NATIONAL FEDERATION OF INDEPENDENT BUSINESS ET AL. v. SEBELIUS, SECRETARY OF HEALTH AND HUMAN SERVICES, ET AL.
567 U.S. 519
CERTIORARI TO THE UNITED
STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT
Argued March 26, 27, 28, 2012—Decided June
28, 2012*
ROBERTS, C.
J., announced the judgment of the Court and delivered the opinion of the Court
with respect to Parts I, II, and III–C, in which GINSBURG, BREYER, SOTOMAYOR, and KAGAN, JJ., joined; an
opinion with respect to Part IV, in which BREYER and KAGAN, JJ., joined; and an opinion with respect to Parts III–A, III–B,
and III–D. GINSBURG, J.,
filed an opinion concurring in part, concurring in the judgment in part, and
dissenting in part, in which SOTOMAYOR, J., joined, and in which BREYER and KAGAN, JJ., joined as to Parts I, II, III, and IV. SCALIA, KENNEDY, THOMAS, and ALITO, JJ., filed a
dissenting opinion. THOMAS, J., filed a dissenting opinion.
CHIEF JUSTICE ROBERTS announced the judgment of the Court and delivered the opinion of
the Court with respect to Parts I, II, and III–C, an opinion with respect to
Part IV, in which JUSTICE BREYER and JUSTICE KAGAN join, and an opinion with respect to Parts III–A, III–B, and
III–D.
Today
we resolve constitutional challenges to two provisions of the Patient Protection
and Affordable Care Act of 2010: the individual mandate, which requires
individuals to purchase a health insurance policy providing a minimum level of
coverage; and the Medicaid expansion, which gives funds to the States on the
condition that they provide specified health care to all citizens whose income
falls below a certain threshold. We do not consider whether the Act embodies
sound policies. That judgment is entrusted to the Nation’s elected leaders. We
ask only whether Congress has the power under the Constitution to enact the
challenged provisions.
In our
federal system, the National Government possesses only limited powers; the
States and the people retain the remainder. Nearly two centuries ago, Chief
Justice Marshall observed that “the question respecting the extent of the
powers actually granted” to the Federal Government “is perpetually arising, and
will probably continue to arise, as long as our system shall exist.” McCulloch
v. Maryland, 4 Wheat. 316, 405 (1819). In this case we must again
determine whether the Constitution grants Congress powers it now asserts, but
which many States and individuals believe it does not possess. Resolving this
controversy requires us to examine both the limits of the Government’s power,
and our own limited role in policing those boundaries.
The
Federal Government “is acknowledged by all to be one of enumerated powers.” Ibid.
That is, rather than granting general authority to perform all the conceivable
functions of government, the Constitution lists, or enumerates, the Federal
Government’s powers. Congress may, for example, “coin Money,” “establish Post
Offices,” and “raise and support Armies.” Art. I, §8, cls.
5, 7, 12. The enumeration of powers is also a limitation of powers, because
“[t]he enumeration presupposes something not enumerated.” Gibbons v. Ogden,
9 Wheat. 1, 195 (1824).The Constitution’s express conferral of some powers
makes clear that it does not grant others. And the Federal Government “can
exercise only the powers granted to it.” McCulloch, supra, at
405.
Today,
the restrictions on government power foremost in many Americans’ minds are
likely to be affirmative prohibitions, such as contained in the Bill of
Rights. These affirmative prohibitions come into play, however, only where the
Government possesses authority to act in the first place. If no enumerated
power authorizes Congress to pass a certain law, that law may not be enacted,
even if it would not violate any of the express prohibitions in the Bill of
Rights or elsewhere in the Constitution.
Indeed,
the Constitution did not initially include a Bill of Rights at least partly
because the Framers felt the enumeration of powers sufficed to restrain the
Government. As Alexander Hamilton put it, “the Constitution is itself, in every
rational sense, and to every useful purpose, A BILL OF RIGHTS.” The Federalist No. 84, p. 515 (C. Rossiter
ed. 1961). And when the Bill of Rights was ratified, it made express what the
enumeration of powers necessarily implied: “The powers not delegated to the
United States by the Constitution . . . are reserved to the States
respectively, or to the people.” U. S. Const., Amdt.
10. The Federal Government has expanded dramatically over the past two
centuries, but it still must show that a constitutional grant of power
authorizes each of its actions. See, e.g., United States v. Comstock,
560 U. S. ___ (2010).
The
same does not apply to the States, because the Constitution is not the source
of their power. The Constitution may restrict state governments—as it does,
for example, by forbidding them to deny any person the equal protection of the
laws. But where such prohibitions do not apply, state governments do not need
constitutional authorization to act. The States thus can and do perform many
of the vital functions of modern government—punishing street crime, running
public schools, and zoning property for development, to name but a few—even
though the Constitution’s text does not authorize any government to do so. Our
cases refer to this general power of governing, possessed by the States but
not by the Federal Government, as the “police power.” See, e.g., United
States v. Morrison, 529 U. S. 598, 618–619 (2000).
“State
sovereignty is not just an end in itself: Rather, federalism secures to
citizens the liberties that derive from the diffusion of sovereign power.” New
York v. United States, 505 U. S. 144, 181 (1992) (internal quotation
marks omitted). Because the police power is controlled by50 different States
instead of one national sovereign, the facets of governing that touch on
citizens’ daily lives are normally administered by smaller governments closer
to the governed. The Framers thus ensured that powers which “in the ordinary
course of affairs, concern the lives, liberties, and properties of the people”
were held by governments more local and more accountable than a distant
federal bureaucracy. The Federalist
No. 45, at 293 (J. Madison). The independent power of the States also serves as
a check on the power of the Federal Government: “By denying any one government
complete jurisdiction over all the concerns of public life, federalism protects
the liberty of the individual from arbitrary power.” Bond v. United
States, 564 U. S. ___, ___ (2011) (slip op., at 9–10).
This
case concerns two powers that the Constitution does grant the Federal
Government, but which must be read carefully to avoid creating a general
federal authority akin to the police power. The Constitution authorizes
Congress to “regulate Commerce with foreign Nations, and among the several
States, and with the Indian Tribes.” Art. I, §8, cl. 3. Our precedents read
that to mean that Congress may regulate “the channels of interstate commerce,”
“persons or things in interstate commerce,” and “those activities that substantially
affect interstate commerce.” Morrison, supra, at 609 (internal
quotation marks omitted). The power over activities that substantially affect
interstate commerce can be expansive. That power has been held to authorize
federal regulation of such seemingly local matters as a farmer’s decision to
grow wheat for himself and his livestock, and a loan shark’s extortionate
collections from a neighborhood butcher shop. See Wickard v. Filburn,
317 U. S. 111 (1942); Perez v. United States, 402 U. S. 146
(1971).
Congress
may also “lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts
and provide for the common Defence and general
Welfare of the United States.” U. S. Const., Art. I, §8, cl. 1. Put simply, Congress
may tax and spend. This grant gives the Federal Government considerable
influence even in areas where it cannot directly regulate. The Federal
Government may enact a tax on an activity that it cannot authorize, forbid, or
otherwise control. See, e.g., License Tax Cases, 5 Wall. 462, 471
(1867). And in exercising its spending power, Congress may offer funds to the
States, and may condition those offers on compliance with specified conditions.
See, e.g., College Savings Bank v. Florida Prepaid Postsecondary Ed.
Expense Bd., 527 U. S. 666, 686 (1999). These offers may well induce the
States to adopt policies that the Federal Government itself could not impose.
See, e.g., South Dakota v. Dole, 483 U. S. 203, 205–206 (1987)
(conditioning federal highway funds on States raising their drinking age to
21).
The
reach of the Federal Government’s enumerated powers is broader still because
the Constitution authorizes Congress to “make all Laws which shall be necessary
and proper for carrying into Execution the foregoing Powers.” Art. I, §8, cl.
18. We have long read this provision to give Congress great latitude in
exercising its powers: “Let the end be legitimate, let it be within the scope
of the constitution, and all means which are appropriate, which are plainly
adapted to that end, which are not prohibited, but consist with the letter and
spirit of the constitution, are constitutional.” McCulloch, 4 Wheat., at
421.
Our
permissive reading of these powers is explained in part by a general reticence
to invalidate the acts of the Nation’s elected leaders. “Proper respect for a
co-ordinate branch of the government” requires that we strike down an Act of
Congress only if “the lack of constitutional authority to pass [the] act in
question is clearly demonstrated.” United States v. Harris, 106 U.
S. 629, 635 (1883).Members of this Court are vested with the authority to
interpret the law; we possess neither the expertise nor the prerogative to make
policy judgments. Those decisions are entrusted to our Nation’s elected
leaders, who can be thrown out of office if the people disagree with them. It
is not our job to protect the people from the consequences of their political
choices.
Our
deference in matters of policy cannot, however, become abdication in matters of
law. “The powers of the legislature are defined and limited; and that those
limits may not be mistaken, or forgotten, the constitution is written.” Marbury
v. Madison, 1 Cranch 137, 176 (1803). Our respect for Congress’s
policy judgments thus can never extend so far as to disavow restraints on
federal power that the Constitution carefully constructed. “The peculiar
circumstances of the moment may render a measure more or less wise, but cannot
render it more or less constitutional.” Chief Justice John Marshall, A Friend
of the Constitution No. V, Alexandria
Gazette, July 5, 1819, in John Marshall’s Defense of McCulloch v. Maryland
190–191 (G. Gunther ed. 1969). And there can be no question that it is the
responsibility of this Court to enforce the limits on federal power by
striking down acts of Congress that transgress those limits. Marbury v. Madison,
supra, at 175–176.
The
questions before us must be considered against the background of these basic
principles.
I
In 2010, Congress enacted the Patient Protection
and Affordable Care Act, 124 Stat. 119. The Act aims to increase the number of
Americans covered by health insurance and decrease the cost of health care.
The Act’s 10 titles stretch over 900 pages and contain hundreds of provisions.
This case concerns constitutional challenges to two key provisions, commonly
referred to as the individual mandate and the Medicaid expansion. The
individual mandate requires most Americans to maintain “minimum essential”
health insurance coverage.26 U. S. C. §5000A. The mandate does not apply to
some individuals, such as prisoners and undocumented aliens. §5000A(d). Many
individuals will receive the required coverage through their employer, or from
a government program such as Medicaid or Medicare. See §5000A(f). But for
individuals who are not exempt and do not receive health insurance through a
third party, the means of satisfying the requirement is to purchase insurance
from a private company. Beginning in 2014, those who do not comply with the
mandate must make a “[s]hared responsibility payment”
to the Federal Government. §5000A(b)(1). That payment, which the Act describes
as a “penalty,” is calculated as a percentage of household income, subject to a
floor based on a specified dollar amount and a ceiling based on the average
annual premium the individual would have to pay for qualifying private health
insurance. §5000A(c). In 2016, for example, the penalty will be 2.5 percent of
an individual’s household income, but no less than $695 and no more than the
average yearly premium for insurance that covers 60 percent of the cost of 10
specified services (e.g., prescription drugs and hospitalization). Ibid.;
42 U. S. C. §18022. The Act provides that the penalty will be paid to the
Internal Revenue Service with an individual’s taxes, and “shall be assessed and
collected in the same manner” as tax penalties, such as the penalty for
claiming too large an income tax refund. 26 U. S. C. §5000A(g)(1). The Act,
however, bars the IRS from using several of its normal enforcement tools, such
as criminal prosecutions and levies. §5000A(g)(2). And some individuals who are
subject to the mandate are nonetheless exempt from the penalty—for example,
those with income below a certain threshold and members of Indian tribes.
§5000A(e).
On the
day the President signed the Act into law, Florida and 12 other States filed a
complaint in the Federal District Court for the Northern District of Florida.
Those plaintiffs—who are both respondents and petitioners here, depending on
the issue—were subsequently joined by 13more States, several individuals, and
the National Federation of Independent Business. The plaintiffs alleged, among
other things, that the individual mandate provisions of the Act exceeded
Congress’s powers under Article I of the Constitution. The District Court
agreed, holding that Congress lacked constitutional power to enact the
individual mandate. 780 F. Supp. 2d 1256 (ND Fla. 2011).The District Court
determined that the individual mandate could not be severed from the remainder
of the Act, and therefore struck down the Act in its entirety. Id., at
1305–1306.
The
Court of Appeals for the Eleventh Circuit affirmed in part and reversed in
part. The court affirmed the District Court’s holding that the individual mandate
exceeds Congress’s power. 648 F. 3d 1235 (2011). The panel unanimously agreed
that the individual mandate did not impose a tax, and thus could not be
authorized by Congress’s power to “lay and collect Taxes.” U. S. Const., Art.
I, §8, cl. 1. A majority also held that the individual mandate was not
supported by Congress’s power to “regulate Commerce . . . among the several
States.” Id., cl. 3. According to the majority, the Commerce Clause does
not empower the Federal Government to order individuals to engage in commerce,
and the Government’s efforts to cast the individual mandate in a different
light were unpersuasive. Judge Marcus dissented, reasoning that the individual
mandate regulates economic activity that has a clear effect on interstate commerce.
Having
held the individual mandate to be unconstitutional, the majority examined
whether that provision could be severed from the remainder of the Act. The majority
determined that, contrary to the District Court’s view, it could. The court thus
struck down only the individual mandate, leaving the Act’s other provisions
intact.648 F. 3d, at 1328.
Other
Courts of Appeals have also heard challenges to the individual mandate. The
Sixth Circuit and the D. C. Circuit upheld the mandate as a valid exercise of
Congress’s commerce power. See Thomas More Law Center v. Obama,
651 F. 3d 529 (CA6 2011); Seven-Sky v. Holder, 661 F. 3d 1 (CADC
2011). The Fourth Circuit determined that the Anti-Injunction Act prevents
courts from considering the merits of that question. See Liberty Univ.,
Inc. v. Geithner, 671 F. 3d 391 (2011). That statute bars suits “for
the purpose of restraining the assessment or collection of any tax.” 26 U. S.
C. §7421(a). A majority of the Fourth Circuit panel reasoned that the individual
mandate’s penalty is a tax within the meaning of the Anti-Injunction Act,
because it is a financial assessment collected by the IRS through the normal
means of taxation. The majority therefore determined that the plaintiffs could
not challenge the individual mandate until after they paid the penalty.1
——————
1The
Eleventh Circuit did not consider whether the Anti-Injunction Act bars
challenges to the individual mandate. The District Court had determined that it
did not, and neither side challenged that holding on appeal. The same was true
in the Fourth Circuit, but that court examined the question sua
sponte because it viewed the Anti-InjunctionAct
as a limit on its subject matter jurisdiction. See Liberty Univ., 671 F.
3d, at 400–401. The Sixth Circuit and the D. C. Circuit considered the question
but determined that the Anti-Injunction Act did not apply. See Thomas More,
651 F. 3d, at 539–540 (CA6); Seven-Sky, 661 F. 3d, at 5–14 (CADC).——————
The second provision of the
Affordable Care Act directly challenged here is the Medicaid expansion. Enacted
in 1965, Medicaid offers federal funding to States to assist pregnant women,
children, needy families, the blind, the elderly, and the disabled in obtaining
medical care. See 42 U. S. C. §1396a(a)(10). In order
to receive that funding, States must comply with federal criteria governing matters
such as who receives care and what services are provided at what cost. By 1982
every State had chosen to participate in Medicaid. Federal funds received
through the Medicaid program have become a substantial part of state budgets,
now constituting over 10 percent of most States’ total revenue.
The
Affordable Care Act expands the scope of the Medicaid program and increases
the number of individuals the States must cover. For example, the Act requires
state programs to provide Medicaid coverage to adults with incomes up to 133
percent of the federal poverty level, whereas many States now cover adults with
children only if their income is considerably lower, and do not cover childless
adults at all. See §1396a(a)(10)(A)(i)(VIII). The Act increases federal funding to cover the
States’ costs in expanding Medicaid coverage, although States will bear a
portion of the costs on their own. §1396d(y)(1). If a State does not comply
with the Act’s new coverage requirements, it may lose not only the federal
funding for those requirements, but all of its federal Medicaid funds. See
§1396c.
Along with their challenge to the individual mandate, the state
plaintiffs in the Eleventh Circuit argued that the Medicaid expansion exceeds
Congress’s constitutional powers. The Court of Appeals unanimously held that the Medicaid
expansion is a valid exercise of Congress’s power under the Spending Clause. U.
S. Const., Art. I, §8, cl. 1. And the court rejected the States’ claim that the
threatened loss of all federal Medicaid funding violates the Tenth Amendment
by coercing them into complying with the Medicaid expansion. 648 F. 3d, at
1264, 1268.
We
granted certiorari to review the judgment of the Court of Appeals for the
Eleventh Circuit with respect to both the individual mandate and the Medicaid
expansion. 565 U. S. ___ (2011). Because no party supports the Eleventh
Circuit’s holding that the individual mandate can be completely severed from
the remainder of the Affordable Care Act, we appointed an amicus curiae to
defend that aspect of the judgment below. And because there is a reasonable
argument that the Anti-Injunction Act deprives us of jurisdiction to hear
challenges to the individual mandate, but no party supports that proposition,
we appointed an amicus curiae to advance
it.2
——————
2We
appointed H. Bartow Farr III to brief and argue in support of the Eleventh Circuit’s
judgment with respect to severability, and Robert A. Long to brief and argue
the proposition that the Anti-Injunction Act bars the current challenges to the
individual mandate. 565 U. S. ___ (2011). Both amici have ably
discharged their assigned responsibilities.
* * *
III
The Government advances two theories for the
proposition that Congress had constitutional authority to enact the individual
mandate. First, the Government argues that Congress had the power to enact the mandate
under the Commerce Clause. Under that theory, Congress may order individuals to
buy health insurance because the failure to do so affects interstate commerce,
and could undercut the Affordable Care Act’s other reforms. Second, the
Government argues that if the commerce power does not support the mandate, we
should nonetheless uphold it as an exercise of Congress’s power to tax.
According to the Government, even if Congress lacks the power to direct
individuals to buy insurance, the only effect of the individual mandate is to
raise taxes on those who do not do so, and thus the law may be upheld as a tax.
A
The Government’s first argument is that the
individual mandate is a valid exercise of Congress’s power under the Commerce
Clause and the Necessary and Proper Clause. According to the Government, the
health care market is characterized by a significant cost-shifting problem.
Everyone will eventually need health care at a time and to an extent they
cannot predict, but if they do not have insurance, they often will not be able
to pay for it. Because state and federal laws nonetheless require hospitals to
provide a certain degree of care to individuals without regard to their ability
to pay, see, e.g., 42 U. S. C. §1395dd; Fla. Stat. Ann. §395.1041,
hospitals end up receiving compensation for only a portion of the services they
provide. To recoup the losses, hospitals pass on the cost to insurers through
higher rates, and insurers, in turn, pass on the cost to policy holders in the
form of higher premiums. Congress estimated that the cost of uncompensated
care raises family health insurance premiums, on average, by over $1,000 per
year. 42 U. S. C. §18091(2)(F).In the Affordable Care
Act, Congress addressed the problem of those who cannot obtain insurance
coverage because of preexisting conditions or other health issues. It did so
through the Act’s “guaranteed-issue” and “community- rating” provisions. These
provisions together prohibit insurance companies from denying coverage to
those with such conditions or charging unhealthy individuals higher premiums
than healthy individuals. See §§300gg, 300gg–1, 300gg–3, 300gg–4. The
guaranteed-issue and community-rating reforms do not, however, address the
issue of healthy individuals who choose not to purchase insurance to cover
potential healthcare needs. In fact, the reforms sharply exacerbate that
problem, by providing an incentive for individuals to delay purchasing health
insurance until they become sick, relying on the promise of guaranteed and affordable
coverage. The
reforms also threaten to impose massive new costs on insurers, who are required
to accept unhealthy individuals but prohibited from charging them rates
necessary to pay for their coverage. This will lead insurers to significantly
increase premiums on everyone. See Brief for America’s Health Insurance Plans
et al. as Amici Curiae in No. 11– 393 etc. 8–9.
The individual mandate was Congress’s solution to these problems.
By requiring that individuals purchase health insurance, the mandate prevents
cost-shifting by those who would otherwise go without it. In addition, the
mandate forces into the insurance risk pool more healthy individuals, whose
premiums on average will be higher than their health care expenses. This allows
insurers to subsidize the costs of covering the unhealthy individuals the
reforms require them to accept. The Government claims that Congress has power
under the Commerce and Necessary and Proper Clauses to enact this solution.
1
The
Government contends that the individual mandate is within Congress’s power
because the failure to purchase insurance “has a substantial and deleterious
effect on interstate commerce” by creating the cost-shifting problem.
Brief for United States 34. The path of our Commerce Clause decisions has not
always run smooth, see United States v. Lopez, 514 U. S. 549,
552–559 (1995), but it is now well established that Congress has broad authority
under the Clause. We have recognized, for example, that “[t]he power of
Congress over interstate commerce is not confined to the regulation of commerce
among the states,” but extends to activities that “have a substantial effect on
interstate commerce.” United States v. Darby, 312 U. S. 100,
118–119 (1941). Congress’s power, moreover, is not limited to regulation of an
activity that by itself substantially affects interstate commerce, but also
extends to activities that do so only when aggregated with similar activities
of others. See Wickard, 317 U. S., at 127–128.
Given
its expansive scope, it is no surprise that Congress has employed the commerce
power in a wide variety of ways to address the pressing needs of the time. But
Congress has never attempted to rely on that power to compel individuals not
engaged in commerce to purchase an unwanted product.3 Legislative
novelty is not necessarily fatal; there is a first time for everything. But
sometimes “the most telling indication of [a] severe constitutional problem .
. . is the lack of historical precedent” for Congress’s action. Free
Enterprise Fund v. Public Company Accounting Oversight Bd., 561 U.
S. ___, ___ (2010) (slip op., at 25) (internal quotation marks omitted). At the
very least, we should “pause to consider the implications of the Government’s
arguments” when confronted with such new conceptions of federal power. Lopez,
supra, at 564.
——————3The examples
of other congressional mandates cited by JUSTICE
GINSBURG, post, at 35, n. 10 (opinion concurring in
part, concurring in judgment in part, and dissenting in part), are not to the contrary.
Each of those mandates—to report for jury duty, to register for the draft, topurchase firearms in anticipation of militia service, to
exchange gold currency for paper currency, and to file a tax return—are based
on constitutional provisions other than the Commerce Clause. See Art. I, §8,
cl. 9 (to “constitute Tribunals inferior to the supreme Court”); id., cl.
12 (to “raise and support Armies”); id., cl. 16 (to “provide for organizing,
arming, and disciplining, the Militia”); id., cl. 5 (to “coin Money”); id.,
cl. 1 (to “lay and collect Taxes”). 19 Cite as: 567 U. S. ____ (2012).
—————
The
Constitution grants Congress the power to “regulate Commerce.” Art. I,
§8, cl. 3 (emphasis added). The power to regulate commerce presupposes
the existence of commercial activity to be regulated. If the power to
“regulate” something included the power to create it, many of the provisions in
the Constitution would be superfluous. For example, the Constitution gives
Congress the power to “coin Money,” in addition to the power to “regulate the
Value thereof.” Id., cl. 5. And it 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.” Id., cls. 12–14. If the power
to regulate the armed forces or the value of money included the power to bring
the subject of the regulation into existence, the specific grant of such powers
would have been unnecessary. The language of the Constitution reflects the
natural understanding that the power to regulate assumes there is already
something to be regulated. See Gibbons, 9 Wheat., at 188 (“[T]he
enlightened patriots who framed our constitution, and the people who adopted
it, must be understood to have employed words in their natural sense, and to
have intended what they have said”).4
Our
precedent also reflects this understanding. As expansive as our cases
construing the scope of the commerce power have been, they all have one thing in
common: They uniformly describe the power as reaching “activity.” It is nearly
impossible to avoid the word when quoting them. See, e.g., Lopez, supra,
at 560 (“Where economic activity substantially affects interstate commerce,
legislation regulating that activity will be sus-
——————
4 JUSTICE
GINSBURG suggests that “at the time the Constitution
was framed, to ‘regulate’ meant, among other things, to require action.” Post,
at 23 (citing Seven-Sky v. Holder, 661 F. 3d 1, 16 (CADC 2011); brackets
and some internal quotation marks omitted). But to reach this conclusion, the
case cited by JUSTICE GINSBURG relied
on a dictionary in which “[t]o order; to command” was the fifth-alternative
definition of “to direct,” which was itself the second-alternative definition
of “to regulate.” See Seven-Sky, supra, at 16 (citing S. Johnson,
Dictionary of the English Language (4th ed. 1773) (reprinted 1978)). It is
unlikely that the Framers had such an obscure meaning in mind when they used
the word “regulate.” Far more commonly, “[t]o regulate” meant “[t]o adjust by
rule or method,” which presupposes something to adjust. 2 Johnson, supra,
at 1619; see also Gibbons, 9 Wheat., at 196 (defining the commerce power
as the power “to prescribe the rule by which commerce is to be governed”).
tained”); Perez,
402 U. S., at 154 (“Where the class of activities is regulated and that class
is within the reach of federal power, the courts have no power to excise,
as trivial, individual instances of the class” (emphasis in original; internal
quotation marks omitted)); Wickard, supra, at 125 (“[E]ven if appellee’s activity 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”); NLRB
v. Jones & Laughlin Steel Corp., 301 U. S. 1, 37 (1937) (“Although
activities may be intrastate in character when separately considered, if they
have such a close and substantial relation to interstate commerce that their
control is essential or appropriate to protect that commerce from burdens and
obstructions, Congress cannot be denied the power to exercise that control”);
see also post, at 15, 25–26, 28, 32 (GINSBURG, J., concurring in part,
concurring in judgment in part, and dissenting in part).5
The
individual mandate, however, does not regulate existing commercial activity. It
instead compels individuals to become active in commerce by purchasing
a product, on the ground that their failure to do so affects interstate
commerce. Construing the Commerce Clause to permit Congress to regulate
individuals precisely because they are doing nothing would open a new
and potentially vast domain to congressional authority. Every day individuals
do not do an infinite number of things. In some cases they
——————
5 JUSTICE
GINSBURG cites two eminent domain cases from the 1890s
to support the proposition that our case law does not “toe the activity versus
inactivity line.” Post, at 24–25 (citing Monongahela Nav. Co. v. United
States, 148 U. S. 312, 335–337 (1893), and Cherokee Nation v. Southern
Kansas R. Co., 135 U. S. 641, 657–659 (1890)). The fact that the Fifth
Amendment requires the payment of just compensation when the Government
exercises its power of eminent domain does not turn the taking into a
commercial transaction between the landowner and the Government, let alone a
government-compelled transaction between the landowner and a third party.
decide not to do something; in
others they simply fail to do it. Allowing Congress to justify federal
regulation by pointing to the effect of inaction on commerce would bring
countless decisions an individual could potentially make within the
scope of federal regulation, and—under the Government’s theory—empower Congress
to make those decisions for him.
Applying the Government’s logic to the
familiar case of Wickard v. Filburn shows how far that logic
would carry us from the notion of a government of limited powers. In Wickard,
the Court famously upheld a federal penalty imposed on a farmer for growing
wheat for consumption on his own farm. 317 U. S., at 114–115, 128–129. That
amount of wheat caused the farmer to exceed his quota under a program designed
to support the price of wheat by limiting supply. The Court rejected the
farmer’s argument that growing wheat for home consumption was beyond the reach
of the commerce power. It did so on the ground that
the farmer’s decision to grow wheat for his own use allowed him to avoid purchasing
wheat in the market. That decision, when considered in the aggregate along with
similar decisions of others, would have had a substantial effect on the
interstate market for wheat. Id., at 127–129.
Wickard
has long been regarded as “perhaps the most far reaching example
of Commerce Clause authority over intrastate activity,” Lopez, 514 U.
S., at 560, but the Government’s theory in this case would go much further.
Under Wickard it is within Congress’s power to regulate the market for
wheat by supporting its price. But price can be supported by increasing demand
as well as by decreasing supply. The aggregated decisions of some consumers not
to purchase wheat have a substantial effect on the price of wheat, just as
decisions not to purchase health insurance have on the price of insurance.
Congress can therefore command that those not buying wheat do so, just as it
argues here that it may command that those not buying health insurance do so.
The farmer in Wickard was at least actively engaged in the production of
wheat, and the Government could regulate that activity because of its effect on
commerce. The Government’s theory here would effectively override that
limitation, by establishing that individuals may be regulated under the
Commerce Clause whenever enough of them are not doing something the Government
would have them do.
Indeed,
the Government’s logic would justify a mandatory purchase to solve almost any
problem. See Seven-Sky, 661 F. 3d, at 14–15 (noting the Government’s
inability to “identify any mandate to purchase a product or service in
interstate commerce that would be unconstitutional” under its theory of the
commerce power). To consider a different example in the health care market,
many Americans do not eat a balanced diet. That group makes up a larger
percentage of the total population than those without health insurance. See, e.g.,
Dept. of Agriculture and Dept. of Health and Human Services, Dietary Guidelines for Americans 1
(2010). The failure of that group to have a healthy diet increases health care
costs, to a greater extent than the failure of the uninsured to purchase
insurance. See, e.g., Finkelstein, Trogdon,
Cohen, & Dietz, “Annual Medical Spending Attributable to Obesity: Payer-
and Service-Specific Estimates,” 28 Health Affairs 822 (2009) (detailing the
“undeniable link between rising rates of obesity and rising medical spending,”
and estimating that “the annual medical burden of obesity has risen to almost
10 percent of all medical spending and could amount to $147 billion per year in
2008”). Those increased costs are borne in part by other Americans who must
pay more, just as the uninsured shift costs to the insured. See Center for
Applied Ethics, “Voluntary Health Risks: Who Should Pay?”, 6 Issues in Ethics 6
(1993) (noting “overwhelming evidence that individuals with unhealthy habits
pay only a fraction of the costs associated with their behaviors; most of the
expense is borne by the rest of society in the form of higher insurance
premiums, government expenditures for health care, and disability benefits”).
Congress addressed the insurance problem by ordering everyone to buy insurance.
Under the Government’s theory, Congress could address the diet problem by
ordering everyone to buy vegetables. See Dietary
Guidelines, supra, at 19 (“Improved nutrition, appropriate eating
behaviors, and increased physical activity have tremendous potential to . . .
reduce health care costs”).
People,
for reasons of their own, often fail to do things that would be good for them
or good for society. Those failures—joined with the similar failures of
others—can readily have a substantial effect on interstate commerce. Under the
Government’s logic, that authorizes Congress to use its commerce power to
compel citizens to act as the Government would have them act.
That is not the country the Framers of our
Constitution
envisioned. James Madison explained that the Commerce
Clause was “an addition which few oppose and from
which no apprehensions are entertained.” The
Federalist No. 45, at 293. While Congress’s authority under the Commerce Clause
has of course expanded with the growth of the national
economy, our cases have “always recognized that the power to regulate commerce,
though broad indeed, has limits.” Maryland v. Wirtz, 392 U. S. 183,
196 (1968). The Government’s theory would erode those limits, permitting
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.” The
Federalist No. 48, at 309 (J. Madison). Congress already enjoys vast power to regulate much of what we do. Accepting the
Government’s theory would give Congress the same license to regulate what we do not do, fundamentally changing the
relation between the citizen and the Federal Government.6
——————
6In
an attempt to recast the individual mandate as a regulation of commercial
activity, JUSTICE GINSBURG suggests
that “[a]n individual who opts not to purchase insurance from a private insurer
can be seen as actively selecting another form of insurance: self-insurance.” Post,
at 26. But “self-insurance” is, in this context, nothing more than a description
of the failure to purchase insurance. Individuals are no more “activ[e] in the self-insurance market” when they fail to
purchase insurance, ibid., than they are active in the “rest” market
when doing nothing.
To an
economist, perhaps, there is no difference between activity and inactivity;
both have measurable economic effects on commerce. But the distinction between
doing something and doing nothing would not have been lost on the Framers, who
were “practical statesmen,” not metaphysical philosophers. Industrial Union
Dept., AFL–CIO v. American Petroleum Institute, 448 U. S. 607, 673
(1980) (Rehnquist, J., concurring in judgment). As we have explained, “the
framers of the Constitution were not mere visionaries, toying with speculations
or theories, but practical men, dealing with the facts of political life as
they understood them, putting into form the government they were creating, and
prescribing in language clear and intelligible the powers that government was
to take.” South Carolina v. United States, 199 U. S. 437, 449
(1905). The Framers gave Congress the power to regulate commerce, not
to compel it, and for over 200 years both our decisions and Congress’s
actions have reflected this understanding. There is no reason to depart from
that understanding now.
The Government
sees things differently. It argues that because sickness and injury are
unpredictable but unavoidable, “the uninsured as a class are active in the market
for health care, which they regularly seek and obtain.” Brief for United States
50. The individual mandate “merely regulates how individuals finance and pay
for that active participation—requiring that they do so through insurance,
rather than through attempted self-insurance with the back-stop of shifting
costs to others.” Ibid.
The
Government repeats the phrase “active in the market for health care”
throughout its brief, see id., at 7, 18, 34, 50, but that concept has no
constitutional significance. An individual who bought a car two years ago and
may buy another in the future is not “active in the car market” in any
pertinent sense. The phrase “active in the market” cannot obscure the fact that
most of those regulated by the individual mandate are not currently engaged in
any commercial activity involving health care, and that fact is fatal to the
Government’s effort to “regulate the uninsured as a class.” Id., at 42.
Our precedents recognize Congress’s power to regulate “class[es] of activities,” Gonzales v. Raich, 545 U. S. 1, 17 (2005) (emphasis added), not
classes of individuals, apart from any activity in which they are
engaged, see, e.g., Perez, 402 U. S., at 153 (“Petitioner is clearly a
member of the class which engages in ‘extortionate credit transactions’ . . .”
(emphasis deleted)).
The individual mandate’s regulation of the
uninsured as a class is, in fact, particularly divorced from any link to
existing commercial activity. The mandate primarily affects healthy, often
young adults who are less likely to need significant health care and have other
priorities for spending their money. It is precisely because these individuals,
as an actuarial class, incur relatively low healthcare costs that the mandate
helps counter the effect of forcing insurance companies to cover others who
impose greater costs than their premiums are allowed to reflect. See 42 U. S.
C. §18091(2)(I) (recognizing that the mandate would “broaden the health
insurance risk pool to include healthy individuals, which will lower health
insurance premiums”). If the individual mandate is targeted at a class, it is a
class whose commercial inactivity rather than activity is its defining feature.
The
Government, however, claims that this does not matter. The Government regards
it as sufficient to trigger Congress’s authority that almost all those who are
uninsured will, at some unknown point in the future, engage in a health care
transaction. Asserting that “[t]here is no temporal limitation in the Commerce
Clause,” the Government argues that because “[e]veryone
subject to this regulation is in or will be in the health care market,” they
can be “regulated in advance.” Tr. of Oral Arg. 109 (Mar. 27, 2012).
The
proposition that Congress may dictate the conduct of an individual today
because of prophesied future activity finds no support in our precedent. We
have said that Congress can anticipate the effects on commerce of an economic
activity. See, e.g., Consolidated Edison Co. v. NLRB, 305 U. S.
197 (1938) (regulating the labor practices of utility companies); Heart of
Atlanta Motel, Inc. v. United States, 379 U. S. 241 (1964)
(prohibiting discrimination by hotel operators); Katzenbach v. McClung,
379 U. S. 294 (1964) (prohibiting discrimination by restaurant owners). But we
have never permitted Congress to anticipate that activity itself in order to
regulate individuals not currently engaged in commerce. Each one of our cases,
including those cited by JUSTICE GINSBURG, post, at 20–21, involved preexisting economic activity.
See, e.g., Wickard, 317 U. S., at 127–129 (producing wheat); Raich, supra, at 25 (growing marijuana).
Everyone will likely participate in the
markets for food, clothing, transportation, shelter, or energy; that does not
authorize Congress to direct them to purchase particular products in those or
other markets today. The Commerce Clause is not a general license to regulate
an individual from cradle to grave, simply because he will predictably engage
in particular transactions. Any police power to regulate individuals as such,
as opposed to their activities, remains vested in the States.
The
Government argues that the individual mandate can be sustained as a sort of
exception to this rule, because health insurance is a unique product. According
to the Government, upholding the individual mandate would not justify mandatory
purchases of items such as cars or broccoli because, as the Government puts it,
“[h]ealth insurance is not purchased for its own
sake like a car or broccoli; it is a means of financing health-care consumption
and covering universal risks.” Reply Brief for United States 19. But cars and
broccoli are no more purchased for their “own sake” than health insurance. They
are purchased to cover the need for transportation and food.
The
Government says that health insurance and healthcare financing are “inherently
integrated.” Brief for United States 41. But that does not mean the compelled
purchase of the first is properly regarded as a regulation of the second. No
matter how “inherently integrated” health insurance and health care consumption
may be, they are not the same thing: They involve different transactions,
entered into at different times, with different providers. And for most of
those targeted by the mandate, significant health care needs will be years, or
even decades, away. The proximity and degree of connection between the mandate
and the subsequent commercial activity is too lacking to justify an exception
of the sort urged by the Government. The individual mandate forces individuals
into commerce precisely because they elected to refrain from commercial
activity. Such a law cannot be sustained under a clause authorizing Congress to
“regulate Commerce.”
* * *