Supreme Court Upholds Health Care Mandate as Tax

The individual health care mandate was upheld as a tax, while the Medicaid expansion is said to violate the Constitution, according to the Supreme Court’s widely anticipated ruling this morning. Excerpts of the Court opinion appear below.

In 2010, Congress enacted the Patient Protection and Affordable Care Act in order to increase the number of Americans covered by health insurance and decrease the cost of health care. One key provision is the individual mandate, which requires most Americans to maintain“minimum essential” health insurance coverage.

For individuals who are not exempt, and who do not receive health insurance through an employer or government program, the means of satisfying the requirement is to purchase insurance from a private company. Beginning in 2014, those who do not comply with the mandate must make a “[s]hared responsibility payment” to the Federal Government. The Act provides that this “penalty” will be paid to the Internal Revenue Service with an individual’s taxes, and “shall be assessed and collected in the same manner” as tax penalties.

Another key provision of the Act is the Medicaid expansion. The current Medicaid program offers federal funding to States to assist pregnant women, children, needy families, the blind, the elderly, and the disabled in obtaining medical care. The Affordable Care Act expands the scope of the Medicaid program and increases the number of individuals the States must cover.

The most straightforward reading of the individual mandate is that it commands individuals to purchase insurance. But, for reasons explained, the Commerce Clause does not give Congress that power. It is therefore necessary to turn to the Government’s alternative argument: that the mandate may be upheld as within Congress’s power to “lay and collect Taxes.”

The opinion of the Court with respect to Part III–C concludes that the individual mandate may be upheld as within Congress’s power under the Taxing Clause.

The Court rules that the Medicaid expansion violates the Constitution by threatening States with the loss of their existing Medicaid funding if they decline to comply with the expansion.

Read the full Supreme Court Ruling on the Patient Protection and Affordable Care Act.

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