Federation of Independent Business v. Sebelius
In 2014 a narrow majority of the U.S. Supreme Court decided a landmark case, the Federation of Independent Business v. Sebelius. The issue was whether Congress had the constitutional right to impose a health care mandate, which was effectively a tax that requires individuals to obtain health care.
The constitutionality of the individual mandate was challenged as soon as the Affordable Care Act (ACA) was signed into law by President Barack Obama in 2010. The mandate was a necessary part of the law that pulled healthy individuals into the “insurance pool” so that the cost of insuring all citizens could be lower by balancing expensive costs of insuring sick people with cheaper costs of insuring the healthy.
The Court’s decision was 5-4 in favor of maintaining the provisions of the ACA intact as well as for the Act’s expansion of Medicaid, but not a provision that would penalize states for rejecting the expansion.
The Federation was a national business group that specifically opposed government intervention in business including taxation and regulation. Sebelius was the national director of the Department of Health and Human Services which oversees the ACA.
This case was a consolidation of multiple lawsuits challenging the validity of the ACA. A district court judge in Florida ruled that the individual mandate aspect of the law was unconstitutional and could not be separated from the rest of the ACA, so the entire Act should be repealed. On appeal, the Eleventh Circuit Court bolstered the possibility that the individual mandate could be removed from the rest of the law.
The Supreme Court, which has final say on the constitutionality of laws, divided the arguments into different topics on different days, first hearing whether a decision could take effect before the ACA law went into practice in 2014, then whether the individual mandate was constitutional, whether it could be severed from the rest of the ACA, and finally whether the ACA’s expansion of Medicaid was legal.