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Life Health > Health Insurance

Supreme Court Upholds Health Care Law

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In one of the most anticipated court rulings, the Supreme Court announced its decision on the Patient Protection and Affordable Care Act of 2010.

The court ruled 5-4 that Congress has no authority under the Commerce Clause of the U.S. Constitution to require individuals to own a minimum level of insurance but can use its taxation authority to impose a coverage mandate.

The text of the opinion, in National Federation of Business vs. Sebelius, Case Number 11-393, is available here.

The court has narrowed the scope of a provision dealing with state Medicaid program expansion requirements, forbidding the government from taking existing Medicaid funding away from states that fail to comply.

State attorney generals and others have been arguing that a provision in PPACA that calls for most individuals to own a minimum level of health insurance starting in 2014 or else pay a penalty is unconstitutional, and that Congress has no authority to make individuals buy a commercial insurance product.

Chief Justice John Roberts has written in an opinion for the majority that the Commerce Clause of the Constitution gives Congress no more authority to require the purchase of health insurance than to require the purchase of broccoli.

According to the Obama administration, a requirement that citizens buy health insurance is different from a requirement that they broccoli because “[h]ealth insurance is not purchased for its own sake like a car or broccoli; it is a means of financing health-care consumption and covering universal risks,” Roberts writes.

The connection between mandated insurance purchases and future use of insured health care is too remote for the goverment to use the Commerce Clause to justify the PPACA mandate, Roberts says.

But, Roberts says, “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.”

But the Constitution does give Congress the authority to “lay and collect Taxes,” Roberts says.

The Obama administration and congressional PPACA supporters have avoided calling the penalty to be imposed on taxpayers who fail to meet individual health insurance ownership requirements a tax, but, under one Obama administration theory, “the mandate is not a legal command to buy insurance,” Roberts says. “Rather, it makes going without insurance just another thing the Government taxes, like buying gasoline or earning 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.”

Imposition of a tax “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,” Roberts says. “The Affordable Care Act’s requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax. Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness.”

Of the Medicaid expansion requirements in PPACA, Roberts writes that, “Permitting the Federal Government to force the States to implement a federal program would threaten the political accountability key to our federal system.“

The PPACA Medicaid expansion requirements would change the nature of Medicaid, not merely expand it, turning it into a comprehensive national plan, not just a safety net for the neediest, Roberts says.

Congress could give states more Medicaid funding and require the states to use the money to expand the program, Roberts says. 

But Congress cannot “penalize States that choose not to participate in that new program by taking away their existing Medicaid funding,” Roberts says.

Justices Clarence Thomas, Antonin Scalia, Samuel Alito and Anthony Kennedy opposed the ruling and joined to write a dissenting opinion.

President Obama signed PPACA, the main bill in the two-bill Affordable Care Act package, March 23, 2010. He signed the other bill, the Health Care and Education Reconciliation Act of 2010, March 30, 2010.


This story originally appeared on AdvisorOne’s sister site, LifeHealthPro.

Check out Advisors’ Work Begins With Supreme Court’s Ruling on Health Law on AdvisorOne.

For exclusive, ongoing coverage of the PPACA verdict and its impact on the industry, visit


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