Excerpts From High Court Ruling Upholding Health-Care Law

The U.S. Supreme Court upheld the core provisions of the Patient Protection and Affordable Care Act, which seeks to expand health-insurance coverage to millions of people.

Chief Justice John Roberts, appointed by Republican President George W. Bush, wrote the opinion for a 5-4 majority. The court held that while Congress can’t require Americans to buy insurance, the government can tax people who don’t have coverage. In its main holdings, the opinion was joined by Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan, who were appointed by Democratic presidents.

Dissenting were Justices Antonin Scalia, Anthony Kennedy, Clarence Thomas and Samuel Alito, all appointed by Republican presidents. In a joint opinion, the four said they would have ruled that the minimum-insurance requirement exceeded Congress’s constitutional power under the Commerce Clause and would have thrown out the entire law.

The court also ruled that Congress may put conditions on money provided to states for an expansion of Medicaid, yet can’t take away money from existing Medicaid programs if a state doesn’t participate.

Following are excerpts from the opinions:

From Roberts’s opinion for the court:

“Given its expansive scope, it is no surprise that Congress 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.”

>---------<

The individual mandate “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. Every day individuals do not do an infinite number of things.”

>---------<

“Many Americans do not eat a balanced diet,” the ruling said. “Under the government’s theory, Congress could address the diet problem by ordering everyone to buy vegetables.”

>---------<

“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.”’

>---------<

“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.”

>---------<

“The individual mandate forces individuals into commerce precisely because they elected to refrain from commercial activity. Such a law cannot be sustained under a clause authorizing Congress to ‘regulate Commerce.”’

>---------<

The government argued that “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 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 shared responsibility 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 insurance, and, by statute, it can never be more. It may often be a reasonable financial decision to make the payment rather than purchase insurance.”

>---------<

“It is abundantly clear the Constitution does not guarantee that individuals may avoid taxation through inactivity.”

>---------<

“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.”

>---------<

“In this case, the financial ‘inducement’ Congress has chosen” -- with the power to withhold Medicaid funding from states that don’t participate in the expanded program -- “is much more than ‘relatively mild encouragement’ -- it is a gun to the head.”

>---------<

“Nothing in our opinion precludes Congress from offering funds under the Affordable Care Act to expand the availability 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.”

>---------<

From the dissent by Scalia, Kennedy, Thomas and Alito:

“The act before us here exceeds federal power both in mandating the purchase of health insurance and in denying non- consenting 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 entire statute is inoperative.”

>---------<

“Congress’s 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.”

>---------<

“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.”

>---------<

“To say that the individual mandate merely imposes a tax is not to interpret the statute but to rewrite it.”

>---------<

“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.”

>---------<

“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 sanction of a total cut-off of Medicaid funds to a supposedly non-coercive cut-off of only the incremental funds that the act makes available.”

>---------<

From the opinion written by Ginsburg, concurring in part and dissenting in part:

“In the Social Security 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.”

>---------<

“Whatever one thinks of the policy decision Congress made, it was Congress’s prerogative to make it. Reviewed with appropriate deference, the minimum coverage provision, allied to the guaranteed-issue and community-rating prescriptions, should survive measurement under the Commerce and Necessary and Proper clauses.”

>---------<

“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.”

>---------<

“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 nourishment. She will get no free ride or food, at the expense of another consumer forced to pay an inflated price.”

>---------<

“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,” Ginsburg wrote, saying nobody would offer the “hypothetical” possibility of “a vegetarian state as a credible reason to deny Congress the authority 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.”

>---------<

“Future Congresses are not bound by their predecessors’ dispositions; they have authority to spend federal revenue as they see fit. The federal government, 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.”

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.