Spending Clause Case Study

The issue at hand is whether or not Congress had the authority under the Constitution to enact the challenged provisions. The two sides in this case are: the government arguing against the states, individuals and NFIB. The latter group believing that Congress does not have the power to enact these provisions. The plaintiffs argued that the individual mandate exceeded Congress powers under Article I of the Constitution and that the Medicaid expansion exceed Congress’s authority under the Spending Clause. In regards to the individual mandate, Congress chose to describe the shared responsibility payment imposed on those who do not forgo health insurance as a penalty rather than a tax. Although Congress does not label it as such, the plaintiffs

One being that under the Commerce Clause, Congress had the authority to order individuals to purchase health insurance, as failure to do so would affect interstate commerce. Second being that even if Congress does not have power to support the mandate, it should be upheld under Congress’s exercise to tax. The only effect of the individual mandate is to raise taxes on those who do not purchase insurance and therefore can be upheld as a tax. The government’s first argument of exerting individual mandate under the Commerce Clause and Necessary Proper Clause is legitimate as the health care market is defined by a “significant cost-shifting problem” (National Federation of Independent Business v. Sebelius). The government’s argument relies on both a moral and political assumption; health care purchasers should not be forced to bear the burden of paying higher premiums as a result of the spillover costs for uninsured citizens. Every citizen will need some form of health insurance eventually and without it, they would often not be able to cover the cost of health care. State and federal laws require hospitals to offer a certain degree of care despite the individual not being able to pay. Consequently, hospitals shift their losses onto insurers and in turn insurers charge policy holders more expensive rates through higher

These provisions “prohibit insurance companies from denying coverage to those with such conditions or charging unhealthy individuals higher premiums than healthy individuals” (National Federation of Independent Business v. Sebelius). The plaintiff’s second argument, however, states that government does not take into consideration the healthy individuals who choose not to purchase insurance. This argument is formed on the political premise that since health care costs are too much of a strain, it is easier for a healthy individual to live without health care coverage than to bear the burden of its cost. The reform will ultimately force healthy individuals to pay for premiums that will be higher than their actual health care expenses. It would also increase premium costs overall by accepting unhealthy individuals who cannot be charged the necessary rates to pay for their