The U.S. Supreme Court’s Decision on the National Health Bill

By Eileen Servidio,
President of the School of International Relations and Diplomacy at AGS, Professor and Chair of International Law

Posted on October 30th

On June 28, 2012 the United States Supreme Court upheld the Patient Protection and Affordable Care Act (ACA), a signature piece of legislation of President Obama, also referred less respectably as “Obamacare”. This victory for the Obama Administration was due in great part to Chief Justice John G. Roberts Jr. who sided with the more liberal members of the Court giving them the majority vote.[1] Some were amazed by this, others less so, however, placing Roberts on the pedestal of great Supreme Court justices that prefer to follow loyally the Constitution rather than their own political, social or other views may be premature. Roberts upheld an important part of the law while putting limits on the powers of the Federal Government, limits that have not been recognized by the Court for some years.

National Federation of Independent Business et al. v. Sebelius, Secretary of Health and Human Services, et al. (ACA case) questioned the constitutional validity of the ACA; quite simply, does the Federal Government, in this case Congress, have the power to pass this law. Is the law, or parts of this law in violation of the Constitution?

Congress enacted the ACA in 2010.[2] The goal of the law is to increase the number of people covered by health insurance and to lower the cost of health care. According to the statistics quoted by Justice Ginsburg[3] :

“…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 medical care administered to U.S. residents[4] (….) 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 government aid.[5]…As a group, uninsured individuals annually consume more than $100 billion in health-care services, nearly 5% of the Nation’s total.”[6]

As Ginsburg points out, not being able to pay for health care does not mean that health care will not be provided so that health-care providers (hospitals, doctors…), it was calculated, did not receive $43 billion worth of the $116 billion in care given in 2008[7] placing a heavy burden on the health care market; the consequences of this being that health-care prices and insurances premiums increase putting the burden on those who do pay.

Among the hundreds of provisions in the over 900 pages of the Act, two were put into constitutional question. The National Federation of Independent Business, 26 States and several individuals brought suit to federal court claiming that the “individual mandate” and the Medicaid extension provisions were contrary to the U.S. Constitution.[8] That is to say outside the power of the Federal Government and thus should be pronounced invalid.

The individual mandate stipulates that by 2014 most individual will be responsible for having a minimum essential coverage or pay a penalty of $95 in 2014, $495 in 2015 and $750 in 2016, or up to two percent of income by 2016, with a cap at the national bronze plan premium.[9] There are exceptions to this requirement; religious objectors, those unable to afford coverage, taxpayers with incomes less than 100% of the Federal Poverty Level (FPL)[10], Indian tribe members, persons receiving a hardship waiver, persons that are not lawfully present, those incarcerated and persons not covered for less than three months.

Medicaid expansion was not in itself put into question. It provides that:

“States may expand Medicare eligibility early as April 1, 2010. Beginning on January 1, 2014, all children, parents and childless adults who are not entitled to Medicare and who have family incomes up to 133 percent FPL will be eligible for Medicaid. Between 2014 and 2016, the federal government will pay 100 percent of the cost of covering newly-eligible individuals. In 2017 and 2018, states that initially covered less of the newly-eligible population (“Other States”) will receive more assistance than states that covered at least some non-elderly, non-pregnant adults (“Expansion States”). States will be required to maintain the same income eligibility levels through December 31, 2013 for all adults, and this requirement would be extended through September 30, 2019 for children currently in Medicaid”.[11]

However, the consequences to the States that refuse to implement the extension were put into question; all Medicaid federal funding would be held back from any State that did not comply.

If either of these provisions were voted by any of the 50 States, its legality would surely not have been put into question. However, the ACA is a federal law, and as such it is required to fall into one of the categories of powers that the federal government is granted by the Federal Constitution. This fact stems from the historical origins of the United States. The experience as colonies under Great Britain left Americans strongly wary of a centralized government possessing wide powers; the centralized government should have the minimum amount of power necessary to unite the States, while leaving each State sovereign. Thus, the first government did not take the form of a federation but a confederation. However, this weak central government--able to enact law but not to enforce them, unable to levy taxes, with most of the important decisions needing approval of 9 out of the 13 States--led the States to many difficulties including economic problems, protectionist acts, and boundary disputes. It was then thought by some that the centralized government needed more power to hold the Nation together. The Federalists, a group of persons advocating a stronger, federal style government, led the struggle for the ratification of a Federal Constitution and the establishment of the federal government in 1789.

However, the fear of an omnipresent, powerful central government and of the loss of much of the States powers resulted in a Constitution that strengthened the central government without granting it what is known as a “general police powers”. This is the power that grants a government the authority to act in any area to protect the health, safety and the general welfare of its citizens. The 50 States have this power, not the Federal Government. The Federal Government is granted by the Constitution enumerated powers; powers that are listed in the Constitution. In these areas and only in these areas can the Federal Government act, be it the legislative, executive or judicial branch. All powers that are not exclusively Federal powers belong to the States[12] that often guard them jealously for the sake of what some like to refer to as their independence and sovereignty. Thus, when Congress enacts a federal law, it must be pursuant to one of the powers that are listed in the Constitution, if not the law in question is not valid. The United States Supreme Court has the final word on whether a law is constitutionally valid or not since it has the final say on how the U.S. Constitution is to be interpreted.

Thus, where a federal law or action has been enacted or taken, one can always ask: Under which enumerated power does this law or action fall?

In the ACA case the Supreme Court was required to decide if the individual mandate and the expansion of Medicaid were within the powers granted by the Constitution to the Federal Government. If this were not the case, the provisions would be invalidated. The two provisions will be treated separately.

Is the provision concerning the individual mandate constitutionally valid:

The individual mandate does not force most people to be insured, however, it does require them to pay a penalty if they are not. As always where one is verifying the constitutionality of a federal law, the question is: What is the enumerated power that grants the Federal Government the authority to take the said measure?

Concerning Congress, the enumerated powers can be found in Article I Section 8 of the U.S. Constitution that begins: “Congress shall have power”. There follows 17 clauses explicitly listing these powers such as the authority to declare war and to raise and support armies and a navy. Some of these powers are vested exclusively in the Federal Government as for example the power to coin money. Some are shared with the different States as is the power to lay and collect taxes.

Most importantly, when the Federal Government has a power, it has it entirely as Chief Justice John Marshall emphasizes in Gibbons v. Ogden:[13]

“This power (speaking of the interstate commerce power), like all others invested in Congress, is complete in itself, may be exercised to its utmost extent, and acknowledges no limitations, other than are prescribed in the constitution”.

And as Marshall so dramatically proclaimed in McCulloch v. Maryland[14]:

“If any one proposition could command the universal assent of mankind, we might expect that it would be this—that the government of the Union, though limited in its powers, is supreme within its sphere of action.”[15]

Certain of these enumerated powers provide great authority to the Federal Government such as the taxing and spending powers and perhaps surprisingly for those who do not follow American Constitutional Law, the Interstate Commerce power. This latter power has allowed Congress to make law in areas which may seem out of Federal Government limits at first view. And this is precisely what the Government argued in the ACA case; that Congress had the power to enact the individual mandate provision in pursuance of the Interstate Commerce Clause.

Interstate commerce power: Article I Sect. 8 cl. 3 grants Congress the power “to regulate commerce with foreign nations and among the several States. This seemingly innocent clause has gradually been interpreted by the Supreme Court in such a manner that many areas that are not listed in the other enumerated powers can be considered ‘interstate commerce’ and thus may be regulated by the Federal Government. Some examples. In Gibbons v. Ogden, Gibbons was granted a license by Congress to operate steamboats between New York and New Jersey. Nevertheless, Ogden had already received an exclusive license from the New York legislature and therefore obtained an injunction from New York against Gibbons. New York considered that the license granted by Congress was not valid being outside an area that the Federal Government can regulate. However, the Supreme Court did not invalidate the federally granted license considering that it came under the Interstate Commerce Clause. According to the Court, the term “commerce” is not to be taken in a narrow sense, navigation can be commerce. Also, commerce “among” the States must mean also “commerce with the states” which means that the power of Congress can be exercised “within the territorial jurisdiction of the several states”.[16]

To emphasize the authority of the Federal Government in the areas enumerated, the Court addresses the manner in which these powers, and not just the interstate commerce power, should be interpreted:

“This instrument (the U.S. Constitution) contains an enumeration of powers expressly granted by the people to their government. It has been said that these powers ought to be construed strictly. But why ought they to be so construed? Is there one sentence in the constitution which gives countenance to this rule?

Marshall, writing for the Court, then proceeds to answer this by pointing out that neither the “gentlemen of the bar” nor the Court has “been able to discern (one sentence in the constitution), that prescribes this rule. We do not, therefore, think ourselves justified in adopting it (…). We know of no rule for construing the extent of such powers, other than is given by the language of the instrument which confers them, taken in connection with the purposes for which they were conferred.”

However, for some years after this decision, the Court did not take this extensive view of the Interstate Commerce Clause until 1937 in National Labor Relations Board v. Jones & Laughlin Steel Corp.[17] The Federal Law in question was the National Labor Relations Act of 1935 (NLRA). Since the invalidation of an earlier, similar federal law[18] considered unconstitutional by the Supreme Court, employee’s rights were being abused and union members were being blacklisted.

The NLRA was enacted by Congress to guarantee employees “the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in concerted activities for the purpose of collective bargaining or other mutual aid and protection”. To facilitate the enforcement of this law, the Act created the National Labor Relations Board. However, the question as always was did the Federal Government have the right to regulate in this area. The concept of having a central government powerful enough to regulate such an essential element of everyday life as the workplace and to be able to interfere directly with labor disputes through a federal board was a large mental leap for the Court.  Though less so at the time for the people since it was the era of the Great Depression and desperate measures for desperate times seemed more acceptable. In the early 1930s strikes broke out in many places and factories were being taken over by employees.

The larger question was simply the scope of the power of the Federal Government to regulate the economy. This question divided the Legislative and the Executive Branches on one side and the Judiciary on the other.  Earlier decisions of the Court invalidated efforts by the Federal Government in this area using two legal arguments; that the Due Process Clause of the Fifth Amendment guaranteed contractual freedom between an employer and employee without governmental interference and that the labor relations in manufacturing or production had only an indirect effect on interstate commence and thus the Interstate Commerce Clause did not invest the Federal Government with this power. These decisions frustrated the efforts of Franklin D. Roosevelt and his Democratic Party that had won the 1936 elections hands down. The then Court had what some considered a laissez-faire interpretation of the Constitution. That is, there was “hardly any limit but the sky to the invalidating of (laws) if they happen to strike a majority of the Court as for any reason undesirable”.[19] The most conservative of the Justices, James McReynolds, Pierce Butler, Willis Van Devanter and George Sutherland, often known as the Four Horsemen, thwarting regularly all attempts by Roosevelt to get through his New Deal legislation.[20] However, Roosevelt did not accept defeat easily. He decided to attempt getting passed in Congress the Judiciary Reorganization Bill of 1937 that would have allowed him to appoint additional justices to the Supreme Court in order to obtain a court more favorable to his vision.[21] Although this infamous “court packing” scheme had little chance of getting enacted (even some of the Democrats were against it)[22] the Court took a sudden turn and began to validate New Deal legislation.

This about-face began with the decision in Jones & Laughlin. The Supreme Court upheld the NLRA. There is no power enumerated in the Constitution that addresses explicitly the authority of the National Government to regulate the labor issue in question so that for this law to be considered valid, it would have to draw its authority from the Interstate Commerce Clause. And this is precisely what the Supreme Court concluded. The company in question in the case, Jones & Laughlin Steel Corp. manufactured iron and steel only in Pennsylvania. It did own mines in other States and much of its production was shipped to other States. Its unfair labor practices were leading the workers to strike. The fact that the company was engaged in  “production” did not, according to the Court, prevent the effect of such strikes to have an “effect” on interstate commerce. It was decided that this law regulated an activity that could have a “substantial economic effect” on interstate commerce:

“Although activities may be intrastate in character when separately considered, if they have such a close and substantial 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.” (high-lights added)

Both Chief Justice Charles Evans Hughes and Justice Owen Roberts, who previously had been of the opinion that labor relations associated with production enterprises should be regulated by the States, voted for the validity of the Act.  Some feel that they had a “constitutional” change of heart. Others feel this switch would make the “packing the Court” scheme unnecessary and refer to this as “a switch in time saves nine”.

This expansion of the Interstate Commerce Clause continued to such a point that few activities could not be regulated under it. For example, in a unanimous decision, Wickard v. Filburn,[23] the Supreme Court considered that wheat that was consumed on the farm of the farmer who grew it -- thus never leaving the farm it was grown on-- should be subject to the Second Agricultural Adjustment Act, a federal law that placed a quota on wheat. Filburn never sold his wheat in the open market in the year in question. However, he sowed 12 acres of wheat more than he was permitted by the national law and was imposed a penalty.

Filburn argued that wheat grown for personal consumption, wheat that was never to be sold on the open market, could not be regulated by the Federal Government under the Interstate Commerce Clause. There was no “commerce” and no “interstate” activity. At the time of this decision, many of the Justices had since been appointed to the bench by Roosevelt. The Court argued that wheat consumed by the farmer himself could still affect interstate commerce. The Court recognized that Filburn’s own consumption could seem trivial, however if taken with all the other wheat which is home-consumed it is no longer so. Less demand of wheat could depress prices:

“One of the primary purposes of the Act in question was to increase the market price of wheat and to that end to limit the volume thereof that could affect the market. It can hardly be denied that a factor of such volume and variability as home-consumed wheat would have a substantial influence on price and market conditions. This may arise because being in marketable condition such wheat overhangs the market and, if induced by rising prices, tends to flow into the market and check price increases. But if we assume that it is never marketed, it supplies a need of the man who grew it which would otherwise be reflected by purchases in the open market. Home-grown wheat in this sense competes with wheat in commerce.”

This extensive interpretation of the Interstate Clause certainly allows much national action in regulating the economy.

Nevertheless, this progressive expansion of the interpretation of the Interstate Commerce Clause finally ceased with United States v. Lopez.[24] In a 5 to 4 decision, the Supreme Court invalidated a 1990 federal law, the Gun-Free Zone Act, which made it a federal offense to “knowingly possess a firearm at a place that the individual knows, or has reasonable cause to believe, is a school zone”.  The Solicitor General, Drew S. Days, argued that the law targeted possession and not sales and therefore supplemented State law not substitute for it and therefore the link between the Interstate Commerce Clause did not have to be as strong. The Federal Government had argued that possession of firearms in a school zone substantially affects the functioning of the national economy by the cost of violent crimes “through the mechanism of insurance, those costs are spread throughout the population” and since people become less willing to travel to areas that are unsafe. Guns in school affect the learning process producing less productive citizens that in turn affect the national economy. The National Education Association and antigun groups joined the administration in this reasoning as the National Rifle Association and other pro-gun organizations argued against them. Chief Justice William H. Rehnquist wrote for the majority. The administrations’ arguments were rejected by the Court who reasoned that the federal law had nothing to do with “commerce or any sort of economic enterprise, however broadly one might define those terms”. According to the decision, there was no precedent in the Court’s prior cases to uphold such a law that had no nexus with interstate commerce whatsoever. The Court concluded that if the Government’s argument concerning the “cost of crime” were permitted to pass as the link with the Interstate Commerce power, then the Federal Government would be able to enact in all areas that were related to the economic productivity of an individual. That is to say, the Federal Government would no longer have enumerated powers but would have the same powers as the States, to take any action for the welfare of its citizens:

“(…) it is difficult to perceive any limitation on federal power, even in areas such as criminal law enforcement or education where States historically have been sovereign. Thus, if we were to accept the Government’s arguments, we are hard-pressed to posit any activity by an individual that Congress is without power to regulate”.[25]

Justice Clarence Thomas in his concurring opinion historically demonstrated how the Supreme Court had granted the federal government a “blank check” under the provision of the Interstate Commerce Clause. This decision demonstrated the radical change made in the Court by the appointments of both Presidents Ronald Reagan and George Bush.[26]

The ACA decision goes a step further in limiting the Interstate Commerce Clause by refusing to accept the argument that the Patient Protection and Affordable Care Act is a valid exercise by Congress of this power.

Chief Justice Roberts lists the three broad categories that have been defined by precedent to be activities that Congress may regulate under the Commerce Clause:

--the channels (highways, waterways…) of interstates commerce;

--the instrumentalities (people, machines…) of interstate commerce;

--and activities that have a substantial effect on interstate commerce.

The Government argued that Congress can require persons to buy health insurance since the failure to do so has a substantial effect on interstate commerce thus fitting into the 3^rd category. To support this, the Government invoked the Necessary and Proper Clause.

This clause, often referred to as the Doctrine of Implied Powers, is found at the end of the list of enumerated powers: “Congress shall have Power…To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof”.  In other words, the Government has implied powers that allow it to put into effect the enumerated powers.

This clause was first interpreted by the Supreme Court in one of its most famous cases, McCulloch v. Maryland.[27] The Supreme Court considered that Congress had the power to charter a national bank in the State of Maryland that had as its purpose to regulate currency and national economic questions although there is nowhere in the Constitution that explicitly grants the power to charter a bank to the Federal Government. McCulloch declared that there is no exclusion in the Constitution of “incidental or implied powers”[28] nor does the Constitution mention that “everything granted shall be expressly and minutely described”. Since a constitution is not a code, it can only give a “great outline” from which the minor details can be deduced. Thus, the fact that the enumerated powers list such activities as the powers “of levying and collecting taxes throughout this widely-extended empire; of paying the public debts, both in the United States and in foreign countries; of borrowing money, at home and abroad; of regulating commerce with foreign nations, and among the several states; of raising and supporting armies and a navy; and of carrying on war…” Congress must also have the means of executing them. The State of Maryland had argued that the adjectives “necessary and proper” actually limited the means the Government could use to execute its powers. However, according to the Court:

“An interpretation of this clause of the constitution, so strict and literal, would render every law which could be passed by congress unconstitutional; for of no particular law can it be predicated, that it is absolutely and indispensably necessary to carry into effect any of the specified powers; since a different law might be imagined, which could be enacted, tending to the same object.”

McCulloch stated that the term “necessary” is currently used as meaning “no more than that one thing is convenient, or useful, or essential to another”. Thus the implied powers must be “appropriate” as a means to executing the enumerated powers and must not go against the Constitution:

“The court, in inquiring whether congress had made a selection of constitutional means, is to compare the law in question with the powers it is intended to carry into execution; not in order to ascertain whether other or better means might have been selected, for that is the legislative province, but to see whether those which have been chosen have a natural connection with any specific power; whether they are adapted to give it effect; whether they are appropriate means to an end. It cannot be denied, that this is the character of the Bank of the United States.”

In the ACA case the Government made the point that everyone will eventually need health care but those who are not insured will often not be able to pay for it and since federal and state laws require hospitals to provide a certain amount of care for these people, hospitals receive only a portion of compensation for the care they provide. Hospitals then pass on these losses to insurers by charging more and the insurers pass on their losses to the insured by raising premiums. It was estimated by Congress that the average family is required to pay an average of $1,000 per year to make up for those cared for without insurance. The individual mandate is a means of preventing this “cost-shifting”. A cost-shifting that has,  according to the Government, “a substantial and deleterious effect on interstate commerce”.

However, the majority opinion rejects the argument that the individual mandate can be enacted by Congress pursuant to the Interstate Commerce Clause. Chief Justice Roberts writing for the majority recognizes the extensive interpretation of the Commerce Clause by the Court, nevertheless he emphasizes the fact that “Congress has never attempted to rely on that power to compel individuals not engaged in commerce to purchase an unwanted product.” He continues this reasoning stating that if the Constitution grants Congress the power to regulate commerce this “presupposes the existence of commercial 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”. He esteems that “(t)he language of the Constitution reflects the natural understanding that the power to regulate assumes there is already something to be regulated”. This premise he corroborates with examples of other federal powers; the power to coin money and regulate its value and the power to raise and support armies and to provide and maintain a navy and the power to regulate these arm forces. In each of these cases, he underlines, the power to regulate is preceded by the power to create that which is regulated: “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 unnecessary”.

In other words the individual mandate does not regulate existing commercial activity but “compels individuals to become active in commerce by purchasing a product, on the ground that their failure to do so affects commerce”. To underscore the likely dangerous consequences of recognizing the Commerce Clause as the legal support of the individual mandate, Roberts proposes to consider the American diet:

“(…) many Americans do not eat a balanced diet. That group makes up a larger percentage of the total population than those without health insurance (….). The failure of that group to have a healthy diet increases health care cost”.

He quotes the increased cost of obesity on health care and the fact that these costs “are borne by other Americans”.[29] Those leading unhealthy life styles pay only a “fraction” of the costs related to their behavior, it is the society that pays. Thus he wonders, if one follows the logic of the Government’s argument cannot one order everyone to eat a healthy diet:

“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 authorized Congress to use its commerce power to compel citizens to act as the Government would have them act.”

Robert’s main argument for rejecting the Commerce Clause as a support for the individual mandate is thus that “(t)he power to regulate commerce presupposes the existence of commercial activity to be regulated”. And according to Roberts this activity does not exist in the case of the individual mandate:

“The individual mandate, however, does not regulate existing commercial activity. 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.”

This argument seems to defy the reality, the Court’s precedent and most importantly the Constitution itself.

Reality since the commerce of medical care does actually exist. The lack of participation of some in the actual purchasing of medical insurance does not in any manner negate this. The individual mandate only confirms what already should exist. Justice Ginsburg, in her part concurring, part dissenting opinion, rejects the Chief Justice’s argument that the uninsured cannot be considered active in the market for health care because the “proximity and degree of connection between the (uninsured) today and (their) subsequent activity is too lacking”. Ginsburg offers statistics that demonstrate that 60% of persons without insurance visit a hospital or doctor’s office each year and that 90% of these will do so within 5 years. So that the “proximity” and the “degree of connection” between the uninsured and their use of the “medical activity” is refuted.

Ginsburg continues by pointing out that it is the role of Congress and not the Court to “delineate the boundaries of the market the Legislature seeks to regulate” and it is not for the Court to decide as Roberts did that only transactions that will occur imminently can be considered a transaction that can be regulated.

The individual mandate to purchase health insurance or to pay a fine has been compared to the mandate of requiring individuals to obtain car insurance before being able to register an automobile which means, no insurance, no legal driving. The major difference is the fact that this mandate which is required by virtually all the States, is exactly that, a State requirement, it is not a federal law.[30] Many think that it should also be up to the States and not the Federal Government to require or not the purchasing of health insurance as Massachusetts did.[31] Nevertheless, the importance of the Federal Government regulating health care cannot be overly emphasized. As Ginsburg so well states, the States cannot handle the problem themselves:

“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”...[32] 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 increase premiums. Higher taxes and increased insurance costs would, in turn, encourage businesses and healthy individuals to leave the State.[33]

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 interest. Congress’ intervention was needed to overcome this collective-action impasse”.

Is it not the role of the Federal Government, when it has the power to do so, to legislate in problem areas that cannot be effectively regulated by the States since a uniform national law is required? And of course Congress could have opted for a program such as Social Security in which the sole payer is the Federal Government. However Congress decided to leave an important role to private insurers and state governments.

According to precedent, the Commerce Clause could effortlessly be considered to authorize Congress to enact the individual mandate requirement of the ACA. Ginsburg clearly refutes Roberts’s allegation that previous Supreme Court decisions do not support “(t)he proposition that Congress may dictate the conduct of an individual today because of prophesied future activity”. Citing Wickard and Gonzales v. Raich,[34] Ginsburg points out that the Court has recognized Congress’s Commerce power to regulate areas because of “a prophesied future transaction”.

Wickard also stressed the importance of taking into account the realities of a substantial effect on the economy more than trying to estimate if the effect was direct or indirect. It is undeniable that the effect on the economics of health care due to those not insured is substantial.

Lopez, the case that finally put a stop to what seemed the never-ending expansion of the interpretation of the Commerce Clause certainly does not contradict this. This case, as earlier mentioned, examined the validity of the Gun-Free Zones Act, a federal law prohibiting the possession of a firearm in a school zone. The Court admits that concerning the 3^rd category of activities that have been considered interstate commerce—activities that have a substantial affect on interstate commerce—previous decisions left a certain doubt if the effect had or not to be a “substantial” one. Lopez makes it clear that this element is required:

“Within this final category, admittedly, our case law has not been clear whether an activity must "affect" or "substantially affect" interstate commerce in order to be within Congress' power to regulate it under the Commerce Clause. (…) We conclude, consistent with the great weight of our case law, that the proper test requires an analysis of whether the regulated activity "substantially affects" interstate commerce.”

The Lopez Court emphasizes the fact that even though “Congress normally is not required to make formal findings as to the substantial burdens that an activity has on interstate commerce” it would have “enabled (the Court) to evaluate the legislative judgment that the activity in question substantially affected interstate commerce”. These substantial burdens on interstate commerce were presented in the ACA case.

The Lopez Court concluded that “a gun in a local school zone is in no sense an economic activity that might, through repetition elsewhere, substantially affect any sort of interstate commerce”. Again this is far from the ACA case where there is an economic activity involved.

Finally, Robert’s argument seems to defy the Constitution by adding a condition to the Commerce Clause that is not required by this text. As Ginsburg states “(t)he Chief Justice limitation of the commerce power to the regulation of those actively engaged in commerce finds no home in the text of the Constitution or our decisions”.

One often speaks of the enumerated powers as the “activities” that the Federal Government can regulate. One could just as soon speak of the “areas” in which the Federal Government has power to regulate. The Constitution itself does not speak of activities. It simply grants power to Congress to “regulate Commerce…among the States”. As Gibbons v. Ogden points out referring to the enumerated powers in the Constitution “(we) know of no rule for construing the extent of such powers other than is given by the language of the instrument which confers them, taken in connection with the purposes for which they were conferred”. Congress has the power to regulate interstate commerce. Precedent has concluded that this means areas or activities that have a substantial effect on interstate commerce. This is undoubtedly the case of the individual mandate.

Nevertheless, it could be argued that the authors of the Constitution did not intend for the Commerce Clause to take on such a momentous role. It must be remembered that under the Articles of Confederation there were many economic problems between the States and protectionism was abundant with the central government having no power to resolve these issues. The Interstate Commerce Clause was the response to this. As Madison so succinctly put it:

“If the new Constitution be examined with accuracy and candor, it will be found that the change which it proposed consists much less in the addition of NEW POWERS to the Union than in the invigoration of it ORIGINAL POWERS. The regulation of commerce, it is true is a new power; but that seems to be an addition which few oppose and from which no apprehensions are entertained.”[35]

However, if the Commerce Clause has lived a life beyond what the Founding Fathers could have imagined, that can also be said of other Constitutional provisions. The Court’s own precedent must take priority here and not the original intentions of the authors of the Constitution unless one is willing to overturn all the progress the Court has made in interpreting the Constitution so that it maintains contemporary significance.

Taxing power:  Nevertheless, we know that the individual mandate was not invalidated. The Government had advanced two arguments supporting the constitutional authority to enact this provision; the first we have seen was the Commerce Clause which was rejected by the majority of the Court. The second, just in case the first was rejected, was that ACA was enacted under the federal authority to lay and collect taxes.

The taxing power as the federal spending power is interpreted largely in the sense that this power is not tied to the other enumerated powers; the Federal Government has the power to tax and spend in areas that it does not have the right to regulate. The obvious problem that can incur is that the Federal Government uses its taxing power to regulate areas that it is not constitutionally allowed to regulate. Certainly it is recognized that taxing may always have some regulatory effect, however this effect should remain “incidental”. The Court generally requires that the tax is a “real tax”, that is, that it raises some revenue, a condition that is not generally difficult to establish.[36] Taxing, as spending, however, must be in the general welfare of the people.

Roberts deems that although the ACA speaks of a “penalty” and not a “tax” that the “text of a statute can sometimes have more than one possible meaning” and offers the usual example of the law that reads “no vehicles in the park” which may or may not allow bicycles in the park. He continues to argue that it is “well established that if a statue has two possible meanings, one of which violates the Constitution, courts should adopt the meaning that does not do so”. The notion of “vehicle” may be open to interpretation, however the difference between a “penalty” and a “tax” is not. The dissenting opinion speaks of “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”. And as it so importantly points out “(t)he issue is not whether Congress had the power to frame the minimum coverage provision as a tax, but whether it did so”. The answer to that is simply, it did not.

As the Government itself states, if the Act was accepted under the Commerce Clause, the individual mandate would mean that persons were required to purchase health insurance or be penalized. Under the taxing power, the individual mandate “only imposes a tax on those without insurance”. Quoting an earlier decision,[37] Roberts states that the “question is not whether that is the most natural interpretation of the mandate, but only whether it is a “fairly possible” one”. And he continues: “every reasonable construction must be resorted to, in order to save a statute from unconstitutionality”.[38] According to him, not buying insurance would just be “another thing the Government taxes like buying gasoline or earning income” without taking into account that buying gasoline is very unlike not buying insurance. And as the dissenting opinion underlines there is a difference between the Court “strain(ing) to construe legislation so as to save it against constitutional attack” and rewriting a statute “to be what it is not”. In this case, there is simply no way (….) to escape what Congress enacted: a mandate that individuals maintain minimum essential coverage, enforced by a penalty”. Referring to precedent the dissenting opinion states that “(w)e have never classified as a tax an exaction imposed for violation of the law, and so too, we have never classified 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 of a penalty—such as “license” (License Tax Cases, 5 Wall. 462 (1867)) or “surcharge” (New York v. United States, (505 U.S. 144)).  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 exaction a “penalty”. Eighteen times in §5000A itself and elsewhere throughout the Act, Congress called the exaction a “penalty”.”

The “nail in he coffin” for the dissenting opinion is that the mandate and penalty are found in Title I of the Act, that is in its core and not in Title IX which contains the Act’s Revenue Provisions.

It seems unfortunate that Roberts felt the necessity to rewrite the text when simply accepting the Court’s own precedent concerning the Commerce Clause could have more logically been the solution. In addition, the majority held that the Anti-Injunction Act that 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”[39] meaning that those subject to a tax must first pay it before suing for a refund does not apply in this case. Roberts deemed that Congress did not intend the payment of the penalty to be treated as a “tax” for the purposes of this Act. Thus the Anti-Injunction Act does not bar this suit. As the dissenting opinion states “(the Government and those who support its position on this point make the remarkable argument that §5000A is not a tax for the purposes of the Anti-Injunction Act, (…) but is a tax for constitutional purposes (…”.) This “carries verbal wizardry too far, deep into the forbidden land of the sophists”.

Is the provision concerning the Medicaid expansion constitutionally valid?

The ACA expands the scope of the Medicaid program, considerably increasing the number of persons that the States would cover. In turn, the Act increases federal funding to cover the States’ cost of this expansion. However, if a State refuses to implement the new coverage requirements it may lose not only the federal funding for those requirements, but all of its federal Medicaid funds. The States challenging the Act argued that this was coercion by the Federal Government and therefore this section of the provision was constitutionally invalid. The majority of the Court agreed.

The Spending Clause of the Constitution[40] grants Congress the power to spend for the general welfare of the people. As with the taxing power, the spending power is not tied to the other enumerated powers. Roberts confirms that the Court precedent has “long recognized that Congress may use this power to grant federal funds to the States, and may condition such a grant upon the States to their “taking certain actions that Congress could not require them to take”.”[41] So that conditions by the Federal Government can be put on the States that accept federal funds. However, there are limits on what can be done to ensure State compliance. As Roberts states, one can look at this as one looks at a contract “(t)he legitimacy of Congress’s exercise of the spending power “thus rests on whether the State voluntarily and knowingly accepts the terms of the ‘contract’”.”[42]

Respecting this limitation is, according to Roberts, critical in “ensuring that Spending Clause legislation does not undermine the status of the States as independent sovereigns in our federal system”.

The States claimed that the threat of losing all federal Medicaid funding “serves no purpose other than to force unwilling States to sign up for the dramatic expansion in health care coverage effected by the Act”. And although Roberts upholds the right of Congress to condition federal funds since it allows Congress to control that the funds are being used for the general welfare as it sees it, he accepts the States reasoning that where such conditions “take the form of threats to terminate other significant independent grants, the conditions are properly viewed as a means of pressuring the States to accept policy changes”. He concludes that the possibility of cutting off all funds to a State not implementing the extension of the Medicaid program is not acceptable.

To support this, Roberts argues that the Medicaid expansion is not a simple modification of the existing program thus treating the existing Medicaid program and the expansion of this program as two independent programs. And this, even though the Social Security Act which includes the original Medicaid provisions provides “(t)he right to alter, amend, or repeal any provision”. A right that was agreed to by the States that accepted this original program.

Nevertheless, Roberts claims that the ACA is not an expansion by “degree” but is “a shift in kind” transforming the program into one “to meet the health care needs of the entire nonelderly population income below 133 percent of the poverty level and no longer a program “to care for the neediest among us, but rather an element of a comprehensive national plan to provide universal health insurance coverage”. Therefore the right to amend or alter the program accepted by the States is not the right “to transform it so dramatically”.

One agrees more with Ginsburg’s opinion on this point. She refers to South Dakota v. Dole[43] that recognized four criteria that condition the federal spending power:

“The conditions placed on federal grants to States must (a) promote the “general welfare,” (b) “unambiguously” inform States what is demanded of them, (c) be germane “to the federal interest in particular national projects or programs,” and (d) not “induce the States to engage in activities that would themselves be unconstitutional”.”

Ginsburg does admit that the Supreme Court in Dole did “mention” without really adopting a limitation which would not allow Congress to offer a “financial inducement…so coercive as to pass the point at which ‘pressure turns to compulsion’.”[44] She also underlines the fact that until the present decision, the Court had never ruled that the funding “crossed the line between temptation and coercion”.

She does not agree with Roberts that the ACA is a “new” program and that if States did not comply they would lose funding “earmarked for any other program”. They would be losing the funding for Medicaid and only Medicaid:

“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 standards”.

She emphasizes the point that the Federal Government could have decided to operate its own health care for the poor as it does with Medicare for the elderly but decided to leave this in the hands of the States with federal funding. She also suggests the right of Congress to repeal its own Medicaid program which of course would then leave the States in the same situation of those who do not comply with the expansion.

She then proceeds to demonstrate that the four conditions in Dole are respected by the expansion program.

Roberts accepts the fact that new Medicaid funding will not be granted to States who refuse to comply with the expansion but refuses the power to end existing Medicaid funding. Ginsburg underlines the danger of this precedent:

“The Chief Justice sees no need to “fix the outermost line,” Steward Machine, 301 U.S., at 591, “where persuasion gives way to coercion,” ante, at 55. Neither do the joint dissenters…Notably, the decision on which they rely, Steward Machine, found the statute at issue inside the line, “wherever the line may be.” 301 U.S., at 591.”

She foresees future cases concerning challenges to the Spending Clause and wonders how one will be able to decide if a State has truly a choice in accepting funds; “the coercion inquiry, therefore appears to involve political judgments that defy judicial calculation”.

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The ACA was “saved” by this decision due particularly to Roberts’ shift in siding with the more liberal Justices. However, as we have seen, the two provisions put into constitutional question were not both accepted; the Federal Government withholding all Medicaid funding in the case of a State deciding not to implement the expansion was considered unconstitutional.[45] The individual mandate was nevertheless upheld and this in itself was essential.

None the less, we have also seen that the individual mandate was upheld in pursuance to the Taxing Clause and not the Interstate Commerce Clause. This is not just a technicality and the importance of this needs to be stressed. If Lopez put an end to the progressive enlarging of the interpretation of the Commerce Clause, the ACA case actually narrows previous interpretations by the Supreme Court. The federal law in Lopez was in an area that could arguably be considered outside the economic realm and the majority was more than likely correct in considering that if that federal law was pursuant to the Commerce Clause, nearly every law would be, thus granting the Federal Government a quasi-general police power. However, this is not the case with the ACA. This latter is in the economic realm and the reasoning in Lopez just does not apply here. When one appreciates the importance of the power that the Commerce Clause grants the Federal Government, one can also understand that limiting this power in any manner could have substantial effect on future federal laws.[46]

During his confirmation hearings before the Senate Judiciary Committee, Roberts gave his views on the role of judges and justices:

Judges and justices are servants of the law, not the other way around. Judges are like umpires. Umpires don’t make the rules; they apply them. The role of an umpire and a judge is critical. They make sure everybody plays by the rules. But it is a limited role. Nobody ever went to a ball game to see the umpire. Judges have to have the humility to recognize that they operate within a system of precedent, shaped by other judges equally striving to live up to the judicial oath.

Respecting precedent thus was thought to be one of the duties of the courts. However, as Adam Winkler[47] pointed out since Roberts entered the Court in 2005 there has been “one landmark decision after another”. Two examples. In a 5-to-4 decision, Citizens United v. Federal Election Commission,[48] the Supreme Court, overturning two of its prior decisions,[49] decided that the First Amendment freedom of speech does not allow the Government to regulate political speech of corporations or unions and found no compelling governmental interest for banning corporations and unions from making election-related independent expenditures. Another 5-to-4 decision[50] held that the Second Amendment’s guarantee of the right of the individual to own a firearm is not linked to the necessity of a militia giving the go ahead to anyone who wants to challenge gun control laws.[51] Certainly, the Supreme Court has overruled its previous decisions before; there is nothing uncommon about this but as Winkler comments “the Roberts Court overturned or ignored precedent, including Rehnquist Court decisions less than a decade old”. He also underscores the fact that this Court “has been uniquely willing to do so by sharply divided 5-4 majorities”. This divide does give the impression that cases are decided using more ideological reasoning than legal reasoning.

These 5-to-4 decisions on delicate and important legal issues are beginning to take their toll on the popularity of the Supreme Court. In a public opinion survey held in April of this year, the Court received very low ratings with only 52% of the people questioned having a favorable view[52] down from 58% in 2010. This low opinion for a Court that has been generally respected crosses party lines be they Republicans, Democrats or independents.

The ACA decision, all 67 fine-printed pages (including concurring, dissenting opinions and footnotes) is just another example.

Roberts rightly announces that the Supreme Court’s role in this case is “again (to) determine whether the Constitution grants Congress power it now asserts, but which many States and individuals believe it does not possess”. He adds: “Resolving this controversy requires us to examine both the limits of the Government’s power, and our own limited role in policing those boundaries”.

He also, as we have seen, makes such statements as one must “not undermine the status of the States as independent sovereigns in our federal system”. He fears that if this were the case 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”.  However, he neglects to add that the so-called independence and sovereignty of the States are and have been limited by the Supreme Court for years. They are certainly limited by the Constitution itself.

It may be time for us all to reread Martin v. Hunter’s Lessee,[53] one of the most important decisions ever handed down concerning federalism in the United States and certainly the most important written by Justice Joseph Story[54] in his thirty-four years on the Court. The case concerned the right of a federal court to review a state court decision. Virginia argued that if a case began in a state court the Federal Supreme Court had no right to review it even when a federal issue was involved. Virginia supported this position by using what is referred to as the “compact theory”, that the States and the Federal Government have a compact and that they are both equally sovereign. This theory is unequivocally rejected by the Court. Story underscores the fact that the Constitution was not “ordained and established” by the States but by the people which means that the people had the authority to grant the Federal Government “all the powers which they deem proper and necessary; to extend or restrain these powers according to their own good pleasure, and to give them a paramount and supreme authority”. Story then avers that both the independence and the sovereignty of the States are not equal to those of the Federal Government. Story leaves no doubt that the Federal Constitution was designed to “operate upon the states”:

“It has been argued that such an appellate jurisdiction over state courts is inconsistent with the genius [14 U.S. 304, 343] of our governments, and the spirit of the constitution. That the latter was never designed to act upon state sovereignties, but only upon the people, and that if the power exists, it will materially impair the sovereignty of the states, and the independence of their courts. We cannot yield to the force of this reasoning; it assumes principles which we cannot admit, and draws conclusions to which we do not yield our assent.

It is a mistake that the constitution was not designed to operate upon states, in their corporate capacities. It is crowded with provisions which restrain or annul the sovereignty of the states in some of the highest branches of their prerogatives. The tenth section of the first article contains a long list of disabilities and prohibitions imposed upon the states. Surely, when such essential portions of state sovereignty are taken away, or prohibited to be exercised, it cannot be correctly asserted that the constitution does not act upon the states. The language of the constitution is also imperative upon the states as to the performance of many duties. It is imperative upon the state legislatures to make laws prescribing the time, places, and manner of holding elections for senators and representatives, and for electors of president and vice-president. And in these, as well as some other cases, congress have a right to revise, amend, or supercede the laws which may be passed by state legislatures. When, therefore, the states are stripped of some of the highest attributes of sovereignty, and the same are given to the United States; when the legislatures of the states are, in some [14 U.S. 304, 344] respects, under the control of congress, and in every case are, under the constitution, bound by the paramount authority of the United States; it is certainly difficult to support the argument that the appellate power over the decisions of state courts is contrary to the genius of our institutions. The courts of the United States can, without question, revise the proceedings of the executive and legislative authorities of the states, and if they are found to be contrary to the constitution, may declare them to be of no legal validity. Surely the exercise of the same right over judicial tribunals is not a higher or more dangerous act of sovereign power.

Nor can such a right be deemed to impair the independence of state judges. It is assuming the very ground in controversy to assert that they possess an absolute independence of the United States. In respect to the powers granted to the United States, they are not independent; they are expressly bound to obedience by the letter of the constitution; and if they should unintentionally transcend their authority, or misconstrue the constitution, there is no more reason for giving their judgments an absolute and irresistible force, than for giving it to the acts of the other co-ordinate departments of state sovereignty.”

As Chief Justice John Marshall stated in McCulloch v. Maryland: “(…) 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”. Many conservatives will try to limit these powers and many liberals will fight for enlarging them. The Supreme Court has begun its new session. Some of the cases it will decide on concern such important social issues as same-sex marriage, affirmative action in higher education and the Voting Rights Act of 1965 which inter alia requires the Federal Government to review modification in election proceedings in States that had a history of discrimination. Many are wondering if the Chief Justice will shift to a center position as they feel this is what happened in the ACA case. It is impossible to predict this or not. However, a close reading of the ACA case does not lend itself to believing that Roberts has in any way become a “liberal”. This decision limits the Commerce Clause and seems to stress the importance of the independence and sovereignty of the States more than the Supreme Court has done in a rather long time.