The Supreme Court Upholds the Affordable Care Act: An Analysis


I can imagine the first few pages of the Chief Justice's opinion being copied by every high school civics teacher; the decision reads like a mini legal history class about the creation of the Constitution, the structure of Congressional power, and the limited reach of the federal government. The basic point is that this case exists because Congress must base all its actions on a specific grant of power in Article I of the Constitution. If a particular law or Congressional action cannot be justified by an enumerated power, then the law fails. Notably, this is not true of the States. States can tell their citizens to buy health insurance because states have what lawyers call the "police power," or a general grant of power to pass laws to protect the welfare of their citizens. The federal government lacks the police power; instead, our federal system created a more limited reach for Congress and the President.

That reach, however, was never meant to be anemic, and the Chief Justice and Justice Ginsburg remind us of that today.

So, the Government had to justify the ACA on a particular enumerated power. First it tried the Commerce Clause (Article I, Section 8, clause 3), which allows Congress to "regulate interstate commerce," or commercial activity between the States. Alternatively, the Government tried the Necessary and Proper Clause (Art. I, Sec. 8, cl. 18), which is kind of a catch-all that allows Congress to pass laws it deems necessary to fulfill its obligations. Third, the Government argued that the ACA was constitutional under the Taxing Clause (Art I, Sec. 8, cl. 1), which gives Congress the power to "lay and collect taxes." Justices Ginsburg, Breyer, Sotomayor, and Kagan would have found the ACA constitutional under the Commerce Clause. Chief Justice Roberts disagreed, but rescued the law as a lawful exaction under Congress's power to lay and collect taxes. At One First Street (the Supreme Court's address), that different rationale matters; on Main Street, it still means the law survives: you only need one enumerated power to justify a law.

Commerce Clause: The Government argued that because insurance companies can no longer discriminate and have to charge most people the same price for the same plan, the only way the industry could survive was by forcing healthy people into the insurance market. Congress can pass that mandate because the failure to purchase insurance has a "substantial and deleterious effect on interstate commerce" (Nat'l Fed. of Ind. Bus. v. Sebelius, slip. op., at 17 (Robert, C.J.)). Indeed it does, the Government argued. If you only buy insurance when you're sick or if only the sick buy insurance, insurance companies could either not sustain affordable plans or would drop out of business entirely. And, even without the ACA reforms, the decision to not buy insurance shifts costs to those who do, driving up costs of both health insurance for the insured and health care for everyone.

But, although Congress's power to regulate interstate commerce may be broad, it's not unlimited; it, at a minimum, requires that some commerce already exist: "Congress's power to regulate commerce presupposes the existence of the commercial activity to be regulated," and here, there was no such activity (18). By ordering the uninsured to become insured, the mandate creates activity, compelling some of those who had been inactive to become active. To illustrate the point, he analogizes to buying a car: Between the time you buy your first car and your second car, you can hardly be said to be "active in the market" for cars. To see it any other way would be to place absolutely no limits on what Congress could tell us to do. The Government's inability to articulate a so-called "limiting principle" doomed the Commerce Clause argument.

Wickard, the Chief Justice said, was different. Congress could stop the wheat farmer from growing wheat because he was already actively engaged in the production of wheat. Uninsured Americans are not active in the business of producing health insurance. 

That is indeed curious. By avoiding the traditional insurance market, I am still choosing alternate insurance, that is, my income, my savings, the equity in my house, my generous family members, all of which could be seen as "insuring" me against costs associated with medical care. And, even if you think that argument is too cute by half, the uninsured are still active in the insurance market by the increases in costs they shift to the insured.

Necessary and Proper Clause: In any event, the Chief Justice disagreed with Government on the Commerce Clause argument. As it did with the alternative Necessary and Proper Clause justification. The Government argued that the mandate was an essential part of a comprehensive legislative scheme of economic regulation (27). But, Chief Justice Roberts rejected this because his reading of Court precedent said that this Clause was not an independent source of power, but rather a way to expand Congressional reach justified somewhere else.

Taxing Power: The Chief Justice found that independent justification in the Taxing Clause. 

The individual mandate imposed a tax on those who did not buy health insurance (31). The President may have gone to great lengths not to call it a tax, but the particular labels politicians afix to certain things has very little relevance for the Constitutionality of the resulting legislative enactment. The ACA tells us to buy health insurance, and if we do not buy health insurance, our taxes will go up to some degree. That "penalty" is collected by the IRS, so since the word "penalty" normally describes some punishment for breaking the law, the payment to the IRS for choosing not to buy insurance seems much more like a tax. That is the legalese version of the old adage of inductive reasoning: "If it looks like a tax, swims like a duck, and quacks like a duck, then it's probably a duck."

Congress has the power to influence our behavior through taxation (37) and it can regulate inactivity with a tax (41). Nothing in the Constitution prevents either.

So, he concluded as follows:

The Federal Government does not have the power to order people to buy health insurance. [The mandate] would therefore be unconstitutional if read as a command. The Federal Government does have the power to impose a tax on those without health insurance. [The mandate) is therefore constitutional, because it can reasonably be read as a tax. 

Medicaid Expansion: The ACA expands Medicaid eligibility to include all those with income up to 133% of the poverty level. It also changes quite a few other things about Medicaid reimbursements, who else can join the Medicaid program, and so on. Congress sought to ensure expanded coverage by telling States, who receive a big block of federal money and then administer Medicaid, that if they don't follow the new eligibility rules, they lose all their Medicaid funding, not just the additional moneys that came with the ACA. And, although Congress has the power to attach conditions to federal money, it cannot coerce the states into doing the federal government's job. The Chief Justice saw the Medicaid section of the ACA as an entirely new program, not an expansion of the old Medicaid, and threatening to deny all funds seemed like a rather blunt object where a sharp blade would have been both more appropriate and constitutional.

Essentially, then, the Chief Justice (along with the conservatives and two liberals) turned the Medicaid expansion section into an optional provision of the ACA. 

Justice Ginsburg would have upheld the ACA as a lawful use of Congress's power to regulate interstate commerce. She also would have upheld the Medicaid expansion as written, but only got one other vote on the latter point. Justice Ginsburg's opinion is noted for its traditional (since the 1930s) commerce clause analysis: Congress has the power to regulate activity that substantially affects interstate commerce and courts should give great deference to Congressional determinations of the activity and effects (15). This lowest form of rational basis review was the New Deal Court's revolution and Justice Ginsburg did not want to see it tossed to the side.

She agreed with the Government's central reasoning: the refusal to buy insurance and ultimately consume health care drives up market prices, shifts costs, and reduces efficiency. That is a substantial enough effect on interstate commerce. She challenged the Chief Justice directly: It is Congress that defines the boundary of the market, not the Court, and Congress can regulate activity today based on future events. That, after all, was what Wickard was about. And, the health insurance market is nothing like the automobile market: hospitals have to provide care in emergency rooms, no one has to provide cars (21). Plus, there is a clear limiting principle. The commerce power is limited by case law (27) and by logic. And, both demolish the Chief Justice's concern about a Congress mandating the purchase of broccoli. 

Justice Ginsburg responds:

Consider the chain of inferences the Court would have to accept to conclude that a vegetable-purchase mandate was likely to have a substantial effect on the health-care costs borne by lithe Americans. The Court would have to believe that individuals forced to buy vegetables would then eat them (instead of throwing or giving them away), would prepare the vegetables in a healthy way (steamed or raw, not deep-fried), would cut back on unhealthy foods, and would not allow other factors (such as lack of exercise or little sleep) to trump the improved diet. Such “pil[ing of] inference upon inference” is just what the Court refused to do in [its previous cases] (29). 

She also takes issue with the Chief Justice's analysis of the Medicaid expansion issue. At its heart, the majority's argument is that threatening to take away all Medicaid funding is coercive and overbroad. But, as Justice Ginsburg states, that is the not the fulcrum upon which the Court has decided its Spending Clause cases. Coercion is saying that there is a federally mandated minimum drinking age and then, if the States do not comply, withhoding a portion of federal highway dollars to those States (South Dakota v. Dole) (Ginsburg, J., concurring, in part, dissenting, in part, at 47). The problem in that case was not that the particular condition placed on federal money was draconian; rather, it is that highway money had nothing to do with a federal drinking age.


This decision is a vindication for President Obama. The ACA was a signature legislative achievement of his first term and now, the Court has affirmed his efforts with this holding:

The Affordable Care Act's requirement that certain individuals pay a financial penalty for not obtaining health insurance may be reasonably 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 (Roberts, C.J., at 44).

This holding also resurrects the legal canon that a judge's job is to uphold Congressional legislation if he could. If we could not justify the ACA under the Commerce Clause or the Necessary and Proper Clause, but can justify it under the Taxing Clause, then the ACA is still a lawful exercise of one of Congress's enumerated powers.

Perhaps the Chief Justice was worried that his Court was on the brink of losing the respect of about half the population. Bush v. Gore was 12 years ago but very much on our minds; it feels like Ciizens United was just yesterday; another decision hostile to the American left would have been a third strike that could have made the Supreme Court a focal point of the President's re-election campaign. Perhaps the Chief Justice did not want to be remembered for returning jurisprudence to the 1920s. Then again, maybe he really believes in the law he wrote in his opinion. 

Whatever his motives, the Chief Justice was the "swing vote" for the ACA. And, that is a good thing. For too long, this has been Justice Kennedy's court, filling the swing vote role that Justice O'Connor filled before him and that Justice Powell filled before her. It is refreshing to see someone else see the importance of building bridges between the polarized wings of the Court.

The Chief Justice's refusal to be the fifth vote for a Commerce Clause holding may have implications for Congres's power to enact social welfare legislation. The Court had already invalidated parts of the Violence Against Women Act (Morrison (2000)) and the Gun Free School Zones Act (Lopez), holding that a civil remedy to victims of gender-based violence and a ban on guns near schools had no relation to interstate commerce. This case offers us another example of federal social policy that could not be justified under the Commerce Clause, even though the post-New Deal conventional wisdom was that this power was quite expansive. Congress's power in this area is smaller than it used to be; there can be little doubt about that. Yet, Congress's power under the Taxing Clause may now be broader than previously thought. Only time will tell what this means for future social legislation.

The 5-4 vote, and the alternative holding that won the day, also proves the essential role one justice can play and the importance of electing presidents and senators that share our values on important issues facing our nation today. As we will discuss in the coming days, this may have implications for the Supreme Court's eventual consideration of the Defense of Marriage Act, marriage recognition for the gay community, and other social policies.


Ari Ezra Waldman teaches at Brooklyn Law School and is concurrently getting his PhD at Columbia University in New York City. He is a 2002 graduate of Harvard College and a 2005 graduate of Harvard Law School. His research focuses on technology, privacy, speech, and gay rights. Ari will be writing weekly posts on law and various LGBT issues. 

Follow Ari on Twitter at @ariezrawaldman.



  1. Randal Oulton says

    I’m pretty bewildered that forcing people to buy health insurance counts as healthcare. Why not just have universal health-care insurance the way the rest of the G7 and Europe does, where there is a single payer, the government? I get the aspect of *cost* to a country’s purse, but the tally for the Iraq and Afghanistan ventures has reached 4 trillion and counting…. and what did you get for it? Why not invest in your own people, instead, through public healthcare? Makes no sense financially. As for the tired argument about public sector healthcare being inferior, feh. Check this list of life expectancies and find the United States on the list: hint, keep scrolling down.

  2. Jeff says

    As no other Justice joined Roberts’ Commerce Clause and Necessary and Proper Clause analyses in Parts III-A and III-B, are those parts of the ruling binding? Or are they dicta?

  3. Randy says

    Roberts is no fool. By forcing ACA to be regarded as a tax, Obama gets pigeonholed as a tax-raiser. This will surely work in Romney’s favor during election season, and Roberts may soon see more of his ilk on the Court.

  4. Mike8787 says

    Randall, the reason we have the ACA we do is because Republicans wouldn’t permit the type of plan you suggested. Trust me, Democratic legislators tried.

  5. Onnyjay says

    Don’t be fooled: this is Roberts’s strategic ploy to curry favor with the left so that he can point to his “impartiality” when he obilterates the federal government’s ability to do its job. Case in point: Virginia’s Tea-Bag AG, Cucinelli, is praising the decision. That should tell you more than you need to know about its likely impact further down the road. Read Ezra Klein’s analysis of the decision in the WaPo.

  6. BZ says

    Ari writes:
    “By avoiding the traditional insurance market, I am still choosing alternate insurance, that is, my income, my savings, the equity in my house, my generous family members, all of which could be seen as “insuring” me against costs associated with medical care. And, even if you think that argument is too cute by half, the uninsured are still active in the insurance market by the increases in costs they shift to the insured.”

    That is not farfetched at all. By purchasing insurance, you are getting another party (the insurance company) to underwrite a portion of your risk. It should be remembered that a significant portion of healthcare insurance carriers are actually self-insured groups. For example, many labor unions are self-insured; so is the federal government. If you are a member of the Teamsters, it may appear to you that your insurance company is Blue Cross, but in reality it’s the Teamsters; Blue Cross just handles the administrative details and pays the claims on behalf of the Teamsters, but it is the union that determines what your benefits, copay, coinsurance etc. will be. (That doesn’t stop people from blaming Blue Cross anyway.)

    So: an individual who elects to go without insurance already has risk; it’s just that he or she has decided to underwrite that risk themselves rather than pay an insurance company to do it. Similarly, to the extent that you buy what Mitt Romney said that “corporations are people” then a self-insured company would be in an analogous situation. They are underwriting their own risk, and just paying the insurance company to keep tabs on the claims for them.

  7. westcoast88 says

    Thank you, thank you, thank you for the explanation. What a lesson in American government and the Constitution. If only the talking heads at Fox News could understand this.

  8. BZ says


    Even if Congress had passed single-payer “Medicare for All” coverage, there would still be a role for private insurance companies. Medicare Parts A and B (physicians and hospitals) and Medicare Part D (prescription drugs) have coverage gaps, most famously the “donut hole” for Rx. Many retirees elect to purchase supplemental Medigap or Medicare Advantage coverage that provides expanded benefits.

    A single-payer system, then, would have set the “floor” level for healthcare coverage. If you wanted more than what the “floor” would have given you, you could always buy additional insurance that was regulated by the federal government. That’s essentially how Medicare works today. It’s kind of what ACA attempted to do with Medicaid.

    It should be noted that ACA wasn’t designed to lower healthcare costs. It was designed to maximize the number of people who have healthcare coverage – an important if subtle distinction.

    (In reality, there are a number of market and regulatory forces that are forcing changes in the healthcare industry, and it is quite likely that these would have continued to drive change regardless of whether or not the SCOTUS struck down ACA.)

  9. Bob says

    — Because Roberts is all about POLITICS and about his legacy. With this masterstroke, he loses nothing for his side, since it can be repealed by Congress, but he gains traction for more unconscionably political decisions such as Citizens United.
    Also, by “tossing a bone to the moderates”, he leaves room to rule against Gay marriage, without looking like a total tool of the catholic bishops and Koches.

  10. VDUFFORD says

    Ari good Analysis of this.This was important to me because of my pre-existing condition of Crohn’s. If I wanted to change jobs I could not get insurance so I have had to stay with a company that I have lost respect for. Have missed several good opportunities in the past because of this fear and its been 15 years.
    BZ comment above has no idea how much medical bills add up to think he can self insure himself.I rack up 8 thousand every eight weeks for a damn drug to stay alive!

  11. anon says

    The constitution has a number of flaws that make some court decisions difficult. The flaw here is that taxing powers would seem to not fund the govt. but go directly to insurance companies. Insurance vouchers would have been far less controversial. Now, only those insurance companies that the IRS approves of can sell health insurance, which may mean a monopoly of essential services and eliminate self-insurance programs. The IRS now dictates who gets what kind of insurance.

    Roberts decision limiting the commerce clause would be upheld by the four dissenters, so it would be the guiding principle under the law, but this would need testing in future cases.

  12. James E. Pietrangelo, II says

    Towleroad seems more and more like the liberal version of Foxnews. In its postings it often just throws journalistic integrity to the wind. If Towleroad isn’t outright calling conservatives/Republicans/opponents names, or engaging in naked partisan rhetoric, it is promoting biased opinion as objective analysis. And the American consciousness loses out as a result (as it does when biased outlets like Foxnews do the same thing).

    Case in point is Ari’s legal “analysis” of topical subjects these days; the “analysis” is anything but. His discussion of the Supreme Court decision here is ridiculously biased and quite amateurish. Rather than simply discuss the legal principles and reasoning of the decision, Ari prominently trumpets the decision as a “victory” and “vindication” for President Obama and the Democratic Party. Obviously, Ari is a Democrat and an Obama supporter (if not sycophant). Ari completely ignores the fact that, if political score is going to be kept as to this decision, it was more akin to a draw for Republicans and Democrats, especially since the Medicaid-expansion requirement was essentially struck down, and, more importantly, because the individual mandate was deemed unconstitutional under the Commerce Clause. The “cat has got Ari’s tongue” when it comes to discussing the fact that his beloved President Obama previously declared—in defending the mandate—that it was absolutely not a “tax.” How can a non-tax be a tax? Is this another case of Obama’s word being worth dirt, as with his promise to repeal DADT (which Gay-rights activists caused to be repealed, not Obama)? Ari also completely ignores—parroting Obama that “this is done”—the obvious next question in this issue: if the mandate is a “tax,” can it survive legally and realistically as a tax? Taxes have to be imposed with a certain amount of due process. Ari also engages in the most obvious stereotyping and bashing of Chief Judge Roberts as a bad guy simply because he is a Republican appointee and (Ari presumes) conservative, while Obama is a Democrat. While presuming Obama’s motives as the purest with regard to his executive legislative actions like healthcare, Ari assumes the worst of Roberts—ironically the man responsible for upholding his beloved Obama’s own mandate—portraying Roberts as self-serving and political, if not desperate, and positing only negative reasons for his choice of vote. Ari writes: “while it is fun to speculate about the Chief Justice’s motives for joining the moderate wing of the Court to uphold the ACA — Was he concerned about his legacy? Did he not want to be the man who took us back to the Lochner Era? Was he concerned about the legitimacy of the Court after Bush v. Gore and Citizens United? — such speculation is baseless without inside information, which may not come out for decades. It may indeed be the case that the Chief Justice actually believes what he wrote!” He repeats this theme a second time later. Insidiously, and un-analytically, Ari fully indulges in his crass speculation about Roberts’ motives only to declare afterwards that such speculation is “baseless.” Such speculation is indeed baseless. It could very well be that Roberts voted as he did solely out of a habitual conscientious desire to remain true to the Constitution and that Ari—in all his own ideological fervor—fails to give Roberts proper credit for crucially ruling in the favor of someone politically opposite from him. It could be that the question of the “legitimacy” of the Supreme Court never entered Roberts’ mind in making his decision including because Bush v. Gore and Citizens United were themselves proper decisions consistent with the Constitution. Ari omits to discuss any of these elements.

    People who merely trade power with their enemies rather than establish just practices for all become their enemies. Americans—including LGBT Americans—who use the tactics of the oppressor become the oppressor. Towleroad and Ari should stick to the facts and not the FOX.

  13. Jorge says

    Correction: Roberts DID provide a 5th vote to reach the Commerce Clause holding, which is a debacle in and of itself.

    Under the canon of constitutional avoidance, why did they need to analyze the commerce clause question if the ultimate outcome was “Constitutional?” It makes no sense.

    It’s also internally inconsistent. So, the government can’t “force me to buy broccoli or they’ll tax me” under the Commerce Clause, but they can “force me to buy broccoli or they will tax me” under the Tax clause? That is ridiculous.

    And that’s without even getting into the “merits” of the conservative commerce clause holding.

    I’m thrilled, thrilled with the outcome, but very disappointed in a lot of the reasoning.

  14. Bingo says

    Anon above thinks the IRS will be approving insurance companies. Not so. Govt sets a standard for what a plan has to include.

    The penalty you will pay if you don’t get insurance is collected by the IRS, doesn’t go to insurance companies, lands somewhere in health and human services.

    If anyone wants to see what your options are if you live in Massachusetts and need to get coverage (as I did), check out:

  15. BZ says


    I’m sorry you’re having so much pain in your life. As it happens I’m very much aware of how much medical and pharmacy bills can rack up to. I’m an IT manager for healthcare (Medicare and Pharmacy) so I can give you precise figures for how many people come close to hitting the annual and lifetime maximums for prescription drug coverage. Out of 98K members for our healthplan, we have 8 people who have spent $1M/year on a combination of medical and pharmaceutical benefits, and another 15 or so who are within 75% of their $1M maximum.

    I think the ACA is a Very Good Thing. My employer, a large healthcare insurance company, thinks otherwise. But I don’t change my political views to suit my employer.

    Here’s a useful tip: as it turns out, these benefit maximums (known to insiders as “accumulators”) are an incredible pain to automate – so much so that in some instances the insurance company may not bother to track whether you’re actually close to the limit. Or whether your coverage has actually expired…

    But you didn’t hear that from me.

  16. BZ says


    PS. About changing jobs – go right ahead. If you get a new job that offers group health benefits you can’t be denied within the first few days of your employment regardless of preexisting conditions – that’s called “open enrollment”. It’s only if you apply as an individual, or if you miss the open enrollment window that you have to worry about preexisting conditions.

  17. Bill Perdue says

    Obama’s health care scam – an insurance company, HMO, Big Pharma sponsored measure that increases their profits and places new taxes on workers – has, like everything dealing with the needs of workers and the greed of the rich coming from Wall Street’s Lap Dog in Chief, the stench of corruption attached to it.

    Obama got 20 million in bribes to scuttle the public option. “While some sunlight has been shed on the hefty sums shoveled into congressional campaign coffers in an effort to influence the Democrats’ massive healthcare bill, little attention has been focused on the far larger sums received by President Barack Obama while he was a candidate in 2008. A new figure, based on an exclusive analysis created for Raw Story by the Center for Responsive Politics, shows that President Obama received a staggering $20,175,303.00 from the… healthcare industry during the 2008 election cycle, nearly three times the amount of his presidential rival John McCain. McCain took in $7,758,289, the Center found.” Common Dreams 01 12 2010.

    In this Washington Post article you can see the vast amounts given in bribes by the health industry and compare it to the vote in Congress which cut the public option and never even considered socialized medicine, the real and only answer to the US health care crisis.

    Obama had to work hard for his bribes. “White House declines to disclose visits by health industry executives… Citing an argument used by the Bush administration, the Secret Service rejects a request from a watchdog group to list those who have visited the White House to discuss the healthcare overhaul. WASHINGTON — Invoking an argument used by President George W. Bush, the Obama administration has turned down a request from a watchdog group for a list of health industry executives who have visited the White House to discuss the massive healthcare overhaul. Citizens for Responsibility and Ethics in Washington sent a letter to the Secret Service asking about visits from 18 executives representing health insurers, drug makers, doctors and other players in the debate. The group wants the material in order to gauge the influence of those executives in crafting a new healthcare policy.” LA Times 07 22 2009.

    I think that it’s a very good idea for Democrats to continue to applaud Obamacare. In the long run it’ll work to distance them from working people just as Romney’s plan will do for Republicans.

  18. Jennifer says

    If we are forced to buy health insurance then what is the purpose of Medicaid? If we have to buy health insurance or pay a penalty for for lack of insurance, then Medicaid serves no purpose. Medicaid is designed for those who can’t afford insurance and medical care. If the purchase of health care is mandatory, then Medicaid should be eliminated. Our government can’t force us to buy insurance but allow those in poverty a “free pass” on Medicaid. It should be all or nothing!

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