National Federation of Independent Business v. Sebelius (2012) and the Affordable Care Act

National Federation of Independent Business v. Sebelius (2012) was a Supreme Court case involving the constitutionality of the Affordable Care Act (ACA) as well as the actions made by Congress to compel states to support the expansion of Medicaid. The ACA was issued by the Obama administration in 2010 under the idea that many Americans do not have or can not afford health insurance. The legislation requires Americans to have health insurance, otherwise there will be a tax penalty enforced. It also makes health care more affordable for Americans and focuses on improving health coverage for people in poverty. Additionally, the ACA also "contained an expansion of Medicaid, which states had to accept in order to receive Federal funds for Medicaid."

26 states along with the National Federation of Independent Business did not approve of the ACA as they believed it was unconstitutional for Congress to require health care. They argued that the enforcement of the ACA exceeded the powers granted from the Commerce Clause or Tax and Spending Clause, which grants Congress the power of regulating commerce and taxation respectively. The plaintiffs also argued that Congress was "unconstitutionally coercive" in its threat that states would not receive Medicaid funding if they did not support the expansion of Medicaid.

5 of the Supreme Court justices (majority) ruled that Congress did have the power to require health care because tax penalty for not having health insurance is considered a tax, which is granted by the Tax and Spending Clause. The dissenting opinion saw the tax penalty more as a penalty rather than a tax. However, the Court ruled that the Commerce Clause was violated as Congress was "[compelling] individuals to participate in commerce" rather than "[regulating] existing commercial activity."

In the second issue of considering whether Congress was "unconstitutionally coercive" regarding the expansion of Medicaid, the Court ruled in a 7-2 majority that Congress was violating the Spending Clause through its threat of removing Medicaid funding towards states. Despite this, the Court did rule in favor of the other aspects of the Medicaid expansion provision. This meant that it was constitutional for Congress to expand Medicaid "to cover all adults with income below 138% of the federal poverty level."

This Supreme Court case marks an important change in terms of health care. With the decision made by the Court, Americans are now required to have health insurance, or they will be charged with a tax penalty. This decision has led to both benefits and costs for American society. Proponents of the ACA see that the legislation "slows the rise of health care costs... by providing insurance for millions and making preventive care free." On the other hand, opponents argue that many businesses opt to pay the tax penalty, which has hurt "[3] to 5 million people [who have] lost their employment-based health insurance," and many individuals are exempted from paying taxes. The question still remains: is the ACA overall more beneficial or costly to Americans?

Sources:
https://www.oyez.org/cases/2011/11-393
https://www.healthcare.gov/glossary/affordable-care-act/
https://www.thebalance.com/obamacare-pros-and-cons-3306059