SUPREME COURT OF THE UNITED STATES
_________________
Nos. 11–393, 11–398 and
11–400
_________________
NATIONAL FEDERATION OF INDEPENDENT
BUSINESS, et al., PETITIONERS
11–393
v.
KATHLEEN SEBELIUS, SECRETARY OF HEALTH
AND HUMAN SERVICES, et al.
DEPARTMENT OF HEALTH AND HUMAN SERVICES,
et al., PETITIONERS
11–398
v.
FLORIDA et al.
FLORIDA, et al., PETITIONERS
11–400
v.
DEPARTMENT OF HEALTH AND HUMAN SERVICES
et al.
on writs of certiorari to the united states
court of appeals for the eleventh circuit
[June 28, 2012]
Justice Ginsburg, with whom Justice Sotomayor
joins, and with whom Justice Breyer and Justice Kagan join as to
Parts I, II, III, and IV, concurring in part, concurring in the
judgment in part, and dissenting in part.
I agree with The Chief Justice that the
Anti-Injunction Act does not bar the Court’s consideration of
this case, and that the minimum coverage provision is a proper
exercise of Congress’ taxing power. I therefore join Parts I,
II, and III–C of The Chief Justice’s opinion. Unlike
The Chief Justice, however, I would hold, alternatively, that the
Commerce Clause authorizes Congress to enact the minimum coverage
provision. I would also hold that the Spending Clause permits the
Medicaid expansion exactly as Congress enacted it.
I
The provision of health care is today a
concern of national dimension, just as the provision of old-age and
survivors’ benefits was in the 1930’s. In the Social
Secu- rity 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.
Since 1937, our precedent has recognized
Congress’ large authority to set the Nation’s course in
the economic and social welfare realm. See
United States v.
Darby,
312 U.S.
100, 115 (1941) (overruling
Hammer v.
Dagenhart,
247 U.S.
251 (1918), and recognizing that “regulations of commerce
which do not infringe some constitutional prohibi- tion are within
the plenary power conferred on Congress by the Commerce
Clause”);
NLRB v.
Jones & Laughlin Steel
Corp.,
301 U.S.
1, 37 (1937) (“[The commerce] power is plenary and may be
exerted to protect interstate commerce no matter what the source of
the dangers which threaten it.” (internal quotation marks
omitted)). The Chief Justice’s crabbed reading of the
Commerce Clause harks back to the era in which the Court routinely
thwarted Congress’ efforts to regulate the national economy
in the interest of those who labor to sustain it. See,
e.g.,
Railroad Retirement Bd. v.
Alton R. Co.,
295 U.S.
330, 362, 368 (1935) (invalidating compulsory retirement and
pension plan for employees of carriers subject to the Interstate
Commerce Act; Court found law related essentially “to the
social welfare of the worker, and therefore remote from any
regulation of commerce as such”). It is a reading that should
not have staying power.
A
In enacting the Patient Protection and
Affordable Care Act (ACA), Congress comprehensively reformed the
national market for health-care products and services. By any
measure, that market is immense. Collectively, Americans spent $2.5
trillion on health care in 2009, accounting for 17.6% of our
Nation’s economy. 42 U. S. C. §18091(2)(B)
(2006 ed., Supp. IV). Within the next decade, it is anticipated,
spending on health care will nearly double.
Ibid.
The health-care market’s size is not its
only distinctive feature. Unlike the market for almost any other
product or service, the market for medical care is one in which all
individuals inevitably participate. Virtually every person residing
in the United States, sooner or later, will visit a doctor or other
health-care professional. See Dept. of Health and Human Services,
National Center for Health Statistics, Summary Health Statistics
for U. S. Adults: National Health Interview Survey 2009, Ser.
10, No. 249, p. 124, Table 37 (Dec. 2010) (Over 99.5% of adults
above 65 have visited a health-care professional.). Most people
will do so repeatedly. See
id., at 115, Table 34 (In 2009
alone, 64% of adults made two or more visits to a doctor’s
office.).
When individuals make those visits, they face
another reality of the current market for medical care: its high
cost. In 2010, on average, an individual in the United States
incurred over $7,000 in health-care expenses. Dept. of Health and
Human Services, Centers for Medicare and Medicaid Services,
Historic National Health Expenditure Data, National Health
Expenditures: Se- lected Calendar Years 1960–2010 (Table 1).
Over a lifetime, costs mount to hundreds of thousands of dollars.
See Alemayahu & Warner, The Lifetime Distribution of Health
Care Costs, in 39 Health Service Research 627, 635 (June 2004).
When a person requires nonroutine care, the cost will generally
exceed what he or she can afford to pay. A single hospital stay,
for instance, typically costs upwards of $10,000. See Dept. of
Health and Human Services, Office of Health Policy, ASPE Research
Brief: The Value of Health Insurance 5 (May 2011). Treatments for
many serious, though not uncommon, conditions similarly cost a
substantial sum. Brief for Economic Scholars as
Amici Curiae
in No. 11–398, p. 10 (citing a study indicating that, in
1998, the cost of treating a heart attack for the first 90 days
exceeded $20,000, while the annual cost of treating certain cancers
was more than $50,000).
Although every U. S. domiciliary will incur
significant medical expenses during his or her lifetime, the time
when care will be needed is often unpredictable. An accident, a
heart attack, or a cancer diagnosis commonly occurs without
warning. Inescapably, we are all at peril of needing medical care
without a moment’s notice. See,
e.g., Campbell, Down
the Insurance Rabbit Hole, N. Y. Times, Apr. 5, 2012, p. A23
(telling of an uninsured 32-year-old woman who, healthy one day,
became a quadriplegic the next due to an auto accident).
To manage the risks associated with medical
care— its high cost, its unpredictability, and its
inevitability—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. See Congressional Budget Office, CBO’s 2011
Long-Term Budget Outlook 37 (June 2011).
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.
See Dept. of Commerce, Census Bureau, C. DeNavas-Walt, B. Proctor,
& J. Smith, Income, Poverty, and Health Insurance Coverage in
the United States: 2009, p. 23, Table 8 (Sept. 2010). As a
group, uninsured individuals annually consume more than $100
billion in health- care services, nearly 5% of the Nation’s
total. Hidden Health Tax: Americans Pay a Premium 2 (2009), avail-
able at http://www.familiesusa.org (all Internet mate- rial as
visited June 25, 2012, and included in Clerk of Court’s case
file). Over 60% of those without insurance visit a doctor’s
office or emergency room in a given year. See Dept. of Health and
Human Services, National Cen- ter for Health Statistics,
Health—United States—2010, p. 282, Table 79 (Feb.
2011).
B
The large number of individuals without health
insurance, Congress found, heavily burdens the national health-care
market. See 42 U. S. C. §18091(2). As just noted,
the cost of emergency care or treatment for a serious illness
generally exceeds what an individual can afford to pay on her own.
Unlike markets for most products, however, the inability to pay for
care does not mean that an uninsured individual will receive no
care. Federal and state law, as well as professional obligations
and embedded social norms, require hospitals and physicians to
provide care when it is most needed, regardless of the
patient’s ability to pay. See,
e.g., 42
U. S. C. §1395dd; Fla. Stat. §395.1041(3)(f)
(2010); Tex. Health & Safety Code Ann. §§311.022(a)
and (b) (West 2010); American Medical Association, Council on
Ethical and Judicial Affairs, Code of Medical Ethics, Current
Opinions: Opinion 8.11—Neglect of Patient, p. 70
(1998–1999 ed.).
As a consequence, medical-care providers deliver
sig- nificant amounts of care to the uninsured for which the
providers receive no payment. In 2008, for example, hospi- tals,
physicians, and other health-care professionals received no
compensation for $43 billion worth of the $116 billion in care they
administered to those without insurance. 42 U. S. C.
§18091(2)(F) (2006 ed., Supp. IV).
Health-care providers do not absorb these bad
debts. Instead, they raise their prices, passing along the cost of
uncompensated care to those who do pay reliably: the government and
private insurance companies. In response, private insurers increase
their premiums, shifting the cost of the elevated bills from
providers onto those who carry insurance. The net result: Those
with health insurance subsidize the medical care of those without
it. As economists would describe what happens, the uninsured
“free ride” on those who pay for health insurance.
The size of this subsidy is considerable.
Congress found that the cost-shifting just described
“increases family [insurance] premiums by on average over
$1,000 a year.”
Ibid. Higher premiums, in turn, render
health insurance less affordable, forcing more people to go without
insurance and leading to further cost-shifting.
And it is hardly just the currently sick or
injured among the uninsured who prompt elevation of the price of
health care and health insurance. Insurance companies and
health-care providers know that some percentage of healthy,
uninsured people will suffer sickness or injury each year and will
receive medical care despite their inability to pay. In
anticipation of this uncompensated care, health-care companies
raise their prices, and insurers their premiums. In other words,
because any uninsured person may need medical care at any moment
and because health-care companies must account for that risk, every
uninsured person impacts the market price of medical care and
medical insurance.
The failure of individuals to acquire insurance
has other deleterious effects on the health-care market. Because
those without insurance generally lack access to preventative care,
they do not receive treatment for conditions—like
hypertension and diabetes—that can be successfully and
affordably treated if diagnosed early on. See Institute of
Medicine, National Academies, Insuring America’s Health:
Principles and Recommendations 43 (2004). When sickness finally
drives the uninsured to seek care, once treatable conditions have
escalated into grave health problems, requiring more costly and
extensive intervention.
Id., at 43–44. The extra time
and resources providers spend serving the uninsured lessens the
providers’ ability to care for those who do have insurance.
See Kliff, High Uninsured Rates Can Kill You—Even if You Have
Coverage, Washington Post (May 7, 2012) (describing a study of
California’s health-care market which found that, when
hospitals divert time and resources to provide uncompensated care,
the quality of care the hospitals deliver to those with insurance
drops significantly), availa- ble at
http://www.washingtonpost.com/blogs/ezra-klein/post/
high-uninsured-rates-can-kill-you-even-if-you-have-coverage/2012/
05/07/gIQALNHN8T_print.html.
C
States cannot resolve the problem of the
uninsured on their own. 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.”
Helvering v.
Davis,
301
U.S. 619, 644 (1937). See also Brief for Commonwealth of
Massachusetts as
Amicus Curiae in No. 11–398,
p. 15 (noting that, in 2009, Massachusetts’ emergency
rooms served thousands of uninsured, out-of-state residents). 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.
States that undertake health-care reforms on
their own thus risk “placing themselves in a position of
economic disadvantage as compared with neighbors or
competitors.”
Davis, 301 U. S., at 644. See also
Brief for Health Care for All, Inc., et al. as
Amici
Curiae in No. 11–398, p. 4 (“[O]ut-of-state
residents continue to seek and receive millions of dollars in
uncompensated care in Massachusetts hospitals, limiting the
State’s efforts to improve its health care system through the
elimination of uncompensated care.”). 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 interests. Congress’ intervention
was needed to overcome this collective- action impasse.
D
Aware that a national solution was required,
Congress could have taken over the health-insurance market by
establishing a tax-and-spend federal program like Social Security.
Such a program, commonly referred to as a single-payer system
(where the sole payer is the Federal Government), would have left
little, if any, room for private enterprise or the States. Instead
of going this route, Congress enacted the ACA, a solution that
retains a robust role for private insurers and state governments.
To make its chosen approach work, however, Congress had to use some
new tools, including a requirement that most individuals obtain
private health insurance coverage. See 26 U. S. C.
§5000A (2006 ed., Supp. IV) (the minimum coverage provision).
As explained below, by employing these tools, Congress was able to
achieve a practical, alto- gether reasonable, solution.
A central aim of the ACA is to reduce the number
of uninsured U. S. residents. See 42 U. S. C.
§18091(2)(C) and (I) (2006 ed., Supp. IV). The minimum
coverage provision advances this objective by giving potential
recipients of health care a financial incentive to acquire
insurance. Per the minimum coverage provision, an individual must
either obtain insurance or pay a toll constructed as a tax penalty.
See 26 U. S. C. §5000A.
The minimum coverage provision serves a further
purpose vital to Congress’ plan to reduce the number of
uninsured. Congress knew that encouraging individuals to purchase
insurance would not suffice to solve the problem, because most of
the uninsured are not uninsured by choice.[
1] Of particular concern to Congress were people who,
though desperately in need of insurance, often cannot acquire it:
persons who suffer from preexisting medical conditions.
Before the ACA’s enactment, private
insurance companies took an applicant’s medical history into
account when setting insurance rates or deciding whether to insure
an individual. Because individuals with preexisting med- ical
conditions cost insurance companies significantly more than those
without such conditions, insurers routinely re- fused to insure
these individuals, charged them substantially higher premiums, or
offered only limited coverage that did not include the preexisting
illness. See Dept. of Health and Human Services, Coverage Denied:
How the Current Health Insurance System Leaves Millions Behind 1
(2009) (Over the past three years, 12.6 million non- elderly adults
were denied insurance coverage or charged higher premiums due to a
preexisting condition.).
To ensure that individuals with medical
histories have access to affordable insurance, Congress devised a
three-part solution. First, Congress imposed a “guaranteed
is- sue” requirement, which bars insurers from denying
coverage to any person on account of that person’s medical
condition or history. See 42 U. S. C.
§§300gg–1, 300gg–3, 300gg–4(a) (2006
ed., Supp. IV). Second, Congress required insurers to use
“community rating” to price their insurance policies.
See §300gg. Community rating, in effect, bars insurance
companies from charging higher premiums to those with preexisting
conditions.
But these two provisions, Congress comprehended,
could not work effectively unless individuals were given a powerful
incentive to obtain insurance. See Hearings before the House Ways
and Means Committee, 111th Cong., 1st Sess., 10, 13 (2009)
(statement of Uwe Reinhardt) (“[I]m- position of
community-rated premiums and
guaranteed issue on a
market of competing private health insurers will inexorably drive
that market into extinction, unless these two features are coupled
with . . .
a mandate on individual[s] to be
insured.” (emphasis in original)).
In the 1990’s, several
States—including New York, New Jersey, Washington, Kentucky,
Maine, New Hampshire, and Vermont—enacted guaranteed-issue
and community-rating laws without requiring universal acquisition
of insurance coverage. The results were disastrous. “All
seven states suffered from skyrocketing insurance pre- mium costs,
reductions in individuals with coverage, and reductions in
insurance products and providers.” Brief for American
Association of People with Disabilities et al. as
Amici
Curiae in No. 11–398, p. 9 (hereinafter AAPD Brief).
See also Brief for Governor of Washington Christine Gregoire as
Amicus Curiae in No. 11–398, pp. 11–14
(describing the “death spiral” in the insurance market
Washington experienced when the State passed a law requiring
coverage for preexisting conditions).
Congress comprehended that guaranteed-issue and
community-rating laws alone will not work. When insurance companies
are required to insure the sick at affordable prices, individuals
can wait until they become ill to buy insurance. Pretty soon, those
in need of immediate medical care—
i.e., those who cost
insurers the most—become the insurance companies’ main
customers. This “adverse selection” problem leaves
insurers with two choices: They can either raise premiums
dramatically to cover their ever-increasing costs or they can exit
the market. In the seven States that tried guaranteed-issue and
community-rating requirements without a minimum coverage provision,
that is precisely what insurance companies did. See,
e.g.,
AAPD Brief 10 (“[In Maine,] [m]any insurance providers
doubled their premiums in just three years or less.”);
id., at 12 (“Like New York, Vermont saw substantial
increases in premiums after its . . . insurance reform
measures took effect in 1993.”); Hall, An Evaluation of New
York’s Reform Law, 25 J. Health Pol. Pol’y & L. 71,
91–92 (2000) (Guaranteed-issue and community-rating laws
resulted in a “dramatic exodus of indemnity insurers from New
York’s individual [insurance] market.”); Brief for
Barry Friedman et al. as
Amici Curiae in No.
11–398, p. 17 (“In Kentucky, all but two insurers
(one State-run) abandoned the State.”).
Massachusetts, Congress was told, cracked the
adverse selection problem. By requiring most residents to obtain
insurance, see Mass. Gen. Laws, ch. 111M, §2 (West 2011), the
Commonwealth ensured that insurers would not be left with only the
sick as customers. As a result, federal lawmakers observed,
Massachusetts succeeded where other States had failed. See Brief
for Commonwealth of Massachusetts as
Amicus Curiae in No.
11–398, p. 3 (noting that the Commonwealth’s
reforms reduced the number of uninsured residents to less than 2%,
the lowest rate in the Nation, and cut the amount of uncompensated
care by a third); 42 U. S. C. §18091(2)(D) (2006
ed., Supp. IV) (noting the success of Massachusetts’
reforms).[
2] In coupling the
minimum coverage provision with guaranteed-issue and
community-rating prescriptions, Congress followed
Massachusetts’ lead.
* * *
In sum, Congress passed the minimum coverage
provision as a key component of the ACA to address an economic and
social problem that has plagued the Nation for decades: the large
number of U. S. residents who are unable or unwilling to
obtain health insurance. Whatever one thinks of the policy decision
Congress made, it was Congress’ 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.
II
A
The Commerce Clause, it is widely
acknowledged, “was the Framers’ response to the central
problem that gave rise to the Constitution itself.”
EEOC v.
Wyoming,
460 U.S.
226, 244, 245, n. 1 (1983) (Stevens, J., concurring)
(citing sources). Under the Articles of Confederation, the
Constitution’s precursor, the regulation of commerce was left
to the States. This scheme proved unworkable, because the
individual States, understandably focused on their own economic
interests, often failed to take actions critical to the success of
the Nation as a whole. See Vices of the Political System of the
United States, in James Madison: Writings 69, 71, ¶5 (J.
Rakove ed. 1999) (As a result of the “want of concert in
matters where common interest requires it,” the
“national dignity, interest, and reve- nue [have]
suffered.”).[
3]
What was needed was a “national Government
. . . armed with a positive & compleat authority in
all cases where uniform measures are necessary.” See Letter
from James Madison to Edmund Randolph (Apr. 8, 1787), in 9 Papers
of James Madison 368, 370 (R. Rutland ed. 1975). See also Letter
from George Washington to James Madison (Nov. 30, 1785), in 8
id., at 428, 429 (“We are either a United people, or
we are not. If the former, let us, in all matters of general
concern act as a nation, which ha[s] national objects to promote,
and a national character to support.”). The Framers’
solution was the Commerce Clause, which, as they perceived it,
granted Congress the authority to enact economic legislation
“in all Cases for the general Interests of the Union, and
also in those Cases to which the States are separately
incompetent.” 2 Records of the Federal Convention of 1787,
pp. 131–132, ¶8 (M. Farrand rev. 1966). See also
North American Co. v.
SEC,
327
U.S. 686, 705 (1946) (“[The commerce power] is an
affirmative power commensurate with the national
needs.”).
The Framers understood that the “general
Interests of the Union” would change over time, in ways they
could not anticipate. Accordingly, they recognized that the
Constitution was of necessity a “great outlin[e],” not
a detailed blueprint, see
McCulloch v.
Maryland, 4
Wheat. 316, 407 (1819), and that its provisions included broad
concepts, to be “explained by the context or by the facts of
the case,” Letter from James Madison to N. P. Trist (Dec.
1831), in 9 Writings of James Madison 471, 475 (G. Hunt ed. 1910).
“Nothing . . . can be more fallacious,”
Alexander Hamilton emphasized, “than to infer the extent of
any power, proper to be lodged in the national government, from
. . . its immediate necessities. There ought to be a
capacity to provide for future contingencies[,] as they may happen;
and as these are illimitable in their nature, it is impossible
safely to limit that capacity.” The Federalist No. 34,
pp. 205, 206 (John Harvard Library ed. 2009). See also
McCulloch, 4 Wheat., at 415 (The Necessary and Proper Clause
is lodged “in a constitution[,] intended to endure for ages
to come, and consequently, to be adapted to the various
crises of human affairs.”).
B
Consistent with the Framers’ intent, we
have repeatedly emphasized that Congress’ authority under the
Commerce Clause is dependent upon “practical”
considerations, including “actual experience.”
Jones
& Laughlin Steel Corp., 301 U. S., at 41–42; see
Wickard v.
Filburn,
317 U.S.
111, 122 (1942);
United States v.
Lopez,
514 U.S.
549, 573 (1995) (Kennedy, J., concurring) (emphasizing
“the Court’s definitive commitment to the practical
conception of the commerce power”). See also
North
American Co., 327 U. S., at 705 (“Commerce itself is
an intensely practical matter. To deal with it effectively,
Congress must be able to act in terms of economic and financial
realities.” (citation omitted)). We afford Congress the
leeway “to undertake to solve national problems directly and
realistically.”
American Power & Light Co. v.
SEC,
329 U.S.
90, 103 (1946).
Until today, this Court’s pragmatic
approach to judging whether Congress validly exercised its commerce
power was guided by two familiar principles. First, Congress has
the power to regulate economic activities “that substantially
affect interstate commerce.”
Gonzales v.
Raich,
545 U.S.
1, 17 (2005). This capacious power extends even to local
activities that, viewed in the aggregate, have a substantial impact
on interstate commerce. See
ibid. See also
Wickard,
317 U. S., at 125 (“[E]ven if appellee’s activ-
ity be local and though it may not be regarded as commerce, it may
still,
whatever its nature, be reached by Congress if it
exerts a substantial economic effect on interstate commerce.”
(emphasis added));
Jones & Laughlin Steel Corp., 301
U. S., at 37.
Second, we owe a large measure of respect to
Congress when it frames and enacts economic and social legislation.
See
Raich, 545 U. S., at 17. See also
Pension
Benefit Guaranty Corporation v.
R. A. Gray &
Co.,
467 U.S.
717, 729 (1984) (“[S]trong deference [is] accorded
legislation in the field of national economic policy.”);
Hodel v.
Indiana,
452 U.S.
314, 326 (1981) (“This [C]ourt will certainly not
substitute its judgment for that of Congress unless the relation of
the subject to interstate commerce and its ef- fect upon it are
clearly non-existent.” (internal quotation marks omitted)).
When appraising such legislation, we ask only (1) whether Congress
had a “rational basis” for concluding that the
regulated activity substantially affects interstate commerce, and
(2) whether there is a “reasonable connection between the
regulatory means selected and the asserted ends.”
Id.,
at 323–324. See also
Raich, 545 U. S., at 22;
Lopez, 514 U. S., at 557;
Hodel v.
Virginia
Surface Mining & Reclamation Assn., Inc.,
452 U.S.
264, 277 (1981);
Katzenbach v.
McClung,
379 U.S.
294, 303 (1964);
Heart of Atlanta Motel, Inc. v.
United States,
379 U.S.
241, 258 (1964);
United States v.
Carolene Products
Co.,
304 U.S.
144, 152–153 (1938). In answering these questions, we
presume the statute under review is constitutional and may strike
it down only on a “plain showing” that Congress acted
irrationally.
United States v.
Morrison,
529 U.S.
598, 607 (2000).
C
Straightforward application of these
principles would require the Court to hold that the minimum
coverage provision is proper Commerce Clause legislation. 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. See
supra, at 5. Those
goods are produced, sold, and delivered largely by national and
regional companies who routinely transact business across state
lines. The uninsured also cross state lines to receive care. Some
have medical emergencies while away from home. Others, when sick,
go to a neighboring State that provides better care for those who
have not prepaid for care. See
supra, at 7–8.
Not only do those without insurance consume a
large amount of health care each year; critically, as earlier
explained, their inability to pay for a significant portion of that
consumption drives up market prices, foists costs on other
consumers, and reduces market efficiency and stability. See
supra, at 5–7. Given these far-reaching effects on
interstate commerce, the decision to forgo insurance is hardly
inconsequential or equivalent to “doing nothing,”
ante, at 20; it is, instead, an economic decision Congress
has the authority to address under the Commerce Clause. See
supra, at 14–16. See also
Wickard, 317
U. S., at 128 (“It is well established by decisions of
this Court that the power to regulate commerce includes the power
to regulate the prices at which commodities in that commerce are
dealt in and
practices affecting such prices.”
(emphasis added)).
The minimum coverage provision, furthermore,
bears a “reasonable connection” to Congress’ goal
of protecting the health-care market from the disruption caused by
individuals who fail to obtain insurance. By requiring those who do
not carry insurance to pay a toll, the minimum coverage provision
gives individuals a strong incentive to insure. This incentive,
Congress had good reason to believe, would reduce the number of
uninsured and, correspondingly, mitigate the adverse impact the
uninsured have on the national health-care market.
Congress also acted reasonably in requiring
uninsured individuals, whether sick or healthy, either to obtain
insurance or to pay the specified penalty. As earlier observed,
because every person is at risk of needing care at any moment, all
those who lack insurance, regardless of their current health
status, adversely affect the price of health care and health
insurance. See
supra, at 6–7. Moreover, an
insurance-purchase requirement limited to those in need of
immediate care simply could not work. Insurance companies would
either charge these individuals prohibitively expensive premiums,
or, if community-rating regulations were in place, close up shop.
See
supra, at 9–11. See also Brief for State of
Maryland and 10 Other States et al. as
Amici Curiae in
No. 11–398, p. 28 (hereinafter Maryland Brief)
(“No insurance regime can survive if people can opt out when
the risk insured against is only a risk, but opt in when the risk
materializes.”).
“[W]here we find that the legislators
. . . have a rational basis for finding a chosen
regulatory scheme necessary to the protection of commerce, our
investigation is at an end.”
Katzenbach, 379
U. S., at 303–304. Congress’ enactment of the
minimum coverage provision, which addresses a specific interstate
problem in a practical, experience-informed manner, easily meets
this criterion.
D
Rather than evaluating the constitutionality
of the minimum coverage provision in the manner established by our
precedents, The Chief Justice relies on a newly minted
constitutional doctrine. The commerce power does not, The Chief
Justice announces, permit Congress to “compe[l] individuals
to become active in commerce by purchasing a product.”
Ante, at 20 (emphasis deleted).
1
a
The Chief Justice’s novel constraint on
Congress’ commerce power gains no force from our precedent
and for that reason alone warrants disapprobation. See
infra, at 23–27. But even assuming, for the moment,
that Congress lacks authority under the Commerce Clause to
“compel individuals not engaged in commerce to purchase an
unwanted product,”
ante, at 18, such a limitation
would be inapplicable here. Everyone will, at some point, consume
health-care products and services. See
supra, at 3. Thus, if
The Chief Justice is correct that an insurance-purchase requirement
can be applied only to those who “actively” consume
health care, the minimum coverage provision fits the bill.
The Chief Justice does not dispute that all
U. S. residents participate in the market for health services
over the course of their lives. See
ante, at 16
(“Everyone will eventually need health care at a time and to
an extent they cannot predict.”). But, The Chief Justice
insists, the uninsured cannot be considered active in the market
for health care, because “[t]he proximity and degree of
connection between the [uninsured today] and [their] subsequent
commercial activity is too lacking.”
Ante, at 27.
This argument has multiple flaws. First, more
than 60% of those without insurance visit a hospital or
doctor’s office each year. See
supra, at 5. Nearly 90%
will within five years.[
4] An
uninsured’s consumption of health care is thus quite
proximate: It is virtually certain to occur in the next five years
and more likely than not to occur this year.
Equally evident, Congress has no way of
separating those uninsured individuals who will need emergency
medi- cal care today (surely their consumption of medical care is
sufficiently imminent) from those who will not need medical
services for years to come. No one knows when an emergency will
occur, yet emergencies involving the uninsured arise daily. To
capture individuals who unexpect- edly will obtain medical care in
the very near future, then, Congress needed to include individuals
who will not go to a doctor anytime soon. Congress, our decisions
instruct, has authority to cast its net that wide. See
Perez
v.
United States,
402 U.S.
146, 154 (1971) (“[W]hen it is necessary in order to
prevent an evil to make the law embrace more than the precise thing
to be prevented it may do so.” (internal quotation marks
omitted)).[
5]
Second, it is Congress’ role, not the
Court’s, to delineate the boundaries of the market the
Legislature seeks to regulate. The Chief Justice defines the
health-care mar- ket as including only those transactions that will
occur either in the next instant or within some (unspecified)
proximity to the next instant. But Congress could reasonably have
viewed the market from a long-term perspective, encompassing all
transactions virtually certain to occur over the next decade, see
supra, at 19, not just those occurring here and now.
Third, contrary to The Chief Justice’s
contention, our precedent does indeed support “[t]he
proposition that Congress may dictate the conduct of an individual
today because of prophesied future activity.”
Ante, at
26. In
Wickard, the Court upheld a penalty the Federal
Government imposed on a farmer who grew more wheat than he was
permitted to grow under the Agricultural Adjustment Act of 1938
(AAA). 317 U. S., at 114–115. He could not be penalized,
the farmer argued, as he was growing the wheat for home
consumption, not for sale on the open market.
Id., at 119.
The Court rejected this argument.
Id., at 127–129.
Wheat intended for home consumption, the Court noted,
“overhangs the market, and if induced by rising prices, tends
to flow into the market and check price increases [intended by the
AAA].”
Id., at 128.
Similar reasoning supported the Court’s
judgment in
Raich, which upheld Congress’ authority to
regulate marijuana grown for personal use. 545 U. S., at 19.
Homegrown marijuana substantially affects the interstate mar- ket
for marijuana, we observed, for “the high demand in the
interstate market will [likely] draw such marijuana into that
market.”
Ibid.
Our decisions thus acknowledge Congress’
authority, under the Commerce Clause, to direct the conduct of an
individual today (the farmer in
Wickard, stopped from
growing excess wheat; the plaintiff in
Raich, ordered to
cease cultivating marijuana) because of a prophesied future
transaction (the eventual sale of that wheat or marijuana in the
interstate market). Congress’ actions are even more rational
in this case, where the future activity (the consumption of medical
care) is certain to occur, the sole uncertainty being the time the
activity will take place.
Maintaining that the uninsured are not active in
the health-care market, The Chief Justice draws an analogy to the
car market. An individual “is not ‘active in the car
market,’ ” The Chief Justice observes, simply
because he or she may someday buy a car.
Ante, at 25. The
analogy is inapt. The inevitable yet unpredictable need for medical
care and the guarantee that emergency care will be provided when
required are conditions nonexistent in other markets. That is so of
the market for cars, and of the market for broccoli as well.
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. See
Thomas
More Law Center v.
Obama, 651 F.3d 529, 565 (CA6 2011)
(Sutton, J., concurring in part) (“Regulating how citizens
pay for what they already receive (health care), never quite know
when they will need, and in the case of severe illnesses or
emergencies generally will not be able to afford, has few (if any)
parallels in modern life.”). Upholding the minimum coverage
provision on the ground that all are participants or will be
participants in the health-care market would therefore carry no
implication that Congress may justify under the Commerce Clause a
mandate to buy other products and services.
Nor is it accurate to say that the minimum
coverage provision “compel[s] individuals . . . to
purchase an unwanted product,”
ante, at 18, or
“suite of products,”
post, at 11, n. 2
(joint opinion of Scalia, Kennedy, Thomas, and Alito, JJ.). If
unwanted today, medical service secured by insurance may be
desperately needed tomorrow. Virtually everyone, I reiterate,
consumes health care at some point in his or her life. See
supra, at 3. Health insurance is a means of paying for this
care, nothing more. In requiring individuals to obtain insurance,
Congress is therefore not mandating the purchase of a discrete,
unwanted product. Rather, Congress is merely defining the terms on
which individuals pay for an interstate good they consume: Persons
subject to the mandate must now pay for medical care in advance
(instead of at the point of service) and through insurance (instead
of out of pocket). Establishing payment terms for goods in or
affecting interstate commerce is quintessential economic regulation
well within Congress’ domain. See,
e.g., United
States v.
Wrightwood Dairy Co.,
315
U.S. 110, 118 (1942). Cf.
post, at 13 (joint opinion of
Scalia, Kennedy, Thomas, and Alito, JJ.) (recognizing that
“the Federal Government can prescribe [a commodity’s]
quality . . . and even [its price]”).
The Chief Justice also calls the minimum
coverage provision an illegitimate effort to make young, healthy
individuals subsidize insurance premiums paid by the less hale and
hardy. See
ante, at 17, 25–26. This complaint, too, is
spurious. Under the current health-care system, healthy persons who
lack insurance receive a benefit for which they do not pay: They
are assured that, if they need it, emergency medical care will be
available, although they cannot afford it. See
supra, at
5–6. Those who have insurance bear the cost of this
guarantee. See
ibid. By requiring the healthy uninsured to
obtain insurance or pay a penalty structured as a tax, the minimum
coverage provision ends the free ride these individuals currently
enjoy.
In the fullness of time, moreover, today’s
young and healthy will become society’s old and infirm.
Viewed over a lifespan, the costs and benefits even out: The young
who pay more than their fair share currently will pay less than
their fair share when they become senior citizens. And even if, as
undoubtedly will be the case, some individuals, over their
lifespans, will pay more for health insurance than they receive in
health services, they have little to complain about, for that is
how insurance works. Every insured person receives protection
against a catastrophic loss, even though only a subset of the
covered class will ultimately need that protection.
b
In any event, The Chief Justice’s
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. Article I, §8, of the
Constitution grants Congress the power “[t]o regulate
Commerce . . . among the several States.” Nothing
in this language im- plies that Congress’ commerce power is
limited to regu- lating those actively engaged in commercial
transactions. Indeed, as the D. C. Circuit observed,
“[a]t the time the Constitution was [framed], to
‘regulate’ meant,” among other things, “to
require action.” See
Seven-Sky v.
Holder, 661
F.3d 1, 16 (2011).
Arguing to the contrary, The Chief Justice notes
that “the Constitution gives Congress the power to
‘coin Money,’ in addition to the power to
‘regulate the Value thereof,’ ” and
similarly “gives Congress the power to ‘raise and
support Armies’ and to ‘provide and maintain a
Navy,’ in addition to the power to ‘make Rules for the
Government and Regulation of the land and naval
Forces.’ ”
Ante, at 18–19 (citing
Art. I, §8, cls. 5, 12–14). In separating the power
to regulate from the power to bring the subject of the regulation
into existence, The Chief Justice asserts, “[t]he language of
the Constitution reflects the natural understanding that the power
to regulate assumes there is already something to be
regulated.”
Ante, at 19.
This argument is difficult to fathom. Requiring
individuals to obtain insurance unquestionably regulates the inter-
state health-insurance and health-care markets, both of them in
existence well before the enactment of the ACA. See
Wickard,
317 U. S., at 128 (“The stimulation of commerce is a use
of the regulatory function quite as definitely as prohibitions or
restrictions thereon.”). Thus, the “something to be
regulated” was surely there when Congress created the minimum
coverage provision.[
6]
Nor does our case law toe the activity versus
inactiv- ity line. In
Wickard, for example, we upheld the
penalty imposed on a farmer who grew too much wheat, even though
the regulation had the effect of compelling farmers to purchase
wheat in the open market.
Id., at 127–129.
“[F]orcing some farmers into the market to buy what they
could provide for themselves” was, the Court held, a valid
means of regulating commerce.
Id., at 128–129. In an-
other context, this Court similarly upheld Congress’
authority under the commerce power to compel an
“inactive” land- holder to submit to an unwanted sale.
See
Monongahela Nav. Co. v.
United States,
148 U.S.
312, 335–337 (1893) (“[U]pon
the [great] power
to regulate commerce[,]” Congress has the authority to
mandate the sale of real prop- erty to the Government, where the
sale is essential to the improvement of a navigable waterway
(emphasis added));
Cherokee Nation v.
Southern Kansas R.
Co.,
135 U.S.
641, 657–659 (1890) (similar reliance on the commerce
power regarding mandated sale of private property for railroad
construction).
In concluding that the Commerce Clause does not
permit Congress to regulate commercial “inactivity,”
and there- fore does not allow Congress to adopt the practical
solution it devised for the health-care problem, The Chief Justice
views the Clause as a “technical legal conception,”
precisely what our case law tells us not to do.
Wickard, 317
U. S., at 122 (internal quotation marks omitted). See also
supra, at 14–16. This Court’s former endeavors
to impose categorical limits on the commerce power have not fared
well. In several pre-New Deal cases, the Court attempted to cabin
Congress’ Commerce Clause authority by distinguishing
“commerce” from activity once conceived to be
noncommercial, notably, “production,”
“mining,” and “manufacturing.” See,
e.g., United States v.
E. C. Knight Co.,
156 U.S.
1, 12 (1895) (“Commerce succeeds to manufacture, and is
not a part of it.”);
Carter v.
Carter Coal Co.,
298 U.S.
238, 304 (1936) (“Mining brings the subject matter of
commerce into existence. Commerce disposes of it.”). The
Court also sought to distinguish activities having a
“direct” effect on interstate commerce, and for that
reason, subject to federal regulation, from those having only an
“indirect” effect, and therefore not amenable to
federal control. See,
e.g., A. L. A. Schechter Poultry Corp.
v.
United States,
295 U.S.
495, 548 (1935) (“[T]he dis- tinction between direct and
indirect effects of intrastate transactions upon interstate
commerce must be recognized as a fundamental one.”).
These line-drawing exercises were untenable, and
the Court long ago abandoned them. “[Q]uestions of the power
of Congress [under the Commerce Clause],” we held in
Wickard, “are not to be decided by reference to any
for- mula which would give controlling force to nomenclature such
as ‘production’ and ‘indirect’ and
foreclose consideration of the actual effects of the activity in
question upon interstate commerce.” 317 U. S., at 120.
See also
Morrison, 529 U. S., at 641–644 (Souter,
J., dissenting) (recounting the Court’s “nearly
disastrous experiment” with formalistic limits on
Congress’ commerce power). Failing to learn from this
history, The Chief Justice plows ahead with his formalistic
distinction between those who are “active in commerce,”
ante, at 20, and those who are not.
It is not hard to show the difficulty courts
(and Congress) would encounter in distinguishing statutes that reg-
ulate “activity” from those that regulate
“inactivity.” As Judge Easterbrook noted, “it is
possible to restate most actions as corresponding inactions with
the same effect.”
Archie v.
Racine, 847 F.2d
1211, 1213 (CA7 1988) (en banc). Take this case as an example. An
individual who opts not to purchase insurance from a private
insurer can be seen as actively selecting another form of
insurance: self-insurance. See
Thomas More Law Center, 651
F. 3d, at 561 (Sutton, J., concurring in part) (“No one
is in- active when deciding how to pay for health care, as
self-insurance and private insurance are two forms of action for
addressing the same risk.”). The minimum coverage provision
could therefore be described as regulating activists in the
self-insurance market.[
7]
Wickard is another example. Did the statute there at issue
target activity (the growing of too much wheat) or inactivity (the
farmer’s failure to purchase wheat in the marketplace)? If
anything, the Court’s analysis suggested the latter. See 317
U. S., at 127–129.
At bottom, The Chief Justice’s and the
joint dissenters’ “view that an individual cannot be
subject to Commerce Clause regulation absent voluntary, affirmative
acts that enter him or her into, or affect, the interstate mar- ket
expresses a concern for individual liberty that [is] more redolent
of Due Process Clause arguments.”
Seven-Sky, 661
F. 3d, at 19. See also
Troxel v.
Granville,
530 U.S.
57, 65 (2000) (plurality opinion) (“The [Due Process]
Clause also includes a substantive component that provides
heightened protection against government interference with certain
fundamental rights and liberty interests.” (internal
quotation marks omitted)). Plaintiffs have abandoned any argument
pinned to substantive due process, however, see 648 F.3d 1235,
1291, n. 93 (CA11 2011), and now concede that the provisions here
at issue do not offend the Due Process Clause.[
8]
2
Underlying The Chief Justice’s view that
the Commerce Clause must be confined to the regulation of active
participants in a commercial market is a fear that the commerce
power would otherwise know no limits. See,
e.g., ante, at 23
(Allowing Congress to compel an individ- ual not engaged in
commerce to purchase a product would “permi[t] Congress to
reach beyond the natural extent of its authority, everywhere
extending the sphere of its activity, and drawing all power into
its impetuous vortex.” (internal quotation marks omitted)).
The joint dissenters express a similar apprehension. See
post, at 8 (If the minimum coverage provision is upheld
under the commerce power then “the Commerce Clause becomes a
font of unlimited power, . . . the hideous monster whose
devouring jaws . . . spare neither sex nor age, nor high
nor low, nor sacred nor profane.” (internal quotation marks
omitted)). This concern is unfounded.
First, The Chief Justice could certainly uphold
the individual mandate without giving Congress
carte blanche
to enact any and all purchase mandates. As several times noted, the
unique attributes of the health-care market render everyone active
in that market and give rise to a significant free-riding problem
that does not occur in other markets. See
supra, at
3–7, 16–18, 21.
Nor would the commerce power be unbridled,
absent The Chief Justice’s “activity” limitation.
Congress would remain unable to regulate noneconomic conduct that
has only an attenuated effect on interstate commerce and is
traditionally left to state law. See
Lopez, 514 U. S.,
at 567;
Morrison, 529 U. S., at 617–619. In
Lopez, for example, the Court held that the Federal
Government lacked power, under the Commerce Clause, to criminalize
the possession of a gun in a local school zone. Possessing a gun
near a school, the Court reasoned, “is in no sense an
economic activity that might, through repetition elsewhere,
substantially affect any sort of interstate commerce.” 514
U. S., at 567;
ibid. (noting that the Court would have
“to pile inference upon inference” to conclude that gun
possession has a substantial effect on commerce). Relying on
similar logic, the Court concluded in
Morrison that Congress
could not regulate gender-motivated violence, which the Court
deemed to have too “attenuated [an] effect upon interstate
commerce.” 529 U. S., at 615.
An individual’s decision to self-insure, I
have explained, is an economic act with the requisite connection to
interstate commerce. See
supra, at 16–17. Other
choices individuals make are unlikely to fit the same or similar
description. As an example of the type of regulation he fears, The
Chief Justice cites a Government mandate to purchase green
vegetables.
Ante, at 22–23. One could call this
concern “the broccoli horrible.” Congress, The Chief
Justice posits, might adopt such a mandate, reasoning that an
individual’s failure to eat a healthy diet, like the failure
to purchase health insurance, imposes costs on others. See
ibid.
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.[
9] Such “pil[ing of] inference upon
inference” is just what the Court refused to do in
Lopez and
Morrison.
Other provisions of the Constitution also check
congressional overreaching. A mandate to purchase a particu- lar
product would be unconstitutional if, for example, the edict
impermissibly abridged the freedom of speech, interfered with the
free exercise of religion, or infringed on a liberty interest
protected by the Due Process Clause.
Supplementing these legal restraints is a
formidable check on congressional power: the democratic process.
See
Raich, 545 U. S., at 33;
Wickard, 317
U. S., at 120 (repeating Chief Justice Marshall’s
“warning that effective restraints on [the commerce
power’s] exercise must proceed from political rather than
judicial processes” (citing
Gibbons v.
Ogden, 9
Wheat. 1, 197 (1824)). As the controversy surrounding the passage
of the Affordable Care Act attests, purchase mandates are likely to
engender political resistance. This prospect is borne out by the
behavior of state legislators. Despite their possession of
unquestioned authority to impose mandates, state governments have
rarely done so. See Hall, Commerce Clause Challenges to Health Care
Reform, 159 U. Pa. L. Rev. 1825, 1838 (2011).
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. Cf.
Raich, 545 U. S., at 9;
Wickard, 317 U. S., at 127–129. Yet no one would
offer the “hypothetical and unreal possibilit[y],”
Pullman Co. v.
Knott,
235 U.S.
23, 26 (1914), 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. Cf. R. Bork, The Tempting of
America 169 (1990) (“Judges and lawyers live on the slippery
slope of analogies; they are not supposed to ski it to the
bottom.”). But see,
e.g., post, at 3 (joint opinion of
Scalia, Kennedy, Thomas, and Alito, JJ.) (asserting, outlandishly,
that if the minimum coverage provision is sustained, then Congress
could make “breathing in and out the basis for federal
prescription”).
3
To bolster his argument that the minimum
coverage provision is not valid Commerce Clause legislation, The
Chief Justice emphasizes the provision’s novelty. See
ante, at 18 (asserting that “sometimes the most
telling indication of [a] severe constitutional problem
. . . is the lack of historical precedent for
Congress’s action” (internal quotation marks omitted)).
While an insurance-purchase mandate may be novel, The Chief
Justice’s argument certainly is not. “[I]n almost every
instance of the exer- cise of the [commerce] power differences are
asserted from previous exercises of it and made a ground of
attack.”
Hoke v.
United States,
227 U.S.
308, 320 (1913). See,
e.g., Brief for Petitioner in
Perez v.
United States, O. T. 1970, No. 600,
p. 5 (“unprecedented exercise of power”); Sup-
plemental Brief for Appellees in
Katzenbach v.
McClung, O. T. 1964, No. 543, p. 40 (“novel
assertion of federal power”); Brief for Appellee in
Wickard v.
Filburn, O. T. 1941, No. 59,
p. 6 (“complete departure”). For decades, the
Court has declined to override legislation because of its novelty,
and for good reason. As our national economy grows and changes, we
have recognized, Congress must adapt to the changing
“economic and financial realities.” See
supra,
at 14–15. Hindering Congress’ ability to do so is
shortsighted; if history is any guide, today’s constriction
of the Commerce Clause will not endure. See
supra, at
25–26.
III
A
For the reasons explained above, the minimum
coverage provision is valid Commerce Clause legislation. See
supra, Part II. When viewed as a component of the entire
ACA, the provision’s constitutionality becomes even
plainer.
The Necessary and Proper Clause “empowers
Congress to enact laws in effectuation of its [commerce] powe[r]
that are not within its authority to enact in isolation.”
Raich, 545 U. S., at 39 (Scalia, J., concurring in
judgment). Hence, “[a] complex regulatory program
. . . can survive a Commerce Clause challenge without a
showing that every single facet of the program is independently and
directly related to a valid congressional goal.”
Indiana, 452 U. S., at 329, n. 17. “It is
enough that the challenged provisions are an integral part of the
regulatory program and that the regulatory scheme when considered
as a whole satisfies this test.”
Ibid. (collecting
cases). See also
Raich, 545 U. S., at 24–25 (A
challenged statutory provision fits within Congress’ commerce
authority if it is an “essential par[t] of a larger
regulation of economic activity,” such that, in the absence
of the provision, “the regulatory scheme could be
undercut.” (quoting
Lopez, 514 U. S., at 561));
Raich, 545 U. S., at 37 (Scalia, J., concurring in
judgment) (“Congress may regulate even noneconomic local
activity if that regulation is a necessary part of a more general
regulation of interstate commerce. The relevant question is simply
whether the means chosen are ‘reasonably adapted’ to
the attainment of a legitimate end under the commerce power.”
(citation omitted)).
Recall that one of Congress’ goals in
enacting the Affordable Care Act was to eliminate the insurance
industry’s practice of charging higher prices or denying
coverage to individuals with preexisting medical conditions. See
supra, at 9–10. The commerce power allows Congress to
ban this practice, a point no one disputes. See
United
States v.
South-Eastern Underwriters Assn.,
322 U.S.
533, 545, 552–553 (1944) (Congress may regulate
“the methods by which interstate insurance companies do
business.”).
Congress knew, however, that simply barring
insurance companies from relying on an applicant’s medical
history would not work in practice. Without the individual mandate,
Congress learned, guaranteed-issue and community-rating
requirements would trigger an adverse-selection death-spiral in the
health-insurance market: Insurance premiums would skyrocket, the
number of uninsured would increase, and insurance companies would
exit the market. See
supra, at 10–11
. When
complemented by an insurance mandate, on the other hand, guaranteed
issue and community rating would work as intended, increasing
access to insurance and reducing uncompensated care. See
supra, at 11–12. The minimum coverage provision is
thus an “essential par[t] of a larger regulation of economic
activity”; without the provision, “the regulatory
scheme [w]ould be undercut.”
Raich, 545 U. S., at
24–25 (inter- nal quotation marks omitted). Put differently,
the minimum coverage provision, together with the guaranteed-issue
and community-rating requirements, is
“ ‘reasonably adapted’ to the attainment of
a legitimate end under the commerce power”: the elimination
of pricing and sales practices that take an applicant’s
medical history into account. See
id., at 37 (Scalia, J.,
concurring in judgment).
B
Asserting that the Necessary and Proper Clause
does not authorize the minimum coverage provision, The Chief
Justice focuses on the word “proper.” A mandate to
purchase health insurance is not “proper” legislation,
The Chief Justice urges, because the command “undermine[s]
the structure of government established by the Constitution.”
Ante, at 28. If long on rhetoric, The Chief Justice’s
argument is short on substance.
The Chief Justice cites only two cases in which
this Court concluded that a federal statute impermissibly
transgressed the Constitution’s boundary between state and
federal authority:
Printz v.
United States,
521 U.S.
898 (1997), and
New York v.
United States,
505 U.S.
144 (1992). See
ante, at 29. The statutes at issue in
both cases, however, compelled
state officials to act on the
Federal Government’s behalf. 521 U. S., at 925–933
(holding unconstitutional a statute obligating state law
enforcement officers to implement a federal gun-control law);
New York, 505 U. S., at 176–177 (striking down a
statute requiring state legislators to pass regulations pursuant to
Congress’ instructions). “[Federal] laws conscripting
state officers,” the Court reasoned, “violate state
sovereignty and are thus not in accord with the
Constitution.”
Printz, 521 U. S., at 925, 935;
New York, 505 U. S., at 176.
The minimum coverage provision, in contrast,
acts “directly upon individuals, without employing the States
as intermediaries.”
New York, 505 U. S., at 164.
The provision is thus entirely consistent with the Consti-
tution’s design. See
Printz, 521 U. S., at 920
(“[T]he Framers explicitly chose a Constitution that confers
upon Congress the power to regulate individuals, not States.”
(internal quotation marks omitted)).
Lacking case law support for his holding, The
Chief Justice nevertheless declares the minimum coverage provision
not “proper” because it is less “narrow in
scope” than other laws this Court has upheld under the
Necessary and Proper Clause.
Ante, at 29 (citing
United
States v.
Comstock, 560 U. S. ___ (2010);
Sabri v.
United States,
541 U.S.
600 (2004);
Jinks v.
Richland County,
538 U.S.
456 (2003)). The Chief Justice’s reliance on cases in
which this Court has
affirmed Congress’ “broad
authority to enact federal legislation” under the Necessary
and Proper Clause,
Comstock, 560 U. S., at ___ (slip
op., at 5), is underwhelming.
Nor does The Chief Justice pause to explain
why the power to direct either the purchase of health
insurance or, alternatively, the payment of a penalty collectible
as a tax is more far-reaching than other implied powers this Court
has found meet under the Necessary and Proper Clause. These powers
include the power to enact criminal laws, see,
e.g., United
States v.
Fox,
95 U.S.
670, 672 (1878); the power to imprison, including civil
imprisonment, see,
e.g., Comstock, 560 U. S., at ___
(slip op., at 1); and the power to create a national bank, see
McCulloch, 4 Wheat., at 425. See also
Jinks, 538
U. S., at 463 (affirming Congress’ power to alter the
way a state law is applied in state court, where the alteration
“promotes fair and efficient operation of the federal
courts”).[
10]
In failing to explain why the individual mandate
threatens our constitutional order, The Chief Justice disserves
future courts. How is a judge to decide, when ruling on the
constitutionality of a federal statute, whether Congress employed
an “independent power,”
ante, at 28, or merely a
“derivative” one,
ante, at 29. Whether the power
used is “substantive,”
ante, at 30, or just
“incidental,”
ante, at 29? The instruction The
Chief Justice, in effect, provides lower courts: You will know it
when you see it.
It is more than exaggeration to suggest that the
minimum coverage provision improperly intrudes on “essential
attributes of state sovereignty.”
Ibid. (internal
quotation marks omitted). First, the Affordable Care Act does not
operate “in [an] are[a] such as criminal law enforcement or
education where States historically have been sovereign.”
Lopez, 514 U. S., at 564. As evidenced by Medicare,
Medicaid, the Employee Retirement Income Security Act of 1974
(ERISA), and the Health Insurance Portability and Accountability
Act of 1996 (HIPAA), the Federal Government plays a lead role in
the health-care sector, both as a direct payer and as a
regulator.
Second, and perhaps most important, the minimum
coverage provision, along with other provisions of the ACA,
addresses the very sort of interstate problem that made the
commerce power essential in our federal system. See
supra,
at 12–14. The crisis created by the large number of
U. S. residents who lack health insurance is one of national
dimension that States are “separately incompetent” to
handle. See
supra, at 7–8, 13. See also Maryland Brief
15–26 (describing “the impediments to effective state
policymaking that flow from the interconnectedness of each
state’s healthcare economy” and emphasizing that
“state-level reforms cannot fully address the problems
associated with uncompensated care”). Far from trampling on
States’ sovereignty, the ACA attempts a federal solution for
the very reason that the States, acting separately, cannot meet the
need. Notably, the ACA serves the general welfare of the people of
the United States while retaining a prominent role for the States.
See
id., at 31–36 (explaining and illustrating how the
ACA affords States wide latitude in implementing key elements of
the Act’s reforms).[
11]
IV
In the early 20th century, this Court
regularly struck down economic regulation enacted by the
peoples’ representatives in both the States and the Federal
Government. See,
e.g., Carter Coal Co., 298 U. S., at
303–304, 309–310;
Dagenhart, 247 U. S., at
276–277;
Lochner v.
New York,
198 U.S.
45, 64 (1905). The Chief Justice’s Commerce Clause
opinion, and even more so the joint dissenters’ reasoning,
see
post, at 4–16, bear a disquieting resemblance to
those long-overruled decisions.
Ultimately, the Court upholds the individual
mandate as a proper exercise of Congress’ power to tax and
spend “for the . . . general Welfare of the United
States.” Art. I, §8, cl. 1;
ante, at
43–44. I concur in that determination, which makes The Chief
Justice’s Commerce Clause essay all the more puzzling. Why
should The Chief Justice strive so mightily to hem in
Congress’ capacity to meet the new problems arising
constantly in our ever-developing modern economy? I find no
satisfying response to that question in his opinion.[
12]
V
Through Medicaid, Congress has offered the
States an opportunity to furnish health care to the poor with the
aid of federal financing. To receive federal Medicaid funds, States
must provide health benefits to specified categories of needy
persons, including pregnant women, children, parents, and adults
with disabilities. Guaranteed eligibility varies by category: for
some it is tied to the federal poverty level (incomes up to 100% or
133%); for others it depends on criteria such as eligibility for
designated state or federal assistance programs. The ACA enlarges
the population of needy people States must cover to include adults
under age 65 with incomes up to 133% of the fed- eral poverty
level. The spending power conferred by the Constitution, the Court
has never doubted, permits Congress to define the contours of
programs financed with federal funds. See,
e.g., Pennhurst State
School and Hospital v.
Halderman,
451 U.S.
1, 17 (1981). And to expand coverage, Congress could have
recalled the existing legislation, and replaced it with a new law
making Medicaid as embracive of the poor as Congress chose.
The question posed by the 2010 Medicaid
expansion, then, is essentially this: To cover a notably larger
population, must Congress take the repeal/reenact route, or may it
achieve the same result by amending existing law? The answer should
be that Congress may expand by amendment the classes of needy
persons entitled to Medicaid benefits. A ritualistic requirement
that Congress repeal and reenact spending legislation in order to
enlarge the population served by a federally funded program would
advance no constitutional principle and would scarcely serve the
interests of federalism. To the contrary, such a requirement would
rigidify Congress’ efforts to empower States by partnering
with them in the implementation of federal programs.
Medicaid is a prototypical example of
federal-state cooperation in serving the Nation’s general
welfare. Rather than authorizing a federal agency to administer a
uni- form national health-care system for the poor, Con- gress
offered States the opportunity to tailor Medicaid grants to their
particular needs, so long as they remain within bounds set by
federal law. In shaping Medicaid, Congress did not endeavor to fix
permanently the terms participating states must meet; instead,
Congress reserved the “right to alter, amend, or
repeal” any provision of the Medicaid Act. 42
U. S. C. §1304. States, for their part, agreed to
amend their own Medicaid plans consistent with changes from time to
time made in the federal law. See 42 CFR §430.12(c)(i) (2011).
And from 1965 to the present, States have regularly conformed to
Congress’ alterations of the Medicaid Act.
The Chief Justice acknowledges that Congress may
“condition the receipt of [federal] funds on the
States’ complying with restrictions on the use of those
funds,”
ante, at 50, but nevertheless concludes that
the 2010 expansion is unduly coercive. His conclusion rests on
three premises, each of them essential to his theory. First, the
Medicaid expansion is, in The Chief Justice’s view, a new
grant program, not an addition to the Medicaid program existing
before the ACA’s enactment. Congress, The Chief Justice
maintains, has threatened States with the loss of funds from an old
program in an effort to get them to adopt a new one. Second, the
expansion was unforeseeable by the States when they first signed on
to Medicaid. Third, the threatened loss of funding is so large that
the States have no real choice but to participate in the Medicaid
expansion. The Chief Justice therefore—
for the first time
ever—finds an exercise of Congress’ spending power
unconstitutionally coercive.
Medicaid, as amended by the ACA, however, is not
two spending programs; it is a single program with a constant
aim—to enable poor persons to receive basic health care when
they need it. Given past expansions, plus express statutory warning
that Congress may change the requirements participating States must
meet, there can be no tenable claim that the ACA fails for lack of
notice. Moreover, States have no entitlement to receive any
Medicaid funds; they enjoy only the opportunity to accept funds on
Congress’ terms. 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.
A majority of the Court, however, buys the
argument that prospective withholding of funds formerly available
exceeds Congress’ spending power. Given that holding, I
entirely agree with The Chief Justice as to the appropriate remedy.
It is to bar the withholding found impermissible—not, as the
joint dissenters would have it, to scrap the expansion altogether,
see
post, at 46–48. The dissenters’ view that
the ACA must fall in its entirety is a radical departure from the
Court’s normal course. When a constitutional infirmity mars a
statute, the Court ordinarily removes the infirmity. It undertakes
a salvage operation; it does not demolish the legislation. See,
e.g., Brockett v.
Spokane Arcades, Inc.,
472 U.S.
491, 504 (1985) (Court’s normal course is to declare a
statute invalid “to the extent that it reaches too far, but
otherwise [to leave the statute] intact”). That course is
plainly in order where, as in this case, Congress has expressly
instructed courts to leave untouched every provision not found
invalid. See 42 U. S. C. §1303. Because The Chief
Justice finds the withholding—not the granting—of
federal funds incom- patible with the Spending Clause,
Congress’ extension of Medicaid remains available to any
State that affirms its willingness to participate.
A
Expansion has been characteristic of the
Medicaid program. Akin to the ACA in 2010, the Medicaid Act as
passed in 1965 augmented existing federal grant programs jointly
administered with the States.[
13] States were not required to participate in Medicaid.
But if they did, the Federal Government paid at least half the
costs. To qual- ify for these grants, States had to offer a minimum
level of health coverage to beneficiaries of four federally funded,
state-administered welfare programs: Aid to Families with Dependent
Children; Old Age Assistance; Aid to the Blind; and Aid to the
Permanently and Totally Disabled. See Social Security Amendments of
1965, §121(a), 79Stat. 343;
Schweiker v.
Gray
Panthers,
453 U.S.
34, 37 (1981). At their option, States could enroll additional
“medically needy” individuals; these costs, too, were
partially borne by the Federal Government at the same, at least
50%, rate.
Ibid.
Since 1965, Congress has amended the Medicaid
program on more than 50 occasions, sometimes quite sizably. Most
relevant here, between 1988 and 1990, Congress required
participating States to include among their beneficiaries pregnant
women with family incomes up to 133% of the federal poverty level,
children up to age 6 at the same income levels, and children ages 6
to 18 with family incomes up to 100% of the poverty level. See 42
U. S. C. §§1396a(a)(10)(A)(i), 1396a(
l);
Medicare Catastrophic Cov- erage Act of 1988, §302, 102Stat.
750; Omnibus Budget Reconciliation Act of 1989, §6401,
103Stat. 2258; Om- nibus Budget Reconciliation Act of 1990,
§4601, 104Stat. 1388–166. These amendments added
millions to the Medicaid-eligible population. Dubay & Kenney,
Lessons from the Medicaid Expansions for Children and Pregnant
Women 5 (Apr. 1997).
Between 1966 and 1990, annual federal Medicaid
spending grew from $631.6 million to $42.6 billion; state spending
rose to $31 billion over the same period. See Dept. of Health and
Human Services, National Health Expenditures by Type of Service and
Source of Funds: Calendar Years 1960 to 2010 (table).[
14] And between 1990 and 2010,
federal spending increased to $269.5 billion.
Ibid.
Enlargement of the population and services covered by Medicaid, in
short, has been the trend.
Compared to past alterations, the ACA is notable
for the extent to which the Federal Government will pick up the
tab. Medicaid’s 2010 expansion is financed largely by federal
outlays. In 2014, federal funds will cover 100% of the costs for
newly eligible beneficiaries; that rate will gradually decrease
before settling at 90% in 2020. 42 U. S. C.
§1396d(y) (2006 ed., Supp. IV). By comparison, federal
contributions toward the care of beneficiaries eligible pre-ACA
range from 50% to 83%, and averaged 57% between 2005 and 2008.
§1396d(b) (2006 ed., Supp. IV); Dept. of Health and Human
Services, Centers for Medicare and Medicaid Services, C. Truffer
et al., 2010 Actuarial Report on the Financial Outlook for
Medicaid, p. 20.
Nor will the expansion exorbitantly increase
state Medicaid spending. The Congressional Budget Office (CBO)
projects that States will spend 0.8% more than they would have,
absent the ACA. See CBO, Spending & Enrollment Detail for
CBO’s March 2009 Baseline. But see
ante, at
44–45 (“[T]he Act dramatically increases state
obligations under Medicaid.”);
post, at 45 (joint
opinion of Scalia, Kennedy, Thomas, and Alito, JJ.)
(“[A]cceptance of the [ACA expansion] will impose very
substantial costs on participating States.”). Whatever the
increase in state obligations after the ACA, it will pale in
comparison to the increase in federal funding.[
15]
Finally, any fair appraisal of Medicaid would
require acknowledgment of the considerable autonomy States enjoy
under the Act. Far from “conscript[ing] state agencies into
the national bureaucratic army,”
ante, at 55 (citing
FERC v.
Mississippi,
456 U.S.
742, 775 (1982) (O’Connor, J., concurring in judgment in
part and dissenting in part) (brackets in original and internal
quotation marks omitted)), Medicaid “is designed to advance
cooperative federalism.”
Wisconsin Dept. of Health and
Family Servs. v.
Blumer,
534 U.S.
473, 495 (2002) (citing
Harris v.
McRae,
448 U.S.
297, 308 (1980)). Subject to its basic requirements, the
Medicaid Act empowers States to “select dramatically
different levels of funding and coverage, alter and experiment with
different financing and delivery modes, and opt to cover (or not to
cover) a range of parti- cular procedures and therapies. States
have leveraged this policy discretion to generate a myriad of
dramatically different Medicaid programs over the past several
decades.” Ruger, Of Icebergs and Glaciers, 75 Law &
Contemp. Probs. 215, 233 (2012) (footnote omitted). The ACA
does not jettison this approach. States, as first-line
administrators, will continue to guide the distribution of
substantial resources among their needy populations.
The alternative to conditional federal spending,
it bears emphasis, is not state autonomy but state
marginalization.[
16] In
1965, Congress elected to nationalize health coverage for seniors
through Medicare. It could similarly have established Medicaid as
an exclusively federal program. Instead, Congress gave the States
the opportunity to partner in the program’s administration
and development. Absent from the nationalized model, of course, is
the state-level policy discretion and experimentation that is
Medicaid’s hallmark; undoubtedly the interests of federalism
are better served when States retain a meaning- ful role in the
implementation of a program of such importance. See Caminker, State
Sovereignty and Sub- ordinacy, 95 Colum. L. Rev. 1001,
1002–1003 (1995) (coopera- tive federalism can preserve
“a significant role for state discretion in achieving
specified federal goals, where the alternative is complete federal
preemption of any state regulatory role”); Rose-Ackerman,
Cooperative Federalism and Co-optation, 92 Yale L. J. 1344, 1346
(1983) (“If the federal government begins to take full
responsibility for social welfare spending and preempts the states,
the result is likely to be weaker . . . state
governments.”).[
17]
Although Congress “has no obligation to
use its Spending Clause power to disburse funds to the
States,”
College Savings Bank v.
Florida Prepaid
Postsecondary Ed. Expense Bd.,
527 U.S.
666, 686 (1999), it has provided Medicaid grants notable for
their generosity and flexibility. “[S]uch funds,” we
once observed, “are gifts,”
id., at
686–687, and so they have remained through decades of
expansion in their size and scope.
B
The Spending Clause authorizes Congress
“to pay the Debts and provide for the . . . general
Welfare of the United States.” Art. I, §8,
cl. 1. To ensure that federal funds granted to the States are
spent “to ‘provide for the . . . general
Welfare’ in the manner Congress intended,”
ante,
at 46, Congress must of course have authority to impose limitations
on the States’ use of the federal dollars. This Court, time
and again, has respected Congress’ prescription of spending
conditions, and has required States to abide by them. See,
e.g.,
Pennhurst, 451 U. S., at 17 (“[O]ur cases have long
recognized that Congress may fix the terms on which it shall
disburse federal money to the States.”). In particular, we
have recognized Congress’ prerogative to condition a
State’s receipt of Medicaid funding on compliance with the
terms Congress set for participation in the program. See,
e.g., Harris, 448 U. S., at 301 (“[O]nce a
State elects to participate [in Medicaid], it must comply with the
requirements of [the Medicaid Act].”);
Arkansas Dept. of
Health and Human Servs. v.
Ahlborn,
547 U.S.
268, 275 (2006);
Frew v.
Hawkins, 540 U.S. 431,
433 (2004);
Atkins v.
Rivera,
477
U.S. 154, 156–157 (1986).
Congress’ authority to condition the use
of federal funds is not confined to spending programs as first
launched. The legislature may, and often does, amend the law,
imposing new conditions grant recipients henceforth must meet in
order to continue receiving funds. See
infra, at 54
(describing
Bennett v.
Kentucky Dept. of Ed.,
470
U.S. 656, 659–660 (1985) (enforcing restriction added
five years after adoption of educational program)).
Yes, there are federalism-based limits on the
use of Congress’ conditional spending power. In the leading
decision in this area,
South Dakota v.
Dole,
483 U.S.
203 (1987), the Court identified four criteria. 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.”
Id., at 207–208, 210 (internal quotation marks
omitted).[
18]
The Court in
Dole mentioned, but did not
adopt, a further limitation, one hypothetically raised a
half-century earlier: In “some circumstances,” Congress
might be prohibited from offering a “financial inducement
. . . so coercive as to pass the point at which
‘pressure turns into compulsion.’ ”
Id., at 211 (quoting
Steward Machine Co. v.
Davis,
301 U.S.
548, 590 (1937)). Prior to today’s decision, however, the
Court has never ruled that the terms of any grant crossed the
indistinct line between temptation and coercion.
Dole involved the National Minimum
Drinking Age Act, 23 U. S. C. §158, enacted in 1984.
That Act directed the Secretary of Transportation to withhold 5% of
the federal highway funds otherwise payable to a State if the State
permitted purchase of alcoholic beverages by persons less than 21
years old. Drinking age was not within the authority of Congress to
regulate, South Dakota argued, because the Twenty-First Amendment
gave the States exclusive power to control the manufacture,
transportation, and consumption of alcoholic beverages. The small
percentage of highway-construction funds South Dakota stood to lose
by adhering to 19 as the age of eligibility to purchase 3.2% beer,
however, was not enough to qualify as coercion, the Court
concluded.
This case does not present the concerns that led
the Court in
Dole even to consider the prospect of coercion.
In
Dole, the condition—set 21 as the minimum drinking
age— did not tell the States how to use funds Congress pro-
vided for highway construction. Further, in view of the
Twenty-First Amendment, it was an open question whether Congress
could directly impose a national minimum drinking age.
The ACA, in contrast, relates solely to the
federally funded Medicaid program; if States choose not to comply,
Congress has not threatened to withhold funds earmarked for any
other program. Nor does the ACA use Medicaid funding to induce
States to take action Congress itself could not undertake. The
Federal Government undoubtedly could operate its own health-care
program for poor persons, just as it operates Medicare for
seniors’ health care. See
supra, at 44.
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. The
principal standard the ACA sets is that the state program cover
adults earning no more than 133% of the federal poverty line.
Enforcing that prescription ensures that federal funds will be
spent on health care for the poor in furtherance of Congress’
present perception of the general welfare.
C
The Chief Justice asserts that the Medicaid
expan- sion creates a “new health care program.”
Ante, at 54. Moreover, States could “hardly
anticipate” that Congress would “transform [the
program] so dramatically.”
Ante, at 55. Therefore, The
Chief Justice maintains, Congress’ threat to withhold
“old” Medicaid funds based on a State’s refusal
to participate in the “new” program is a
“threa[t] to terminate [an]other . . . independent
gran[t].”
Ante, at 50, 52–53. And because the
threat to withhold a large amount of funds from one program
“leaves the States with no real option but to acquiesce [in a
newly created program],” The Chief Justice concludes, the
Medicaid expansion is unconstitutionally coercive.
Ante, at
52.
1
The starting premise on which The Chief
Justice’s coercion analysis rests is that the ACA did not
really “extend” Medicaid; instead, Congress created an
entirely new program to co-exist with the old. The Chief Justice
calls the ACA new, but in truth, it simply reaches more of
America’s poor than Congress originally covered.
Medicaid was created to enable States to provide
medical assistance to “needy persons.” See S. Rep. No.
404, 89th Cong., 1st Sess., pt. 1, p. 9 (1965). See also
§121(a), 79Stat. 343 (The purpose of Medicaid is to enable
States “to furnish . . . medical assistance on
behalf of [certain persons] whose income and resources are
insufficient to meet the costs of necessary medical
services.”). By bringing health care within the reach of a
larger population of Americans unable to afford it, the Medicaid
expansion is an extension of that basic aim.
The Medicaid Act contains hundreds of provisions
governing operation of the program, setting conditions ranging from
“Limitation on payments to States for expend- itures
attributable to taxes,” 42 U. S. C. §1396a(t)
(2006 ed.), to “Medical assistance to aliens not lawfully
admitted for permanent residence,” §1396b(v) (2006 ed.
and Supp. IV). The Medicaid expansion leaves unchanged the vast
majority of these provisions; it adds beneficiaries to the existing
program and specifies the rate at which States will be reimbursed
for services provided to the added bene- ficiaries. See ACA
§§2001(a)(1), (3), 124Stat. 271–272. The ACA does
not describe operational aspects of the program for these newly
eligible persons; for that information, one must read the existing
Medicaid Act. See 42 U. S. C.
§§1396–1396v(b) (2006 ed. and Supp. IV).
Congress styled and clearly viewed the Medicaid
expansion as an amendment to the Medicaid Act, not as a
“new” health-care program. To the four categories of
beneficiaries for whom coverage became mandatory in 1965, and the
three mandatory classes added in the late 1980’s, see
supra, at 41–42, the ACA adds an eighth: individuals
under 65 with incomes not exceeding 133% of the federal poverty
level. The expansion is effectuated by §2001 of the ACA, aptly
titled: “Medicaid Coverage for the Lowest Income
Populations.” 124Stat. 271. That section amends Title 42,
Chapter 7, Subchapter XIX: Grants to States for Medical Assistance
Programs. Commonly known as the Medicaid Act, Subchapter XIX filled
some 278 pages in 2006. Section 2001 of the ACA would add
approximately three pages.[
19]
Congress has broad authority to construct or
adjust spending programs to meet its contemporary understanding of
“the general Welfare.”
Helvering v.
Davis,
301 U.S.
619, 640–641 (1937). Courts owe a large measure of
respect to Congress’ characterization of the grant programs
it establishes. See
Steward Machine, 301 U. S., at 594. Even
if courts were inclined to second-guess Congress’ conception
of the character of its legislation, how would reviewing judges
divine whether an Act of Congress, purporting to amend a law, is in
reality not an amendment, but a new creation? At what point does an
extension become so large that it “transforms” the
basic law?
Endeavoring to show that Congress created a new
program, The Chief Justice cites three aspects of the expansion.
First, he asserts that, in covering those earning no more than 133%
of the federal poverty line, the Medicaid expansion, unlike pre-ACA
Medicaid, does not “care for the neediest among us.”
Ante, at 53. What makes that so? Single adults earning no
more than $14,856 per year—133% of the current federal
poverty level—surely rank among the Nation’s poor.
Second, according to The Chief Justice,
“Congress mandated that newly eligible persons receive a
level of coverage that is less comprehensive than the traditional
Medicaid benefit package.”
Ibid. That less
comprehensive benefit package, however, is not an innovation
introduced by the ACA; since 2006, States have been free to use it
for many of their Medicaid beneficiaries.[
20] The level of benefits offered therefore does not
set apart post-ACA Medicaid recipients from all those entitled to
benefits pre-ACA.
Third, The Chief Justice correctly notes that
the reimbursement rate for participating States is differ- ent
regarding individuals who became Medicaid-eligible through the ACA.
Ibid. But the rate differs only in its generosity to
participating States. Under pre-ACA Medicaid, the Federal
Government pays up to 83% of the costs of coverage for current
enrollees, §1396d(b) (2006 ed. and Supp. IV); under the ACA,
the federal contribution starts at 100% and will eventually settle
at 90%, §1396d(y). Even if one agreed that a change of as
little as 7 percentage points carries constitutional significance,
is it not passing strange to suggest that the purported incursion
on state sovereignty might have been averted, or at least
mitigated, had Congress offered States
less money to carry
out the same obligations?
Consider also that Congress could have repealed
Medicaid. See
supra, at 38–39 (citing 42
U. S. C. §1304); Brief for Petitioners in No.
11–400, p. 41. Thereafter, Congress could have enacted
Medicaid II, a new program combin- ing the pre-2010 coverage with
the expanded coverage required by the ACA. By what right does a
court stop Congress from building up without first tearing
down?
2
The Chief Justice finds the Medicaid expansion
vulnerable because it took participating States by surprise.
Ante, at 54. “A State could hardly anticipate that
Congres[s]” would endeavor to “transform [the Medicaid
program] so dramatically,” he states.
Ante, at
54–55. For the notion that States must be able to foresee,
when they sign up, alterations Congress might make later on, The
Chief Justice cites only one case:
Pennhurst State School and
Hospital v.
Halderman,
451 U.S.
1.
In
Pennhurst, residents of a state-run,
federally funded institution for the mentally disabled complained
of abusive treatment and inhumane conditions in alleged violation
of the Developmentally Disabled Assistance and Bill of Rights Act.
451 U. S., at 5–6. We held that the State was not
answerable in damages for violating conditions it did not
“voluntarily and knowingly accep[t].”
Id., at
17, 27. Inspecting the statutory language and legislative his-
tory, we found that the Act did not “unambiguously”
impose the requirement on which the plaintiffs relied: that they
receive appropriate treatment in the least restrictive environment.
Id., at 17–18. Satisfied that Congress had not clearly
conditioned the States’ receipt of federal funds on the
States’ provision of such treatment, we declined to read such
a requirement into the Act. Congress’ spending power, we
concluded, “does not include surprising participating States
with postacceptance or ‘retroactive’ conditions.”
Id., at 24–25.
Pennhurst thus instructs that “if
Congress intends to impose a condition on the grant of federal
moneys, it must do so unambiguously.”
Ante, at 53
(quoting
Pennhurst, 451 U. S., at 17). That requirement
is met in this case. Section 2001 does not take effect until 2014.
The ACA makes perfectly clear what will be required of States that
accept Medicaid funding after that date: They must extend
eligibility to adults with incomes no more than 133% of the federal
poverty line. See 42 U. S. C. §1396a(a)(10)(A)
(i)(VIII) (2006 ed. and Supp. IV).
The Chief Justice appears to find in
Pennhurst a requirement that, when spending legislation is
first passed, or when States first enlist in the federal program,
Congress must provide clear notice of conditions it might later
impose. If I understand his point correctly, it was incumbent on
Congress, in 1965, to warn the States clearly of the size and shape
potential changes to Medicaid might take. And absent such notice,
sizable changes could not be made mandatory. Our decisions do not
support such a requirement.[
21]
In
Bennett v.
New Jersey,
470 U.S.
632 (1985), the Secretary of Education sought to recoup Title I
funds[
22] based on the
State’s noncompliance, from 1970 to 1972, with a 1978
amendment to Title I. Relying on
Pennhurst, we rejected the
Secretary’s attempt to recover funds based on the
States’ alleged violation of a rule that did not exist when
the State accepted and spent the funds. See 470 U. S.
,
at 640 (“New Jersey[,] when it applied for and received Title
I funds for the years 1970–1972[,] had no basis to believe
that the propriety of the expenditures would be judged by any
standards other than the ones in effect
at the time.”
(citing
Pennhurst, 451 U. S., at 17, 24–25;
emphasis added)).
When amendment of an existing grant program has
no such retroactive effect, however, we have upheld Congress’
instruction. In
Bennett v.
Kentucky Dept. of Ed.,
470 U.S.
656 (1985), the Secretary sued to recapture Title I funds based
on the Commonwealth’s 1974 violation of a spending condition
Congress added to Title I in 1970. Rejecting Kentucky’s
argument pinned to
Pennhurst, we held that the Commonwealth
suffered no surprise after accepting the federal funds. Kentucky
was therefore obliged to re- turn the money. 470 U. S., at
665–666, 673–674. The conditions imposed were to be
assessed as of 1974, in light of “the legal requirements in
place when the grants were made,”
id., at 670, not as
of 1965, when Title I was originally enacted.
As these decisions show,
Pennhurst’s rule demands that conditions on federal
funds be unambiguously clear at the time a State receives and uses
the money—not at the time, perhaps years earlier, when
Congress passed the law establishing the program. See also
Dole, 483 U. S., at 208 (finding
Pennhurst
satisfied based on the clarity of the Federal Aid Highway Act as
amended in 1984, without looking back to 1956, the year of the
Act’s adoption).
In any event, from the start, the Medicaid Act
put States on notice that the program could be changed: “The
right to alter, amend, or repeal any provision of
[Medicaid],” the statute has read since 1965, “is
hereby reserved to the Congress.” 42 U. S. C.
§1304. The “effect of these few simple words” has
long been settled. See
National Railroad Passenger
Corporation v.
Atchison, T. & S. F. R. Co.,
470 U.S.
451, 467–468, n. 22 (1985) (citing
Sinking Fund
Cases,
99 U.S.
700, 720 (1879)). By reserving the right to “alter,
amend, [or] repeal” a spending program, Congress “has
given special notice of its intention to retain . . .
full and complete power to make such alterations and amendments
. . . as come within the just scope of legislative
power.”
Id., at 720.
Our decision in
Bowen v.
Public
Agencies Opposed to Social Security Entrapment,
477 U.S.
41, 51–52 (1986), is guiding here. As enacted in 1935,
the Social Security Act did not cover state employees.
Id.,
at 44. In response to pressure from States that wanted coverage for
their employees, Congress, in 1950, amended the Act to allow States
to opt into the program.
Id., at 45. The statutory provision
giving States this option expressly permitted them to withdraw from
the program.
Ibid.
Beginning in the late 1970’s, States
increasingly exercised the option to withdraw.
Id., at 46.
Concerned that withdrawals were threatening the integrity of Social
Security, Congress repealed the termination provision. Congress
thereby changed Social Security from a program voluntary for the
States to one from which they could not escape.
Id., at 48.
California objected, arguing that the change impermissibly deprived
it of a right to withdraw from Social Security.
Id., at
49–50. We unanimously rejected California’s argument.
Id., at 51–53. By including in the Act “a clause
expressly reserving to it ‘[t]he right to alter, amend, or
repeal any provision’ of the Act,” we held, Congress
put States on notice that the Act “created no contractual
rights.”
Id., at 51–52. The States therefore had
no law-based ground on which to complain about the amendment,
despite the significant character of the change.
The Chief Justice nevertheless would rewrite
§1304 to countenance only the “right to alter
somewhat,” or “amend,
but not too
much.” Congress, however, did not so qualify §1304.
Indeed, Congress retained discretion to “repeal”
Medicaid, wiping it out entirely. Cf.
Delta Air Lines, Inc.
v.
August,
450 U.S.
346, 368 (1981) (Rehnquist, J., dissenting) (invoking
“the common-sense maxim that the greater includes the
lesser”). As
Bowen indicates, no State could
reasonably have read §1304 as reserving to Congress authority
to make adjustments only if modestly sized.
In fact, no State proceeded on that
understanding. In com- pliance with Medicaid regulations, each
State expressly undertook to abide by future Medicaid changes. See
42 CFR §430.12(c)(1) (2011) (“The [state Medicaid] plan
must provide that it will be amended whenever necessary to reflect
. . . [c]hanges in Federal law, regulations, policy
interpretations, or court decisions.”). Whenever a State
notifies the Federal Government of a change in its own Medicaid
program, the State certifies both that it knows the federally set
terms of participation may change, and that it will abide by those
changes as a condition of continued participation. See,
e.g., Florida Agency for Health Care Admin., State Plan
Under Title XIX of the Social Security Act Medical Assistance
Program §7.1, p. 86 (Oct. 6, 1992).
The Chief Justice insists that the most recent
expansion, in contrast to its predecessors, “accomplishes a
shift in kind, not merely degree.”
Ante, at 53. But
why was Medicaid altered only in degree, not in kind, when Congress
required States to cover millions of children and pregnant women?
See
supra, at 41–42. Congress did not “merely
alte[r] and expan[d] the boundaries of” the Aid to Families
with Dependent Children program. But see
ante, at
53–55. Rather, Congress required participating States to
provide coverage tied to the federal poverty level (as it later did
in the ACA), rather than to the AFDC program. See Brief for
National Health Law Program et al. as
Amici Curiae
16–18. In short, given §1304, this Court’s
construction of §1304’s language in
Bowen, and
the enlargement of Medicaid in the years since 1965,[
23] a State would be hard put to complain
that it lacked fair notice when, in 2010, Congress altered Medicaid
to embrace a larger portion of the Nation’s poor.
3
The Chief Justice ultimately asks whether
“the financial inducement offered by Congress . . .
pass[ed] the point at which pressure turns into compulsion.”
Ante, at 50 (internal quotation marks omitted). The
financial inducement Congress employed here, he concludes, crosses
that threshold: The threatened withholding of “existing
Medicaid funds” is “a gun to the head” that
forces States to acquiesce.
Ante, at 50–51 (citing 42
U. S. C. §1396c).[
24]
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. See
post, at 36, 38.[
25]
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.
When future Spending Clause challenges arrive,
as they likely will in the wake of today’s decision, how will
litigants and judges assess whether “a State has a legitimate
choice whether to accept the federal conditions in exchange for
federal funds”?
Ante, at 48. Are courts to measure the
number of dollars the Federal Government might withhold for
noncompliance? The portion of the State’s budget at stake?
And which State’s—or States’—budget is
determinative: the lead plaintiff, all challenging States (26 in
this case, many with quite different fiscal situations), or some
national median?Does it matter that Florida, unlike most States,
imposes no state income tax, and therefore might be able to replace
foregone federal funds with new state revenue?[
26] Or that the coercion state officials in fact
fear is punishment at the ballot box for turning down a politically
popular federal grant?
The coercion inquiry, therefore, appears to
involve polit- ical judgments that defy judicial calculation. See
Baker v.
Carr,
369 U.S.
186, 217 (1962). Even commentators sympathetic to robust
enforcement of
Dole’s limitations, see
supra,
at 46, have concluded that conceptions of “impermissible
coercion” premised on States’ perceived inability to
decline federal funds “are just too amorphous to be
judicially administrable.” Baker & Berman, Getting off
the
Dole, 78 Ind. L. J. 459, 521, 522, n. 307 (2003)
(citing,
e.g., Scalia, The Rule of Law as a Law of Rules, 56
U. Chi. L. Rev. 1175 (1989)).
At bottom, my colleagues’ position is that
the States’ reliance on federal funds limits Congress’
authority to alter its spending programs. This gets things
backwards: Congress, not the States, is tasked with spending
federal money in service of the general welfare. And each
successive Congress is empowered to appropriate funds as it sees
fit. When the 110th Congress reached a conclusion about Medicaid
funds that differed from its predecessors’ view, it abridged
no State’s right to “existing,” or
“pre-existing,” funds. But see
ante, at
51–52;
post, at 47–48 (joint opinion of Scalia,
Kennedy, Thomas, and Alito, JJ.). For, in fact, there are no such
funds. There is only money States
anticipate receiving from
future Congresses.
D
Congress has delegated to the Secretary of
Health and Human Services the authority to withhold, in whole or in
part, federal Medicaid funds from States that fail to comply with
the Medicaid Act as originally composed and as subsequently
amended. 42 U. S. C. §1396c.[
27] The Chief Justice, however, holds that the
Constitution precludes the Secretary from withholding
“existing” Medicaid funds based on States’
refusal to comply with the expanded Medi- caid program.
Ante, at 55. For the foregoing reasons, I disagree that any
such withholding would violate the Spending Clause. Accordingly, I
would affirm the decision of the Court of Appeals for the Eleventh
Circuit in this regard.
But in view of The Chief Justice’s
disposition, I agree with him that the Medicaid Act’s
severability clause determines the appropriate remedy. That clause
provides that “[i]f any provision of [the Medicaid Act], or
the application thereof to any person or circumstance, is held in-
valid, the remainder of the chapter, and the application of such
provision to other persons or circumstances shall not be affected
thereby.” 42 U. S. C. §1303.
The Court does not strike down any provision of
the ACA. It prohibits only the “application” of the
Secretary’s authority to withhold Medicaid funds from States
that decline to conform their Medicaid plans to the ACA’s
requirements. Thus the ACA’s authorization of funds to
finance the expansion remains intact, and the Secretary’s
authority to withhold funds for reasons other than noncompliance
with the expansion remains unaffected.
Even absent §1303’s command, we would
have no warrant to invalidate the Medicaid expansion, contra
post, at 46–48 (joint opinion of Scalia, Kennedy,
Thomas, and Alito, JJ.), not to mention the entire ACA,
post, at 49–64 (same). For when a court confronts an
unconstitutional statute, its endeavor must be to conserve, not
destroy, the legislature’s dominant objective. See,
e.g.,
Ayotte v.
Planned Parenthood of Northern New Eng.,
546 U.S.
320, 328–330 (2006). In this case, that objective was to
increase access to health care for the poor by increasing the
States’ access to federal funds. The Chief Justice is
undoubtedly right to conclude that Congress may offer States funds
“to expand the availability of health care, and requir[e]
that States accepting such funds comply with the conditions on
their use.”
Ante, at 55. I therefore concur in the
judgment with respect to Part IV–B of The Chief
Justice’s opinion.
* * *
For the reasons stated, I agree with The Chief
Justice that, as to the validity of the minimum coverage provi-
sion, the judgment of the Court of Appeals for the Eleventh Circuit
should be reversed. In my view, the provision en- counters no
constitutional obstruction. Further, I would uphold the Eleventh
Circuit’s decision that the Medicaid expansion is within
Congress’ spending power.