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ACA ruling delivers a surprise (National Federation of Independent Business v. Sebelius)

NFIB v. Sebelius

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The Patient Protection and Affordable Care Act of 2010 (ACA) was one of the most hotly debated pieces of legislation passed in recent memory. Popularly referred to as Obamacare, the ACA sought to overhaul the United States’ health care system.

Two key provisions came under fire:

  1. The ACA’s individual mandate, which required U.S. citizens to obtain health insurance or pay a penalty, and
  2. The Medicaid expansion, which required states to expand program eligibility or risk losing federal funding.

The National Federation of Independent Business, 26 states, and various businesses and individuals (plaintiffs) sued Kathleen Sebelius (defendant), the secretary of the Department of Health and Human Services to challenge these provisions.

A divided U.S. Supreme Court upheld the individual mandate as a valid exercise of Congress’s power to tax, but struck down the Medicaid expansion as an unconstitutional use of Congress’s spending powers. The ruling came as a surprise to many Supreme Court watchers, who had expected both provisions to be invalidated.

Though the ACA continues to be a source of political speculation, the Court’s ruling in National Federation of Independent Business v. Sebelius, 132 S.Ct. 2566 (2012), is a fascinating piece of jurisprudence, most notably for striking down an exercise of Congress’s power to spend as unduly coercive.

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