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Power to Tax Used by US Supreme Court to Sustain Health Insurance Mandate


The US Supreme Court used the government's alternative position to uphold individual mandates to purchase insurance as constitutional. Supreme Court Chief Justice Roberts followed Congress's designation that the mandate was a "penalty" and not a tax, in order to reach the issues before it, avoiding the anti-injunction act. Then failing to find a way to sustain the individual mandate under the Commerce Clause or the Necessary and Proper Clause, it then concluded that the payment was essentially a tax, appropriate under the Spending Clause to find it constitutional except when applying it with respect to Medicaid funds.

Perhaps the federal government will find it necessary to modify the Affordable Care Act to be consistent with the Court's determination, which would delay some aspects of its application. It seems unlikely that such a requirement would affect measures already passed, including the January 1, 2013, effective date of express tax provisions.

A more detail analysis of the decision will be forthcoming on our web site.