent.
2
The Act’s Minor Provisions
The next question is whether the invalidation of the
ACA’s major provisions requires the Court to invalidate
the ACA’s other provisions. It does.
The ACA is over 900 pages long. Its regulations include
requirements ranging from a break time and secluded
place at work for nursing mothers, see 29 U. S. C. §207®(1)
(2006 ed., Supp. IV), to displays of nutritional content
at chain restaurants, see 21 U.
S.
C. §343(q)(5)(H).
The Act raises billions of dollars in taxes and fees, includ-
ing exactions imposed on high-income taxpayers, see ACA
§§9015, 10906; HCERA §1402, medical devices, see 26
U. S. C. §4191 (2006 ed., Supp. IV), and tanning booths,
see §5000B. It spends government money on, among other
things, the study of how to spend less government money.
42 U. S. C. §1315a. And it includes a number of provisions
that provide benefits to the State of a particular legislator.
For example, §10323, 124 Stat. 954, extends Medicare
coverage to individuals exposed to asbestos from a mine in
Libby, Montana. Another provision, §2006, id., at 284,
increases Medicaid payments only in Louisiana.
Such provisions validate the Senate Majority Leader’s
statement, “ ‘I don’t know if there is a senator that doesn’t
have something in this bill that was important to them.
. . . [And] if they don’t have something in it important to
them, then it doesn’t speak well of them. That’s what this
legislation is all about: It’s the art of compromise.’ ” Pear,
In Health Bill for Everyone, Provisions for a Few, N. Y.
Times, Jan. 4, 2010, p. A10 (quoting Sen. Reid). Often, a
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minor provision will be the price paid for support of a
major provision. So, if the major provision were unconsti-
tutional, Congress would not have passed the minor one.
Without the ACA’s major provisions, many of these
minor provisions will not operate in the manner Congress
intended. For example, the tax increases are “Revenue
Offset Provisions” designed to help offset the cost to the
Federal Government of programs like the Medicaid Ex-
pansion and the exchanges’ federal subsidies. See Title
IX, Subtitle A—Revenue Offset Provisions, 124 Stat. 847.
With the Medicaid Expansion and the exchanges invali-
dated, the tax increases no longer operate to offset costs,
and they no longer serve the purpose in the Act’s scheme
of “shared responsibility” that Congress intended.
Some provisions, such as requiring chain restaurants to
display nutritional content, appear likely to operate as
Congress intended, but they fail the second test for sever-
ability. There is no reason to believe that Congress would
have enacted them independently. The Court has not
previously had occasion to consider severability in the con-
text of an omnibus enactment like the ACA, which in-
cludes not only many provisions that are ancillary to its
central provisions but also many that are entirely unre-
lated—hitched on because it was a quick way to get them
passed despite opposition, or because their proponents
could exact their enactment as the quid pro quo for their
needed support. When we are confronted with such a so-
called “Christmas tree,” a law to which many nongermane
ornaments have been attached, we think the proper rule
must be that when the tree no longer exists the ornaments
are superfluous. We have no reliable basis for knowing
which pieces of the Act would have passed on their own. It
is certain that many of them would not have, and it is not
a proper function of this Court to guess which. To sever
the statute in that manner “ ‘would be to make a new law,
not to enforce an old one. This is not part of our duty.’ ”
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Trade-Mark Cases, 100 U. S., at 99.
This Court must not impose risks unintended by Con-
gress or produce legislation Congress may have lacked the
support to enact. For those reasons, the unconstitution-
ality of both the Individual Mandate and the Medicaid
Expansion requires the invalidation of the Affordable Care
Act’s other provisions.
* * *
The Court today decides to save a statute Congress did
not write. It rules that what the statute declares to be a
requirement with a penalty is instead an option subject
to a tax. And it changes the intentionally coercive sanc-
tion of a total cut-off of Medicaid funds to a supposedly
noncoercive cut-off of only the incremental funds that the
Act makes available.
The Court regards its strained statutory interpretation
as judicial modesty. It is not. It amounts instead to a vast
judicial overreaching. It creates a debilitated, inoperable
version of health-care regulation that Congress did not
enact and the public does not expect. It makes enactment
of sensible health-care regulation more difficult, since
Congress cannot start afresh but must take as its point of
departure a jumble of now senseless provisions, provisions
that certain interests favored under the Court’s new de-
sign will struggle to retain. And it leaves the public and
the States to expend vast sums of money on requirements
that may or may not survive the necessary congressional
revision.
The Court’s disposition, invented and atextual as it is,
does not even have the merit of avoiding constitutional
difficulties. It creates them. The holding that the Indi-
vidual Mandate is a tax raises a difficult constitutional
question (what is a direct tax?) that the Court resolves
with inadequate deliberation. And the judgment on the
Medicaid Expansion issue ushers in new federalism con-
65
Cite as: 567 U. S. ____ (2012)
SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting
cerns and places an unaccustomed strain upon the Union.
Those States that decline the Medicaid Expansion must
subsidize, by the federal tax dollars taken from their
citizens, vast grants to the States that accept the Medicaid
Expansion. If that destabilizing political dynamic, so
antagonistic to a harmonious Union, is to be introduced at
all, it should be by Congress, not by the Judiciary.
The values that should have determined our course to-
day are caution, minimalism, and the understanding that
the Federal Government is one of limited powers. But
the Court’s ruling undermines those values at every turn.
In the name of restraint, it overreaches. In the name of
constitutional avoidance, it creates new constitutional
questions. In the name of cooperative federalism, it un-
dermines state sovereignty.
The Constitution, though it dates from the founding of
the Republic, has powerful meaning and vital relevance
to our own times. The constitutional protections that this
case involves are protections of structure. Structural
protections—notably, the restraints imposed by federalism
and separation of powers—are less romantic and have less
obvious a connection to personal freedom than the provi-
sions of the Bill of Rights or the Civil War Amendments.
Hence they tend to be undervalued or even forgotten by
our citizens. It should be the responsibility of the Court to
teach otherwise, to remind our people that the Framers
considered structural protections of freedom the most im-
portant ones, for which reason they alone were embod-
ied in the original Constitution and not left to later
amendment. The fragmentation of power produced by the
structure of our Government is central to liberty, and
when we destroy it, we place liberty at peril. Today’s
decision should have vindicated, should have taught, this
truth; instead, our judgment today has disregarded it.
For the reasons here stated, we would find the Act in-
valid in its entirety. We respectfully dissent.
_________________
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1
Cite as: 567 U. S. ____ (2012)
THOMAS, J., dissenting
SUPREME COURT OF THE UNITED STATES
Nos. 11–393, 11–398 and 11–400
NATIONAL FEDERATION OF INDEPENDENT
BUSINESS, ET AL., PETITIONERS
11–393
v.
KATHLEEN SEBELIUS, SECRETARY OF HEALTH
AND HUMAN SERVICES, ET AL.
DEPARTMENT OF HEALTH AND HUMAN
SERVICES, ET AL., PETITIONERS
11–398
v.
FLORIDA ET AL.
11–400
FLORIDA, ET AL., PETITIONERS
v.
DEPARTMENT OF HEALTH AND
HUMAN SERVICES ET AL.
ON WRITS OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE ELEVENTH CIRCUIT
[June 28, 2012]
JUSTICE THOMAS, dissenting.
I dissent for the reasons stated in our joint opinion, but
I write separately to say a word about the Commerce
Clause. The joint dissent and THE CHIEF JUSTICE cor-
rectly apply our precedents to conclude that the Individual
Mandate is beyond the power granted to Congress un-
der the Commerce Clause and the Necessary and Proper
Clause. Under those precedents, Congress may regulate
“economic activity [that] substantially affects interstate
commerce.” United States v. Lopez, 514 U. S. 549, 560
(1995). I adhere to my view that “the very notion of a
2
NATIONAL FEDERATION OF INDEPENDENT
BUSINESS
v. SEBELIUS
THOMAS, J., dissenting
‘substantial effects’ test under the Commerce Clause is
inconsistent with the original understanding of Congress’
powers and with this Court’s early Commerce Clause
cases.” United States v. Morrison, 529 U. S. 598, 627
(2000) (THOMAS, J., concurring); see also Lopez, supra, at
584–602 (THOMAS, J., concurring); Gonzales v. Raich, 545
U. S. 1, 67–69 (2005) (THOMAS, J., dissenting). As I have
explained, the Court’s continued use of that test “has
encouraged the Federal Government to persist in its view
that the Commerce Clause has virtually no limits.” Morri-
son, supra, at 627. The Government’s unprecedented
claim in this suit that it may regulate not only economic
activity but also inactivity that substantially affects inter-
state commerce is a case in point.