On June 28, 2012, the United States Supreme Court handed down its anxiously awaited decision on the constitutionality of the Affordable Care Act (ACA) in a case entitled National Federation of Independent Businesses et al v. Sibelius (“NFIB”). The decision, while upholding the constitutionality of the ACA, has created several issues of potentially great future significance involving the U.S. Constitution’s commerce clause and spending clause. But the NFIB case, by holding that states may not be sanctioned by the federal government for not implementing ACA’s mandated Medicaid expansion is what has allowed Governor Corbett to request additional hurdles be created before he accepts expansion.
Although the NFIB decision held ACA constitutional, it did so with five of nine justices saying ACA was unconstitutional under the commerce clause, but was constitutional under the Constitution’s taxing clause. The five justices’ commerce clause jurisprudence was bottomed on an outmoded distinction between regulating “activity” versus “inactivity,” which in the future likely will invite constitutional challenges to what hitherto have seemed accepted exercises of federal power.
The NFIB decision also, for the first time, concluded that an exercise of Congress’s power under the spending clause was unconstitutionally “coercive.” While this concept has been adverted to in decisions previous to NFIB, it had not previously been applied. In the NFIB case the Supreme Court, for the first time, did apply the coercion concept. The Court reached this conclusion by trying to draw distinctions between various types of conditions Congress has placed on states’ eligibility to participate in federal spending programs which, as the separate opinion of Justice Ginsberg so witheringly pointed out, are simply, intellectually untenable.
The Supreme Court’s holding of undue coercion under the Constitution’s spending clause was used by the Court to strike down as unconstitutional a power vested in the U.S. Department of Health and Human Services to withhold from states federal funds for a state’s failure to meet ACA’s requirement to expand Medicaid eligibility to everyone under 65 years of age whose income is less than 133% of the federal poverty level (FPL) even though ACA will provide states with 100% federal funding for the cost of this increase in eligibility in the first three years (2014-2016) and no less than 90% thereafter.