National Federation of Independent Business v. Sebelius Summary |

In 2010, Congress passed a controversial health
care law, the Patient Protection and Affordable Care Act (popularly known as ObamaCare, or
the ACA). Shortly afterward, multiple parties, including business organizations, individuals,
and 26 states, filed suit in district courts across the country to challenge the Act’s
constitutionality. The results were fractured: some courts upheld some or all of the ACA,
others declared part or all unconstitutional, some concluded offending provisions could
be severed, and others argued that the Act couldn’t be challenged until someone was
forced to pay the penalty. In National Federation of Independent Business
v. Sebelius, the National Federation of Independent Business, the State of Florida, and other
plaintiffs sued in Florida federal court Katherine Sebelius, Secretary of the U.S. Department
of Health and Human Services. The ACA is a massive piece of legislation, but the litigation
challenged two key provisions: (1) the individual mandate, which requires individuals to purchase
health insurance or pay a “penalty” and (2) the Medicaid expansion provision, which
conditioned continued receipt of federal Medicaid funds on states expanding their eligibility
requirements for the program. The district court held that Congress had
exceeded its authority in passing the individual mandate. The court concluded that the individual
mandate was not severable and struck down the Act as a whole. On appeal, the Eleventh
Circuit Court of Appeals affirmed that the individual mandate was unconstitutional. However,
the court of appeals determined that the individual mandate was severable; so, the rest of the
Act remained intact. The Supreme Court agreed to hear the case to resolve the split between the
circuits. Chief Justice Roberts, writing for a divided
majority, found the Act constitutional in part and unconstitutional in part. Roberts
first concluded that the individual mandate could not be justified as a valid exercise
of commerce power, because the Commerce Clause did not empower Congress to compel individuals
to engage in commercial activity. Further, Roberts concluded that the possibility that
people would participate in the healthcare market at some point in the future was not
enough. Roberts viewed this as a slippery slope that would open the door to congressional
regulation of all sorts of activity (or inactivity) not contemplated by the Framers. To illustrate
this, Roberts said that obesity was more responsible for increased healthcare costs than uninsured
people, but under the government’s theory, the federal government could mandate that
people buy vegetables. Next, Roberts wrote that the Necessary and Proper Clause only
gave Congress the power to do things that were incidental to the valid exercise of some
enumerated power, and therefore the individual mandate could not be justified on this ground
either. However, Roberts reasoned the individual mandate’s penalty provision operated more
like a tax imposed on those opting against purchasing coverage. Because the tax was assessed
just like other taxes, based on income, and collected by the IRS, the fact that Congress
had called it a penalty was irrelevant. The Court interprets legislation as constitutional
if “fairly possible,” and the individual mandate could be saved by interpreting the
penalty provision as a tax. With respect to the Medicaid extension, Roberts
held that the federal government could not withhold existing Medicaid funding from states
that chose not to participate. Roberts acknowledged that Congress could offer grants to states
and condition the funds on compliance with certain requirements, as happens frequently
with highway and infrastructure funding. However, Roberts found that the Act did not offer the
states a genuine choice, because “they must accept a basic change in the nature of Medicaid,
or risk the loss of all Medicaid funding.” Accordingly, the Medicaid provision was found
unconstitutional. The majority found the provision severable from the remainder of the Act, which
was left intact. Justice Ginsburg concurred in part and dissented
in part, concluding that the individual mandate should be upheld under the Commerce Clause,
because there was a rational basis for Congress to believe the large uninsured population
substantially affected interstate commerce and the mandate bore a reasonable connection
to addressing the problem. Ginsburg disagreed that the Medicaid expansion was unconstitutional.
Ginsburg found that states had no “existing” rights to federal funds and that Congress
could decide whether federal funds should be given to the states, and under what conditions.
Justice Scalia dissented, writing that the entire Act should be struck down as unconstitutional.
He argued that neither the Commerce Clause nor the power to tax and spend granted Congress
the authority to require the individual mandate. Scalia further argued that the Act’s “threats”
to terminate states’ Medicaid funding absent compliance with the Medicaid expansion were
impermissibly coercive. The Sebelius decision, particularly the portion
of the opinion upholding the ACA’s individual mandate, was hugely important in terms of
federalism and national policy, and also highly controversial. If you found this video helpful, you can explore
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3 thoughts on “National Federation of Independent Business v. Sebelius Summary |

  1. Isn't this case the first time the Court held an exercise of Congress's spending power (the medicaid expansion) was unconstitutional? Why exactly did Roberts hold the medicaid expansion was unconstitutional? Was it the coercive nature of the expansion?

  2. Fuck yeah!!!! Nothing gets me off like a good Commerce Clause strike down! NARROW THE SCOPE!!! LETS GO JUSTICE ROBERTS! GET EM!!

  3. I'm an Italian student doing researches about Sebelius case for university. I thank you a lot for your clarity. Priceless explanation.

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