The Supreme Court of the United States – NATIONAL FEDERATION OF INDEPENDENT BUSINESS, ET AL., PETITIONERS 11–393 v. KATHLEEN SEBELIUS, SECRETARY OF HEALTH AND HUMAN SERVICES, ET AL.

NATIONAL FEDERATION OF INDEPENDENT
BUSINESS ET AL. v. SEBELIUS, SECRETARY OF
HEALTH AND HUMAN SERVICES, ET AL
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE ELEVENTH CIRCUIT
No. 11–393. Argued March 26, 27, 28, 2012—Decided June 28, 2012*
In 2010, Congress enacted the Patient Protection and Affordable Care
Act in order to increase the number of Americans covered by health
Insurance and decrease the cost of health care. One key provision is
The individual mandate, which requires most Americans to maintain
“minimum essential” health insurance coverage. 26 U. S. C. §5000A
For individuals who are not exempt, and who do not receive health
Insurance through an employer or government program, the means of
Satisfying the requirement is to purchase insurance from a private
Company. Beginning in 2014, those who do not comply with the
Mandate must make a “[s]hared responsibility payment” to the Federal Government. §5000A(b)(1). The Act provides that this “penalty”
Will be paid to the Internal Revenue Service with an individual’s taxes, and “shall be assessed and collected in the same manner” as tax
Penalties. §§5000A(c), (g)(1)
Another key provision of the Act is the Medicaid expansion. The
Current Medicaid program offers federal funding to States to assist
Pregnant women, children, needy families, the blind, the elderly, and
The disabled in obtaining medical care. 42 U. S. C. §1396d(a). The
Affordable Care Act expands the scope of the Medicaid program and
Increases the number of individuals the States must cover. For ex-
——————
*Together with No. 11–398, Department of Health and Human Services et al. v. Florida et al., and No. 11–400, Florida et al. v. Department
Of Health and Human Services et al., also on certiorari to the same
Court

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Ample, the Act requires state programs to provide Medicaid coverage
By 2014 to adults with incomes up to 133 percent of the federal poverty level, whereas many States now cover adults with children only
If their income is considerably lower, and do not cover childless adults
At all. §1396a(a)(10)(A)(i)(VIII). The Act increases federal funding to
Cover the States’ costs in expanding Medicaid coverage. §1396d(y)(1)
But if a State does not comply with the Act’s new coverage requirements, it may lose not only the federal funding for those requirements, but all of its federal Medicaid funds. §1396c
Twenty-six States, several individuals, and the National Federation of Independent Business brought suit in Federal District Court
Challenging the constitutionality of the individual mandate and the
Medicaid expansion. The Court of Appeals for the Eleventh Circuit
Upheld the Medicaid expansion as a valid exercise of Congress’s
Spending power, but concluded that Congress lacked authority to enact the individual mandate. Finding the mandate severable from the
Act’s other provisions, the Eleventh Circuit left the rest of the Act intact
Held: The judgment is affirmed in part and reversed in part
648 F. 3d 1235, affirmed in part and reversed in part
1. CHIEF JUSTICE ROBERTS delivered the opinion of the Court with
Respect to Part II, concluding that the Anti-Injunction Act does not
Bar this suit
The Anti-Injunction Act provides that “no suit for the purpose of
Restraining the assessment or collection of any tax shall be maintained in any court by any person,” 26 U. S. C. §7421(a), so that those
Subject to a tax must first pay it and then sue for a refund. The present challenge seeks to restrain the collection of the shared responsibility payment from those who do not comply with the individual
Mandate. But Congress did not intend the payment to be treated as
A “tax” for purposes of the Anti-Injunction Act. The Affordable Care
Act describes the payment as a “penalty,” not a “tax.” That label
Cannot control whether the payment is a tax for purposes of the Constitution, but it does determine the application of the Anti-Injunction
Act. The Anti-Injunction Act therefore does not bar this suit. Pp. 11–
15
2. CHIEF JUSTICE ROBERTS concluded in Part III–A that the individual mandate is not a valid exercise of Congress’s power under the
Commerce Clause and the Necessary and Proper Clause. Pp. 16–30
(a) The Constitution grants Congress the power to “regulate
Commerce.” Art. I, §8, cl. 3 (emphasis added). The power to regulate
Commerce presupposes the existence of commercial activity to be regulated. This Court’s precedent reflects this understanding: As expansive as this Court’s cases construing the scope of the commerce

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Power have been, they uniformly describe the power as reaching “activity.” E.g., United States v. Lopez, 514 U. S. 549, 560. The individual mandate, however, does not regulate existing commercial activity. It instead compels individuals to become active in commerce by
Purchasing a product, on the ground that their failure to do so affects
Interstate commerce
Construing the Commerce Clause to permit Congress to regulate
Individuals precisely because they are doing nothing would open a
New and potentially vast domain to congressional authority. Congress already possesses expansive power to regulate what people do
Upholding the Affordable Care Act under the Commerce Clause
Would give Congress the same license to regulate what people do not
Do. The Framers knew the difference between doing something and
Doing nothing. They gave Congress the power to regulate commerce
Not to compel it. Ignoring that distinction would undermine the principle that the Federal Government is a government of limited and
Enumerated powers. The individual mandate thus cannot be sustained under Congress’s power to “regulate Commerce.” Pp. 16–27
(b) Nor can the individual mandate be sustained under the Necessary and Proper Clause as an integral part of the Affordable Care
Act’s other reforms. Each of this Court’s prior cases upholding laws
Under that Clause involved exercises of authority derivative of, and
In service to, a granted power. E.g., United States v. Comstock, 560
U. S. ___. The individual mandate, by contrast, vests Congress with
The extraordinary ability to create the necessary predicate to the exercise of an enumerated power and draw within its regulatory scope
Those who would otherwise be outside of it. Even if the individual
Mandate is “necessary” to the Affordable Care Act’s other reforms
Such an expansion of federal power is not a “proper” means for making those reforms effective. Pp. 27–30
3. CHIEF JUSTICE ROBERTS concluded in Part III–B that the individual mandate must be construed as imposing a tax on those who do
Not have health insurance, if such a construction is reasonable
The most straightforward reading of the individual mandate is that
It commands individuals to purchase insurance. But, for the reasons
Explained, the Commerce Clause does not give Congress that power
It is therefore necessary to turn to the Government’s alternative argument: that the mandate may be upheld as within Congress’s power
To “lay and collect Taxes.” Art. I, §8, cl. 1. In pressing its taxing
Power argument, the Government asks the Court to view the mandate as imposing a tax on those who do not buy that product. Because “every reasonable construction must be resorted to, in order to
Save a statute from unconstitutionality,” Hooper v. California, 155
U. S. 648, 657, the question is whether it is “fairly possible” to inter-

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Pret the mandate as imposing such a tax, Crowell v. Benson, 285
U. S. 22, 62. Pp. 31–32
4. CHIEF JUSTICE ROBERTS delivered the opinion of the Court with
Respect to Part III–C, concluding that the individual mandate may be
Upheld as within Congress’s power under the Taxing Clause. Pp. 33–
44
(a) The Affordable Care Act describes the “[s]hared responsibility
Payment” as a “penalty,” not a “tax.” That label is fatal to the application of the Anti-Injunction Act. It does not, however, control
Whether an exaction is within Congress’s power to tax. In answering
That constitutional question, this Court follows a functional approach
“[d]isregarding the designation of the exaction, and viewing its substance and application.” United States v. Constantine, 296 U. S. 287
294. Pp. 33–35
(b) Such an analysis suggests that the shared responsibility
Payment may for constitutional purposes be considered a tax. The
Payment is not so high that there is really no choice but to buy health
Insurance; the payment is not limited to willful violations, as penalties for unlawful acts often are; and the payment is collected solely by
The IRS through the normal means of taxation. Cf. Bailey v. Drexel
Furniture Co., 259 U. S. 20, 36–37. None of this is to say that payment is not intended to induce the purchase of health insurance. But
The mandate need not be read to declare that failing to do so is unlawful. Neither the Affordable Care Act nor any other law attaches
Negative legal consequences to not buying health insurance, beyond
Requiring a payment to the IRS. And Congress’s choice of language—
Stating that individuals “shall” obtain insurance or pay a “penalty”—
Does not require reading §5000A as punishing unlawful conduct. It
May also be read as imposing a tax on those who go without insurance. See New York v. United States, 505 U. S. 144, 169–174
Pp. 35–40
(c) Even if the mandate may reasonably be characterized as a
Tax, it must still comply with the Direct Tax Clause, which provides:
“No Capitation, or other direct, Tax shall be laid, unless in Proportion
To the Census or Enumeration herein before directed to be taken.”
Art. I, §9, cl. 4. A tax on going without health insurance is not like a
Capitation or other direct tax under this Court’s precedents. It therefore need not be apportioned so that each State pays in proportion to
Its population. Pp. 40–41
5. CHIEF JUSTICE ROBERTS, joined by JUSTICE BREYER and JUSTICE
KAGAN, concluded in Part IV that the Medicaid expansion violates
The Constitution by threatening States with the loss of their existing
Medicaid funding if they decline to comply with the expansion
Pp. 45–58

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(a) The Spending Clause grants Congress the power “to pay the
Debts and provide for the . . . general Welfare of the United States.”
Art. I, §8, cl. 1. Congress may use this power to establish cooperative
State-federal Spending Clause programs. The legitimacy of Spending
Clause legislation, however, depends on whether a State voluntarily
And knowingly accepts the terms of such programs. Pennhurst State
School and Hospital v. Halderman, 451 U. S. 1, 17. “[T]he Constitution simply does not give Congress the authority to require the States
To regulate.” New York v. United States, 505 U. S. 144, 178. When
Congress threatens to terminate other grants as a means of pressuring the States to accept a Spending Clause program, the legislation
Runs counter to this Nation’s system of federalism. Cf. South Dakota
V. Dole, 483 U. S. 203, 211. Pp. 45–51
(b) Section 1396c gives the Secretary of Health and Human Services the authority to penalize States that choose not to participate in
The Medicaid expansion by taking away their existing Medicaid funding. 42 U. S. C. §1396c. The threatened loss of over 10 percent of a
State’s overall budget is economic dragooning that leaves the States
With no real option but to acquiesce in the Medicaid expansion. The
Government claims that the expansion is properly viewed as only a
Modification of the existing program, and that this modification is
Permissible because Congress reserved the “right to alter, amend, or
Repeal any provision” of Medicaid. §1304. But the expansion accomplishes a shift in kind, not merely degree. The original program was
Designed to cover medical services for particular categories of vulnerable individuals. Under the Affordable Care Act, Medicaid is transformed into a program to meet the health care needs of the entire
Nonelderly population with income below 133 percent of the poverty
Level. A State could hardly anticipate that Congress’s reservation of
The right to “alter” or “amend” the Medicaid program included the
Power to transform it so dramatically. The Medicaid expansion thus
Violates the Constitution by threatening States with the loss of their
Existing Medicaid funding if they decline to comply with the expansion. Pp. 51–55
(c) The constitutional violation is fully remedied by precluding
The Secretary from applying §1396c to withdraw existing Medicaid
Funds for failure to comply with the requirements set out in the expansion. See §1303. The other provisions of the Affordable Care Act
Are not affected. Congress would have wanted the rest of the Act to
Stand, had it known that States would have a genuine choice whether
To participate in the Medicaid expansion. Pp. 55–58
6. JUSTICE GINSBURG, joined by JUSTICE SOTOMAYOR, is of the view
That the Spending Clause does not preclude the Secretary from withholding Medicaid funds based on a State’s refusal to comply with the
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Expanded Medicaid program. But given the majority view, she
Agrees with THE CHIEF JUSTICE’s conclusion in Part IV–B that the
Medicaid Act’s severability clause, 42 U. S. C. §1303, determines the
Appropriate remedy. Because THE CHIEF JUSTICE finds the withholding—not the granting—of federal funds incompatible with the Spending Clause, Congress’ extension of Medicaid remains available to any
State that affirms its willingness to participate. Even absent §1303’s
Command, the Court would have no warrant to invalidate the funding
Offered by the Medicaid expansion, and surely no basis to tear down
The ACA in its entirety. When a court confronts an unconstitutional
Statute, its endeavor must be to conserve, not destroy, the legislation
See, e.g., Ayotte v. Planned Parenthood of Northern New Eng., 546
U. S. 320, 328–330. Pp. 60–61
ROBERTS, C. J., announced the judgment of the Court and delivered
The opinion of the Court with respect to Parts I, II, and III–C, in which
GINSBURG, BREYER, SOTOMAYOR, and KAGAN, JJ., joined; an opinion with
Respect to Part IV, in which BREYER and KAGAN, JJ., joined; and an
Opinion with respect to Parts III–A, III–B, and III–D. GINSBURG, J.,
Filed an opinion concurring in part, concurring in the judgment in part
And dissenting in part, in which SOTOMAYOR, J., joined, and in which
BREYER and KAGAN, JJ., joined as to Parts I, II, III, and IV. SCALIA
KENNEDY, THOMAS, and ALITO, JJ., filed a dissenting opinion. THOMAS
J., filed a dissenting opinion

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Cite as: 567 U. S. ____ (2012) 1
Opinion of ROBERTS, C. J
NOTICE: This opinion is subject to formal revision before publication in the
Preliminary print of the United States Reports. Readers are requested to
Notify the Reporter of Decisions, Supreme Court of the United States, Washington, D. C. 20543, of any typographical or other formal errors, in order
That corrections may be made before the preliminary print goes to press
SUPREME COURT OF THE UNITED STATES
Nos. 11–393, 11–398 and 11–400
NATIONAL FEDERATION OF INDEPENDENT
BUSINESS, ET AL., PETITIONERS
11–393 v
KATHLEEN SEBELIUS, SECRETARY OF HEALTH
AND HUMAN SERVICES, ET AL
DEPARTMENT OF HEALTH AND HUMAN
SERVICES, ET AL., PETITIONERS
11–398 v
FLORIDA ET AL
FLORIDA, ET AL., PETITIONERS
11–400 v
DEPARTMENT OF HEALTH AND
HUMAN SERVICES ET AL
ON WRITS OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE ELEVENTH CIRCUIT
[June 28, 2012]
CHIEF JUSTICE ROBERTS announced the judgment of the
Court and delivered the opinion of the Court with respect
To Parts I, II, and III–C, an opinion with respect to Part
IV, in which JUSTICE BREYER and JUSTICE KAGAN join
And an opinion with respect to Parts III–A, III–B, and
III–D
Today we resolve constitutional challenges to two provisions of the Patient Protection and Affordable Care Act of
2 NATIONAL FEDERATION OF INDEPENDENT
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2010: the individual mandate, which requires individuals
To purchase a health insurance policy providing a minimum level of coverage; and the Medicaid expansion, which
Gives funds to the States on the condition that they provide specified health care to all citizens whose income falls
Below a certain threshold. We do not consider whether the
Act embodies sound policies. That judgment is entrusted
To the Nation’s elected leaders. We ask only whether
Congress has the power under the Constitution to enact
The challenged provisions
In our federal system, the National Government possesses only limited powers; the States and the people
Retain the remainder. Nearly two centuries ago, Chief
Justice Marshall observed that “the question respecting
The extent of the powers actually granted” to the Federal
Government “is perpetually arising, and will probably
Continue to arise, as long as our system shall exist.”
McCulloch v. Maryland, 4 Wheat. 316, 405 (1819). In this
Case we must again determine whether the Constitution
Grants Congress powers it now asserts, but which many
States and individuals believe it does not possess. Resolving this controversy requires us to examine both the limits
Of the Government’s power, and our own limited role in
Policing those boundaries
The Federal Government “is acknowledged by all to
Be one of enumerated powers.” Ibid. That is, rather
Than granting general authority to perform all the conceivable functions of government, the Constitution lists, or
Enumerates, the Federal Government’s powers. Congress
May, for example, “coin Money,” “establish Post Offices,”
And “raise and support Armies.” Art. I, §8, cls. 5, 7, 12
The enumeration of powers is also a limitation of powers, because “[t]he enumeration presupposes something not
Enumerated.” Gibbons v. Ogden, 9 Wheat. 1, 195 (1824)
The Constitution’s express conferral of some powers
Makes clear that it does not grant others. And the Federal

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Opinion of ROBERTS, C. J
Government “can exercise only the powers granted to it.”
McCulloch, supra, at 405
Today, the restrictions on government power foremost in
Many Americans’ minds are likely to be affirmative prohibitions, such as contained in the Bill of Rights. These
Affirmative prohibitions come into play, however, only where
The Government possesses authority to act in the first
Place. If no enumerated power authorizes Congress to
Pass a certain law, that law may not be enacted, even if it
Would not violate any of the express prohibitions in the
Bill of Rights or elsewhere in the Constitution
Indeed, the Constitution did not initially include a Bill
Of Rights at least partly because the Framers felt the enumeration of powers sufficed to restrain the Government
As Alexander Hamilton put it, “the Constitution is itself
In every rational sense, and to every useful purpose
A BILL OF RIGHTS.” The Federalist No. 84, p. 515 (C. Rossiter ed. 1961). And when the Bill of Rights was ratified
It made express what the enumeration of powers necessarily implied: “The powers not delegated to the United
States by the Constitution . . . are reserved to the States
Respectively, or to the people.” U. S. Const., Amdt. 10
The Federal Government has expanded dramatically over
The past two centuries, but it still must show that a constitutional grant of power authorizes each of its actions. See
E.g., United States v. Comstock, 560 U. S. ___ (2010)
The same does not apply to the States, because the Constitution is not the source of their power. The Constitution may restrict state governments—as it does, for
Example, by forbidding them to deny any person the equal
Protection of the laws. But where such prohibitions do
Not apply, state governments do not need constitutional authorization to act. The States thus can and do perform
Many of the vital functions of modern government—
Punishing street crime, running public schools, and zoning
Property for development, to name but a few—even though
4 NATIONAL FEDERATION OF INDEPENDENT
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The Constitution’s text does not authorize any government
To do so. Our cases refer to this general power of governing, possessed by the States but not by the Federal Government, as the “police power.” See, e.g., United States v
Morrison, 529 U. S. 598, 618–619 (2000)
“State sovereignty is not just an end in itself: Rather
Federalism secures to citizens the liberties that derive from
The diffusion of sovereign power.” New York v. United
States, 505 U. S. 144, 181 (1992) (internal quotation
Marks omitted). Because the police power is controlled by
50 different States instead of one national sovereign, the
Facets of governing that touch on citizens’ daily lives are
Normally administered by smaller governments closer to
The governed. The Framers thus ensured that powers
Which “in the ordinary course of affairs, concern the lives
Liberties, and properties of the people” were held by governments more local and more accountable than a dis-
Tant federal bureaucracy. The Federalist No. 45, at 293
(J. Madison). The independent power of the States also
Serves as a check on the power of the Federal Government:
“By denying any one government complete jurisdiction
Over all the concerns of public life, federalism protects the
Liberty of the individual from arbitrary power.” Bond v
United States, 564 U. S. ___, ___ (2011) (slip op., at 9–10)
This case concerns two powers that the Constitution
Does grant the Federal Government, but which must be
Read carefully to avoid creating a general federal authority
Akin to the police power. The Constitution authorizes
Congress to “regulate Commerce with foreign Nations, and
Among the several States, and with the Indian Tribes.”
Art. I, §8, cl. 3. Our precedents read that to mean that
Congress may regulate “the channels of interstate commerce,” “persons or things in interstate commerce,” and
“those activities that substantially affect interstate commerce.” Morrison, supra, at 609 (internal quotation marks
Omitted). The power over activities that substantially
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Opinion of ROBERTS, C. J
Affect interstate commerce can be expansive. That power
Has been held to authorize federal regulation of such seemingly local matters as a farmer’s decision to grow wheat
For himself and his livestock, and a loan shark’s extortionate collections from a neighborhood butcher shop
See Wickard v. Filburn, 317 U. S. 111 (1942); Perez v
United States, 402 U. S. 146 (1971)
Congress may also “lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the
Common Defence and general Welfare of the United
States.” U. S. Const., Art. I, §8, cl. 1. Put simply, Congress may tax and spend. This grant gives the Federal
Government considerable influence even in areas where
It cannot directly regulate. The Federal Government may
Enact a tax on an activity that it cannot authorize, forbid
Or otherwise control. See, e.g., License Tax Cases, 5 Wall
462, 471 (1867). And in exercising its spending power
Congress may offer funds to the States, and may condition
Those offers on compliance with specified conditions. See
E.g., College Savings Bank v. Florida Prepaid Postsecondary Ed. Expense Bd., 527 U. S. 666, 686 (1999). These
Offers may well induce the States to adopt policies that
The Federal Government itself could not impose. See, e.g.,
South Dakota v. Dole, 483 U. S. 203, 205–206 (1987) (conditioning federal highway funds on States raising their
Drinking age to 21)
The reach of the Federal Government’s enumerated
Powers is broader still because the Constitution authorizes
Congress to “make all Laws which shall be necessary and
Proper for carrying into Execution the foregoing Powers.”
Art. I, §8, cl. 18. We have long read this provision to give
Congress great latitude in exercising its powers: “Let the
End be legitimate, let it be within the scope of the constitution, and all means which are appropriate, which are
Plainly adapted to that end, which are not prohibited, but
Consist with the letter and spirit of the constitution, are
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Constitutional.” McCulloch, 4 Wheat., at 421
Our permissive reading of these powers is explained in
Part by a general reticence to invalidate the acts of the
Nation’s elected leaders. “Proper respect for a co-ordinate
Branch of the government” requires that we strike down
An Act of Congress only if “the lack of constitutional
Authority to pass [the] act in question is clearly demonstrated.” United States v. Harris, 106 U. S. 629, 635 (1883)
Members of this Court are vested with the authority to
Interpret the law; we possess neither the expertise nor
The prerogative to make policy judgments. Those decisions
Are entrusted to our Nation’s elected leaders, who can be
Thrown out of office if the people disagree with them. It is
Not our job to protect the people from the consequences of
Their political choices
Our deference in matters of policy cannot, however
Become abdication in matters of law. “The powers of the
Legislature are defined and limited; and that those lim-
Its may not be mistaken, or forgotten, the constitution is
Written.” Marbury v. Madison, 1 Cranch 137, 176 (1803)
Our respect for Congress’s policy judgments thus can
Never extend so far as to disavow restraints on federal
Power that the Constitution carefully constructed. “The
Peculiar circumstances of the moment may render a
Measure more or less wise, but cannot render it more or
Less constitutional.” Chief Justice John Marshall, A
Friend of the Constitution No. V, Alexandria Gazette, July
5, 1819, in John Marshall’s Defense of McCulloch v. Maryland 190–191 (G. Gunther ed. 1969). And there can be no
Question that it is the responsibility of this Court to enforce the limits on federal power by striking down acts of
Congress that transgress those limits. Marbury v. Madison, supra, at 175–176
The questions before us must be considered against the
Background of these basic principles. Opinion of ROBERTS, C. J

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Opinion of the Court
I
In 2010, Congress enacted the Patient Protection and
Affordable Care Act, 124 Stat. 119. The Act aims to increase the number of Americans covered by health insurance and decrease the cost of health care. The Act’s 10
Titles stretch over 900 pages and contain hundreds of
Provisions. This case concerns constitutional challenges to
Two key provisions, commonly referred to as the individual
Mandate and the Medicaid expansion
The individual mandate requires most Americans to
Maintain “minimum essential” health insurance coverage
26 U. S. C. §5000A. The mandate does not apply to some
Individuals, such as prisoners and undocumented aliens
§5000A(d). Many individuals will receive the required coverage through their employer, or from a government program such as Medicaid or Medicare. See §5000A(f). But
For individuals who are not exempt and do not receive
Health insurance through a third party, the means of
Satisfying the requirement is to purchase insurance from a
Private company
Beginning in 2014, those who do not comply with the
Mandate must make a “[s]hared responsibility payment”
To the Federal Government. §5000A(b)(1). That payment
Which the Act describes as a “penalty,” is calculated as a
Percentage of household income, subject to a floor based on
A specified dollar amount and a ceiling based on the average annual premium the individual would have to pay for
Qualifying private health insurance. §5000A(c). In 2016
For example, the penalty will be 2.5 percent of an individual’s household income, but no less than $695 and no more
Than the average yearly premium for insurance that covers 60 percent of the cost of 10 specified services (e.g.,
Prescription drugs and hospitalization). Ibid.; 42 U. S. C
§18022. The Act provides that the penalty will be paid to
The Internal Revenue Service with an individual’s taxes
And “shall be assessed and collected in the same manner” Opinion of ROBERTS, C. J

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As tax penalties, such as the penalty for claiming too
Large an income tax refund. 26 U. S. C. §5000A(g)(1). The
Act, however, bars the IRS from using several of its normal enforcement tools, such as criminal prosecutions and
Levies. §5000A(g)(2). And some individuals who are subject to the mandate are nonetheless exempt from the
Penalty—for example, those with income below a certain
Threshold and members of Indian tribes. §5000A(e)
On the day the President signed the Act into law, Florida and 12 other States filed a complaint in the Federal
District Court for the Northern District of Florida. Those
Plaintiffs—who are both respondents and petitioners here
Depending on the issue—were subsequently joined by 13
More States, several individuals, and the National Federation of Independent Business. The plaintiffs alleged
Among other things, that the individual mandate provisions of the Act exceeded Congress’s powers under Article
I of the Constitution. The District Court agreed, holding
That Congress lacked constitutional power to enact the
Individual mandate. 780 F. Supp. 2d 1256 (ND Fla. 2011)
The District Court determined that the individual mandate could not be severed from the remainder of the Act
And therefore struck down the Act in its entirety. Id., at
1305–1306
The Court of Appeals for the Eleventh Circuit affirmed
In part and reversed in part. The court affirmed the District Court’s holding that the individual mandate exceeds
Congress’s power. 648 F. 3d 1235 (2011). The panel
Unanimously agreed that the individual mandate did not
Impose a tax, and thus could not be authorized by Congress’s power to “lay and collect Taxes.” U. S. Const.,
Art. I, §8, cl. 1. A majority also held that the individual
Mandate was not supported by Congress’s power to “regulate Commerce . . . among the several States.” Id., cl. 3
According to the majority, the Commerce Clause does not
Empower the Federal Government to order individuals to Opinion of ROBERTS, C. J

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Opinion of the Court
Engage in commerce, and the Government’s efforts to cast
The individual mandate in a different light were unpersuasive. Judge Marcus dissented, reasoning that the individual mandate regulates economic activity that has a clear
Effect on interstate commerce
Having held the individual mandate to be unconstitutional, the majority examined whether that provision
Could be severed from the remainder of the Act. The majority determined that, contrary to the District Court’s
View, it could. The court thus struck down only the individual mandate, leaving the Act’s other provisions intact
648 F. 3d, at 1328
Other Courts of Appeals have also heard challenges to
The individual mandate. The Sixth Circuit and the D. C
Circuit upheld the mandate as a valid exercise of Congress’s commerce power. See Thomas More Law Center v
Obama, 651 F. 3d 529 (CA6 2011); Seven-Sky v. Holder
661 F. 3d 1 (CADC 2011). The Fourth Circuit determined
That the Anti-Injunction Act prevents courts from considering the merits of that question. See Liberty Univ., Inc
V. Geithner, 671 F. 3d 391 (2011). That statute bars suits
“for the purpose of restraining the assessment or collection
Of any tax.” 26 U. S. C. §7421(a). A majority of the Fourth
Circuit panel reasoned that the individual mandate’s
Penalty is a tax within the meaning of the Anti-Injunction
Act, because it is a financial assessment collected by the
IRS through the normal means of taxation. The majority
Therefore determined that the plaintiffs could not challenge the individual mandate until after they paid the
Penalty.1
——————
1
The Eleventh Circuit did not consider whether the Anti-Injunction
Act bars challenges to the individual mandate. The District Court had
Determined that it did not, and neither side challenged that holding on
Appeal. The same was true in the Fourth Circuit, but that court
Examined the question sua sponte because it viewed the Anti-Injunction
Act as a limit on its subject matter jurisdiction. See Liberty Univ., 671 Opinion of ROBERTS, C. J

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The second provision of the Affordable Care Act directly
Challenged here is the Medicaid expansion. Enacted in
1965, Medicaid offers federal funding to States to assist
Pregnant women, children, needy families, the blind, the
Elderly, and the disabled in obtaining medical care. See 42
U. S. C. §1396a(a)(10). In order to receive that funding
States must comply with federal criteria governing matters such as who receives care and what services are provided at what cost. By 1982 every State had chosen to
Participate in Medicaid. Federal funds received through
The Medicaid program have become a substantial part of
State budgets, now constituting over 10 percent of most
States’ total revenue
The Affordable Care Act expands the scope of the Medicaid program and increases the number of individuals the
States must cover. For example, the Act requires state
Programs to provide Medicaid coverage to adults with
Incomes up to 133 percent of the federal poverty level
Whereas many States now cover adults with children only
If their income is considerably lower, and do not cover
Childless adults at all. See §1396a(a)(10)(A)(i)(VIII). The
Act increases federal funding to cover the States’ costs in
Expanding Medicaid coverage, although States will bear a
Portion of the costs on their own. §1396d(y)(1). If a State
Does not comply with the Act’s new coverage requirements, it may lose not only the federal funding for those
Requirements, but all of its federal Medicaid funds. See
§1396c
Along with their challenge to the individual mandate
The state plaintiffs in the Eleventh Circuit argued that the
Medicaid expansion exceeds Congress’s constitutional
——————
F. 3d, at 400–401. The Sixth Circuit and the D. C. Circuit considered
The question but determined that the Anti-Injunction Act did not apply
See Thomas More, 651 F. 3d, at 539–540 (CA6); Seven-Sky, 661 F. 3d
At 5–14 (CADC). Opinion of ROBERTS, C. J
Cite as: 567 U. S. ____ (2012) 11
Opinion of the Court
Powers. The Court of Appeals unanimously held that the
Medicaid expansion is a valid exercise of Congress’s power
Under the Spending Clause. U. S. Const., Art. I, §8, cl. 1
And the court rejected the States’ claim that the threatened loss of all federal Medicaid funding violates the
Tenth Amendment by coercing them into complying with
The Medicaid expansion. 648 F. 3d, at 1264, 1268
We granted certiorari to review the judgment of the
Court of Appeals for the Eleventh Circuit with respect to
Both the individual mandate and the Medicaid expansion
565 U. S. ___ (2011). Because no party supports the Eleventh Circuit’s holding that the individual mandate can
Be completely severed from the remainder of the Affordable
Care Act, we appointed an amicus curiae to defend that
Aspect of the judgment below. And because there is a
Reasonable argument that the Anti-Injunction Act deprives us of jurisdiction to hear challenges to the individual mandate, but no party supports that proposition, we
Appointed an amicus curiae to advance it.2
II
Before turning to the merits, we need to be sure we have
The authority to do so. The Anti-Injunction Act provides
That “no suit for the purpose of restraining the assessment
Or collection of any tax shall be maintained in any court
By any person, whether or not such person is the person against whom such tax was assessed.” 26 U. S. C
§7421(a). This statute protects the Government’s ability
To collect a consistent stream of revenue, by barring litigation to enjoin or otherwise obstruct the collection of taxes
Because of the Anti-Injunction Act, taxes can ordinarily be
——————
2We appointed H. Bartow Farr III to brief and argue in support of the
Eleventh Circuit’s judgment with respect to severability, and Robert A
Long to brief and argue the proposition that the Anti-Injunction Act
Bars the current challenges to the individual mandate. 565 U. S. ___
(2011). Both amici have ably discharged their assigned responsibilities. Opinion of ROBERTS, C. J

Opinion of the Court
12 NATIONAL FEDERATION OF INDEPENDENT
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Opinion of the Court
Challenged only after they are paid, by suing for a refund
See Enochs v. Williams Packing & Nav. Co., 370 U. S. 1
7–8 (1962)
The penalty for not complying with the Affordable Care
Act’s individual mandate first becomes enforceable in
2014. The present challenge to the mandate thus seeks to
Restrain the penalty’s future collection. Amicus contends
That the Internal Revenue Code treats the penalty as a
Tax, and that the Anti-Injunction Act therefore bars this
Suit
The text of the pertinent statutes suggests otherwise
The Anti-Injunction Act applies to suits “for the purpose
Of restraining the assessment or collection of any tax.”
§7421(a) (emphasis added). Congress, however, chose to
Describe the “[s]hared responsibility payment” imposed on
Those who forgo health insurance not as a “tax,” but as a
“penalty.” §§5000A(b), (g)(2). There is no immediate
Reason to think that a statute applying to “any tax” would
Apply to a “penalty.”
Congress’s decision to label this exaction a “penalty”
Rather than a “tax” is significant because the Affordable
Care Act describes many other exactions it creates as
“taxes.” See Thomas More, 651 F. 3d, at 551. Where
Congress uses certain language in one part of a statute
And different language in another, it is generally presumed that Congress acts intentionally. See Russello v
United States, 464 U. S. 16, 23 (1983)
Amicus argues that even though Congress did not label
The shared responsibility payment a tax, we should treat it
As such under the Anti-Injunction Act because it functions
Like a tax. It is true that Congress cannot change whether
An exaction is a tax or a penalty for constitutional purposes simply by describing it as one or the other. Congress
May not, for example, expand its power under the Taxing
Clause, or escape the Double Jeopardy Clause’s constraint
On criminal sanctions, by labeling a severe financial pun-Cite as: 567 U. S. ____ (2012) 13
Opinion of ROBERTS, C. J
Ishment a “tax.” See Bailey v. Drexel Furniture Co., 259
U. S. 20, 36–37 (1922); Department of Revenue of Mont. v
Kurth Ranch, 511 U. S. 767, 779 (1994)
The Anti-Injunction Act and the Affordable Care Act
However, are creatures of Congress’s own creation. How
They relate to each other is up to Congress, and the best
Evidence of Congress’s intent is the statutory text. We
Have thus applied the Anti-Injunction Act to statutorily
Described “taxes” even where that label was inaccurate
See Bailey v. George, 259 U. S. 16 (1922) (Anti-Injunction
Act applies to “Child Labor Tax” struck down as exceeding
Congress’s taxing power in Drexel Furniture)
Congress can, of course, describe something as a penalty
But direct that it nonetheless be treated as a tax for purposes of the Anti-Injunction Act. For example, 26 U. S. C
§6671(a) provides that “any reference in this title to ‘tax’
Imposed by this title shall be deemed also to refer to the
Penalties and liabilities provided by” subchapter 68B of
The Internal Revenue Code. Penalties in subchapter 68B
Are thus treated as taxes under Title 26, which includes
The Anti-Injunction Act. The individual mandate, however, is not in subchapter 68B of the Code. Nor does any
Other provision state that references to taxes in Title 26
Shall also be “deemed” to apply to the individual mandate
Amicus attempts to show that Congress did render the
Anti-Injunction Act applicable to the individual mandate
Albeit by a more circuitous route. Section 5000A(g)(1) specifies that the penalty for not complying with the man-
Date “shall be assessed and collected in the same manner
As an assessable penalty under subchapter B of chapter
68.” Assessable penalties in subchapter 68B, in turn
“shall be assessed and collected in the same manner as
Taxes.” §6671(a). According to amicus, by directing that
The penalty be “assessed and collected in the same manner as taxes,” §5000A(g)(1) made the Anti-Injunction Act
Applicable to this penalty
Opinion of the Court Opinion of ROBERTS, C. J

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Opinion of the Court
The Government disagrees. It argues that §5000A(g)(1)
Does not direct courts to apply the Anti-Injunction Act
Because §5000A(g) is a directive only to the Secretary of
The Treasury to use the same “‘methodology and procedures’” to collect the penalty that he uses to collect taxes
Brief for United States 32–33 (quoting Seven-Sky, 661
F. 3d, at 11)
We think the Government has the better reading. As
It observes, “Assessment” and “Collection” are chapters of
The Internal Revenue Code providing the Secretary authority to assess and collect taxes, and generally specifying
The means by which he shall do so. See §6201 (assessment authority); §6301 (collection authority). Section
5000A(g)(1)’s command that the penalty be “assessed and
Collected in the same manner” as taxes is best read as
Referring to those chapters and giving the Secretary the
Same authority and guidance with respect to the penalty
That interpretation is consistent with the remainder of
§5000A(g), which instructs the Secretary on the tools he
May use to collect the penalty. See §5000A(g)(2)(A) (barring criminal prosecutions); §5000A(g)(2)(B) (prohibiting
The Secretary from using notices of lien and levies). The
Anti-Injunction Act, by contrast, says nothing about the
Procedures to be used in assessing and collecting taxes
Amicus argues in the alternative that a different section
Of the Internal Revenue Code requires courts to treat the
Penalty as a tax under the Anti-Injunction Act. Section
6201(a) authorizes the Secretary to make “assessments of
All taxes (including interest, additional amounts, additions
To the tax, and assessable penalties).” (Emphasis added.)
Amicus contends that the penalty must be a tax, because
It is an assessable penalty and §6201(a) says that taxes
Include assessable penalties
That argument has force only if §6201(a) is read in
Isolation. The Code contains many provisions treating
Taxes and assessable penalties as distinct terms. See, e.g.,
Cite as: 567 U. S. ____ (2012) 15
Opinion of ROBERTS, C. J
§§860(h)(1), 6324A(a), 6601(e)(1)–(2), 6602, 7122(b). There
Would, for example, be no need for §6671(a) to deem “tax”
To refer to certain assessable penalties if the Code already included all such penalties in the term “tax.” Indeed, amicus’s earlier observation that the Code requires
Assessable penalties to be assessed and collected “in the
Same manner as taxes” makes little sense if assessable
Penalties are themselves taxes. In light of the Code’s
Consistent distinction between the terms “tax” and “assessable penalty,” we must accept the Government’s interpretation: §6201(a) instructs the Secretary that his
Authority to assess taxes includes the authority to assess
Penalties, but it does not equate assessable penalties to
Taxes for other purposes
The Affordable Care Act does not require that the penalty for failing to comply with the individual mandate be
Treated as a tax for purposes of the Anti-Injunction Act
The Anti-Injunction Act therefore does not apply to this
Suit, and we may proceed to the merits
III
The Government advances two theories for the proposition that Congress had constitutional authority to enact
The individual mandate. First, the Government argues
That Congress had the power to enact the mandate under
The Commerce Clause. Under that theory, Congress may
Order individuals to buy health insurance because the
Failure to do so affects interstate commerce, and could undercut the Affordable Care Act’s other reforms. Second
The Government argues that if the commerce power does
Not support the mandate, we should nonetheless uphold it
As an exercise of Congress’s power to tax. According to the
Government, even if Congress lacks the power to direct
Individuals to buy insurance, the only effect of the individual mandate is to raise taxes on those who do not do so
And thus the law may be upheld as a tax. 16 NATIONAL FEDERATION OF INDEPENDENT
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Opinion of ROBERTS, C. J
A
The Government’s first argument is that the individual
Mandate is a valid exercise of Congress’s power under the
Commerce Clause and the Necessary and Proper Clause
According to the Government, the health care market is
Characterized by a significant cost-shifting problem. Everyone will eventually need health care at a time and to an
Extent they cannot predict, but if they do not have insurance, they often will not be able to pay for it. Because
State and federal laws nonetheless require hospitals to
Provide a certain degree of care to individuals without
Regard to their ability to pay, see, e.g., 42 U. S. C. §1395dd;
Fla. Stat. Ann. §395.1041, hospitals end up receiving
Compensation for only a portion of the services they provide. To recoup the losses, hospitals pass on the cost to
Insurers through higher rates, and insurers, in turn, pass
On the cost to policy holders in the form of higher premiums. Congress estimated that the cost of uncompensated care raises family health insurance premiums, on
Average, by over $1,000 per year. 42 U. S. C. §18091(2)(F)
In the Affordable Care Act, Congress addressed the
Problem of those who cannot obtain insurance coverage
Because of preexisting conditions or other health issues. It
Did so through the Act’s “guaranteed-issue” and “community-
Rating” provisions. These provisions together prohibit insurance companies from denying coverage to those with
Such conditions or charging unhealthy individuals higher
Premiums than healthy individuals. See §§300gg, 300gg–1
300gg–3, 300gg–4
The guaranteed-issue and community-rating reforms do
Not, however, address the issue of healthy individuals who
Choose not to purchase insurance to cover potential health
Care needs. In fact, the reforms sharply exacerbate that
Problem, by providing an incentive for individuals to delay
Purchasing health insurance until they become sick, relying on the promise of guaranteed and affordable coverage
Cite as: 567 U. S. ____ (2012) 17
Opinion of ROBERTS, C. J
The reforms also threaten to impose massive new costs on
Insurers, who are required to accept unhealthy individuals
But prohibited from charging them rates necessary to pay
For their coverage. This will lead insurers to significantly
Increase premiums on everyone. See Brief for America’s
Health Insurance Plans et al. as Amici Curiae in No. 11–
393 etc. 8–9
The individual mandate was Congress’s solution to
These problems. By requiring that individuals purchase
Health insurance, the mandate prevents cost-shifting by
Those who would otherwise go without it. In addition, the
Mandate forces into the insurance risk pool more healthy
Individuals, whose premiums on average will be higher
Than their health care expenses. This allows insurers to
Subsidize the costs of covering the unhealthy individuals
The reforms require them to accept. The Government
Claims that Congress has power under the Commerce and
Necessary and Proper Clauses to enact this solution
1
The Government contends that the individual mandate
Is within Congress’s power because the failure to purchase insurance “has a substantial and deleterious effect
On interstate commerce” by creating the cost-shifting problem. Brief for United States 34. The path of our Commerce Clause decisions has not always run smooth, see
United States v. Lopez, 514 U. S. 549, 552–559 (1995), but
It is now well established that Congress has broad authority under the Clause. We have recognized, for example
That “[t]he power of Congress over interstate commerce is
Not confined to the regulation of commerce among the
States,” but extends to activities that “have a substantial
Effect on interstate commerce.” United States v. Darby
312 U. S. 100, 118–119 (1941). Congress’s power, moreover, is not limited to regulation of an activity that by itself
Substantially affects interstate commerce, but also extends 18 NATIONAL FEDERATION OF INDEPENDENT
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Opinion of ROBERTS, C. J
To activities that do so only when aggregated with similar
Activities of others. See Wickard, 317 U. S., at 127–128
Given its expansive scope, it is no surprise that Congress has employed the commerce power in a wide variety
Of ways to address the pressing needs of the time. But
Congress has never attempted to rely on that power to
Compel individuals not engaged in commerce to purchase
An unwanted product.3
Legislative novelty is not necessarily fatal; there is a first time for everything. But
Sometimes “the most telling indication of [a] severe constitutional problem . . . is the lack of historical precedent”
For Congress’s action. Free Enterprise Fund v. Public Company Accounting Oversight Bd., 561 U. S. ___, ___ (2010)
(slip op., at 25) (internal quotation marks omitted). At the
Very least, we should “pause to consider the implications of
The Government’s arguments” when confronted with such
New conceptions of federal power. Lopez, supra, at 564
The Constitution grants Congress the power to “regulate
Commerce.” Art. I, §8, cl. 3 (emphasis added). The power
To regulate commerce presupposes the existence of commercial activity to be regulated. If the power to “regulate”
Something included the power to create it, many of the
Provisions in the Constitution would be superfluous. For
Example, the Constitution gives Congress the power to
“coin Money,” in addition to the power to “regulate the
Value thereof.” Id., cl. 5. And it gives Congress the power
——————
3
The examples of other congressional mandates cited by JUSTICE
GINSBURG, post, at 35, n. 10 (opinion concurring in part, concurring in
Judgment in part, and dissenting in part), are not to the contrary. Each
Of those mandates—to report for jury duty, to register for the draft, to
Purchase firearms in anticipation of militia service, to exchange gold
Currency for paper currency, and to file a tax return—are based on
Constitutional provisions other than the Commerce Clause. See Art. I
§8, cl. 9 (to “constitute Tribunals inferior to the supreme Court”); id.,
Cl. 12 (to “raise and support Armies”); id., cl. 16 (to “provide for organizing, arming, and disciplining, the Militia”); id., cl. 5 (to “coin Money”);
Id., cl. 1 (to “lay and collect Taxes”). Cite as: 567 U. S. ____ (2012) 19
Opinion of ROBERTS, C. J
To “raise and support Armies” and to “provide and maintain a Navy,” in addition to the power to “make Rules
For the Government and Regulation of the land and naval
Forces.” Id., cls. 12–14. If the power to regulate the
Armed forces or the value of money included the power to
Bring the subject of the regulation into existence, the
Specific grant of such powers would have been unnecessary. The language of the Constitution reflects the natural understanding that the power to regulate assumes
There is already something to be regulated. See Gibbons, 9
Wheat., at 188 (“[T]he enlightened patriots who framed
Our constitution, and the people who adopted it, must be
Understood to have employed words in their natural sense
And to have intended what they have said”).4
Our precedent also reflects this understanding. As
Expansive as our cases construing the scope of the commerce power have been, they all have one thing in common: They uniformly describe the power as reaching
“activity.” It is nearly impossible to avoid the word when
Quoting them. See, e.g., Lopez, supra, at 560 (“Where
Economic activity substantially affects interstate commerce, legislation regulating that activity will be sus-
——————
4
JUSTICE GINSBURG suggests that “at the time the Constitution was
Framed, to ‘regulate’ meant, among other things, to require action.”
Post, at 23 (citing Seven-Sky v. Holder, 661 F. 3d 1, 16 (CADC 2011);
Brackets and some internal quotation marks omitted). But to reach
This conclusion, the case cited by JUSTICE GINSBURG relied on a dictionary in which “[t]o order; to command” was the fifth-alternative definition of “to direct,” which was itself the second-alternative definition of
“to regulate.” See Seven-Sky, supra, at 16 (citing S. Johnson, Dictionary of the English Language (4th ed. 1773) (reprinted 1978)). It is
Unlikely that the Framers had such an obscure meaning in mind when
They used the word “regulate.” Far more commonly, “[t]o regulate”
Meant “[t]o adjust by rule or method,” which presupposes something to
Adjust. 2 Johnson, supra, at 1619; see also Gibbons, 9 Wheat., at 196
(defining the commerce power as the power “to prescribe the rule by
Which commerce is to be governed”)

20 NATIONAL FEDERATION OF INDEPENDENT
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Opinion of ROBERTS, C. J
Tained”); Perez, 402 U. S., at 154 (“Where the class of
Activities is regulated and that class is within the reach of
Federal power, the courts have no power to excise, as trivial, individual instances of the class” (emphasis in original;
Internal quotation marks omitted)); Wickard, supra, at
125 (“[E]ven if appellee’s activity be local and though it
May not be regarded as commerce, it may still, whatever
Its nature, be reached by Congress if it exerts a substantial economic effect on interstate commerce”); NLRB v
Jones & Laughlin Steel Corp., 301 U. S. 1, 37 (1937) (“Although activities may be intrastate in character when
Separately considered, if they have such a close and substantial relation to interstate commerce that their control
Is essential or appropriate to protect that commerce from
Burdens and obstructions, Congress cannot be denied the
Power to exercise that control”); see also post, at 15, 25–26
28, 32 (GINSBURG, J., concurring in part, concurring in
Judgment in part, and dissenting in part).5
The individual mandate, however, does not regulate
Existing commercial activity. It instead compels individuals to become active in commerce by purchasing a product
On the ground that their failure to do so affects interstate
Commerce. Construing the Commerce Clause to permit Congress to regulate individuals precisely because they are
Doing nothing would open a new and potentially vast domain to congressional authority. Every day individuals do
Not do an infinite number of things. In some cases they
——————
5
JUSTICE GINSBURG cites two eminent domain cases from the 1890s to
Support the proposition that our case law does not “toe the activity
Versus inactivity line.” Post, at 24–25 (citing Monongahela Nav. Co. v
United States, 148 U. S. 312, 335–337 (1893), and Cherokee Nation v
Southern Kansas R. Co., 135 U. S. 641, 657–659 (1890)). The fact that
The Fifth Amendment requires the payment of just compensation
When the Government exercises its power of eminent domain does not
Turn the taking into a commercial transaction between the landowner
And the Government, let alone a government-compelled transaction
Between the landowner and a third party
Cite as: 567 U. S. ____ (2012) 21
Opinion of ROBERTS, C. J
Decide not to do something; in others they simply fail to
Do it. Allowing Congress to justify federal regulation by
Pointing to the effect of inaction on commerce would bring
Countless decisions an individual could potentially make
Within the scope of federal regulation, and—under the
Government’s theory—empower Congress to make those
Decisions for him
Applying the Government’s logic to the familiar case of
Wickard v. Filburn shows how far that logic would carry
Us from the notion of a government of limited powers. In
Wickard, the Court famously upheld a federal penalty imposed on a farmer for growing wheat for consumption
On his own farm. 317 U. S., at 114–115, 128–129. That
Amount of wheat caused the farmer to exceed his quota
Under a program designed to support the price of wheat by
Limiting supply. The Court rejected the farmer’s argument
That growing wheat for home consumption was beyond the
Reach of the commerce power. It did so on the ground that
The farmer’s decision to grow wheat for his own use allowed him to avoid purchasing wheat in the market. That
Decision, when considered in the aggregate along with similar decisions of others, would have had a substantial effect on the interstate market for wheat. Id., at 127–129
Wickard has long been regarded as “perhaps the most
Far reaching example of Commerce Clause authority over
Intrastate activity,” Lopez, 514 U. S., at 560, but the Government’s theory in this case would go much further
Under Wickard it is within Congress’s power to regulate
The market for wheat by supporting its price. But price
Can be supported by increasing demand as well as by
Decreasing supply. The aggregated decisions of some
Consumers not to purchase wheat have a substantial effect
On the price of wheat, just as decisions not to purchase
Health insurance have on the price of insurance. Congress
Can therefore command that those not buying wheat do so
Just as it argues here that it may command that those not
22 NATIONAL FEDERATION OF INDEPENDENT
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Opinion of ROBERTS, C. J
Buying health insurance do so. The farmer in Wickard
Was at least actively engaged in the production of wheat
And the Government could regulate that activity because
Of its effect on commerce. The Government’s theory here
Would effectively override that limitation, by establishing
That individuals may be regulated under the Commerce
Clause whenever enough of them are not doing something
The Government would have them do
Indeed, the Government’s logic would justify a mandatory purchase to solve almost any problem. See Seven-Sky
661 F. 3d, at 14–15 (noting the Government’s inability
To “identify any mandate to purchase a product or ser-
Vice in interstate commerce that would be unconstitutional” under its theory of the commerce power). To
Consider a different example in the health care market, many
Americans do not eat a balanced diet. That group makes
Up a larger percentage of the total population than those
Without health insurance. See, e.g., Dept. of Agriculture
And Dept. of Health and Human Services, Dietary Guidelines for Americans 1 (2010). The failure of that group
To have a healthy diet increases health care costs, to a
Greater extent than the failure of the uninsured to purchase insurance. See, e.g., Finkelstein, Trogdon, Cohen, &
Dietz, Annual Medical Spending Attributable to Obesity:
Payer- and Service-Specific Estimates, 28 Health Affairs
W822 (2009) (detailing the “undeniable link between rising rates of obesity and rising medical spending,” and estimating that “the annual medical burden of obesity has
Risen to almost 10 percent of all medical spending and
Could amount to $147 billion per year in 2008”). Those increased costs are borne in part by other Americans who
Must pay more, just as the uninsured shift costs to the
Insured. See Center for Applied Ethics, Voluntary Health
Risks: Who Should Pay?, 6 Issues in Ethics 6 (1993) (noting “overwhelming evidence that individuals with unhealthy habits pay only a fraction of the costs associated Cite as: 567 U. S. ____ (2012) 23
Opinion of ROBERTS, C. J
With their behaviors; most of the expense is borne by the
Rest of society in the form of higher insurance premiums
Government expenditures for health care, and disability
Benefits”). Congress addressed the insurance problem by
Ordering everyone to buy insurance. Under the Government’s theory, Congress could address the diet problem
By ordering everyone to buy vegetables. See Dietary
Guidelines, supra, at 19 (“Improved nutrition, appropriate
Eating behaviors, and increased physical activity have tremendous potential to . . . reduce health care costs”)
People, for reasons of their own, often fail to do things
That would be good for them or good for society. Those
Failures—joined with the similar failures of others—can
Readily have a substantial effect on interstate commerce
Under the Government’s logic, that authorizes Congress to
Use its commerce power to compel citizens to act as the
Government would have them act
That is not the country the Framers of our Constitution
Envisioned. James Madison explained that the Commerce
Clause was “an addition which few oppose and from which
No apprehensions are entertained.” The Federalist No. 45
At 293. While Congress’s authority under the Commerce
Clause has of course expanded with the growth of the
National economy, our cases have “always recognized that
The power to regulate commerce, though broad indeed, has
Limits.” Maryland v. Wirtz, 392 U. S. 183, 196 (1968). The
Government’s theory would erode those limits, permitting
Congress to reach beyond the natural extent of its authority, “everywhere extending the sphere of its activity and
Drawing all power into its impetuous vortex.” The Federalist No. 48, at 309 (J. Madison). Congress already enjoys
Vast power to regulate much of what we do. Accepting
The Government’s theory would give Congress the same
License to regulate what we do not do, fundamentally
Changing the relation between the citizen and the Federal
24 NATIONAL FEDERATION OF INDEPENDENT
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Opinion of ROBERTS, C. J
Government.6
To an economist, perhaps, there is no difference between
Activity and inactivity; both have measurable economic
Effects on commerce. But the distinction between doing
Something and doing nothing would not have been lost on
The Framers, who were “practical statesmen,” not metaphysical philosophers. Industrial Union Dept., AFL–CIO
V. American Petroleum Institute, 448 U. S. 607, 673 (1980)
(Rehnquist, J., concurring in judgment). As we have explained, “the framers of the Constitution were not mere
Visionaries, toying with speculations or theories, but
Practical men, dealing with the facts of political life as
They understood them, putting into form the government
They were creating, and prescribing in language clear
And intelligible the powers that government was to take.”
South Carolina v. United States, 199 U. S. 437, 449 (1905)
The Framers gave Congress the power to regulate commerce, not to compel it, and for over 200 years both our
Decisions and Congress’s actions have reflected this understanding. There is no reason to depart from that understanding now
The Government sees things differently. It argues that
Because sickness and injury are unpredictable but unavoidable, “the uninsured as a class are active in the market for health care, which they regularly seek and obtain.”
Brief for United States 50. The individual mandate
“merely regulates how individuals finance and pay for that
——————
6
In an attempt to recast the individual mandate as a regulation of
Commercial activity, JUSTICE GINSBURG suggests that “[a]n individual
Who opts not to purchase insurance from a private insurer can be seen
As actively selecting another form of insurance: self-insurance.” Post, at
26. But “self-insurance” is, in this context, nothing more than a description of the failure to purchase insurance. Individuals are no more
“activ[e] in the self-insurance market” when they fail to purchase
Insurance, ibid., than they are active in the “rest” market when doing
Nothing

Cite as: 567 U. S. ____ (2012) 25
Opinion of ROBERTS, C. J
Active participation—requiring that they do so through
Insurance, rather than through attempted self-insurance
With the back-stop of shifting costs to others.” Ibid
The Government repeats the phrase “active in the market for health care” throughout its brief, see id., at 7, 18
34, 50, but that concept has no constitutional significance
An individual who bought a car two years ago and may
Buy another in the future is not “active in the car market”
In any pertinent sense. The phrase “active in the market”
Cannot obscure the fact that most of those regulated by
The individual mandate are not currently engaged in any
Commercial activity involving health care, and that fact is
Fatal to the Government’s effort to “regulate the uninsured
As a class.” Id., at 42. Our precedents recognize Congress’s power to regulate “class[es] of activities,” Gonzales
V. Raich, 545 U. S. 1, 17 (2005) (emphasis added), not
Classes of individuals, apart from any activity in which
They are engaged, see, e.g., Perez, 402 U. S., at 153 (“Petitioner is clearly a member of the class which engages in
‘extortionate credit transactions’ . . .” (emphasis deleted))
The individual mandate’s regulation of the uninsured as
A class is, in fact, particularly divorced from any link to
Existing commercial activity. The mandate primarily
Affects healthy, often young adults who are less likely to
Need significant health care and have other priorities for
Spending their money. It is precisely because these individuals, as an actuarial class, incur relatively low health
Care costs that the mandate helps counter the effect of
Forcing insurance companies to cover others who impose
Greater costs than their premiums are allowed to reflect
See 42 U. S. C. §18091(2)(I) (recognizing that the mandate
Would “broaden the health insurance risk pool to include
Healthy individuals, which will lower health insurance
Premiums”). If the individual mandate is targeted at a
Class, it is a class whose commercial inactivity rather than
Activity is its defining feature. 26 NATIONAL FEDERATION OF INDEPENDENT
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The Government, however, claims that this does not
Matter. The Government regards it as sufficient to trigger
Congress’s authority that almost all those who are uninsured will, at some unknown point in the future, engage
In a health care transaction. Asserting that “[t]here is no
Temporal limitation in the Commerce Clause,” the Government argues that because “[e]veryone subject to this
Regulation is in or will be in the health care market,” they
Can be “regulated in advance.” Tr. of Oral Arg. 109 (Mar
27, 2012)
The proposition that Congress may dictate the conduct
Of an individual today because of prophesied future activity finds no support in our precedent. We have said that
Congress can anticipate the effects on commerce of an economic activity. See, e.g., Consolidated Edison Co. v. NLRB
305 U. S. 197 (1938) (regulating the labor practices of
Utility companies); Heart of Atlanta Motel, Inc. v. United
States, 379 U. S. 241 (1964) (prohibiting discrimination by
Hotel operators); Katzenbach v. McClung, 379 U. S. 294
(1964) (prohibiting discrimination by restaurant owners)
But we have never permitted Congress to anticipate that
Activity itself in order to regulate individuals not currently
Engaged in commerce. Each one of our cases, including
Those cited by JUSTICE GINSBURG, post, at 20–21, involved
Preexisting economic activity. See, e.g., Wickard, 317
U. S., at 127–129 (producing wheat); Raich, supra, at 25
(growing marijuana)
Everyone will likely participate in the markets for food
Clothing, transportation, shelter, or energy; that does not
Authorize Congress to direct them to purchase particular
Products in those or other markets today. The Commerce
Clause is not a general license to regulate an individual
From cradle to grave, simply because he will predictably
Engage in particular transactions. Any police power to
Regulate individuals as such, as opposed to their activities
Remains vested in the States
Cite as: 567 U. S. ____ (2012) 27
Opinion of ROBERTS, C. J
The Government argues that the individual mandate
Can be sustained as a sort of exception to this rule, because
Health insurance is a unique product. According to the
Government, upholding the individual mandate would
Not justify mandatory purchases of items such as cars or
Broccoli because, as the Government puts it, “[h]ealth insurance is not purchased for its own sake like a car or
Broccoli; it is a means of financing health-care consumption and covering universal risks.” Reply Brief for United
States 19. But cars and broccoli are no more purchased
For their “own sake” than health insurance. They are
Purchased to cover the need for transportation and food
The Government says that health insurance and health
Care financing are “inherently integrated.” Brief for United
States 41. But that does not mean the compelled purchase
Of the first is properly regarded as a regulation of the
Second. No matter how “inherently integrated” health
Insurance and health care consumption may be, they are
Not the same thing: They involve different transactions
Entered into at different times, with different providers
And for most of those targeted by the mandate, significant
Health care needs will be years, or even decades, away
The proximity and degree of connection between the
Mandate and the subsequent commercial activity is too lacking to justify an exception of the sort urged by the Government. The individual mandate forces individuals
Into commerce precisely because they elected to refrain
From commercial activity. Such a law cannot be sus-
Tained under a clause authorizing Congress to “regulate
Commerce.”
2
The Government next contends that Congress has the
Power under the Necessary and Proper Clause to enact the
Individual mandate because the mandate is an “integral
Part of a comprehensive scheme of economic regulation”—
28 NATIONAL FEDERATION OF INDEPENDENT
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The guaranteed-issue and community-rating insurance
Reforms. Brief for United States 24. Under this argument, it is not necessary to consider the effect that an
Individual’s inactivity may have on interstate commerce; it
Is enough that Congress regulate commercial activity in a
Way that requires regulation of inactivity to be effective
The power to “make all Laws which shall be necessary
And proper for carrying into Execution” the powers enumerated in the Constitution, Art. I, §8, cl. 18, vests Congress with authority to enact provisions “incidental to the
[Enumerated] power, and conducive to its beneficial exercise,” McCulloch, 4 Wheat., at 418. Although the Clause
Gives Congress authority to “legislate on that vast mass
Of incidental powers which must be involved in the constitution,” it does not license the exercise of any “great
Substantive and independent power[s]” beyond those specifically enumerated. Id., at 411, 421. Instead, the Clause is
“‘merely a declaration, for the removal of all uncertainty
That the means of carrying into execution those [powers]
Otherwise granted are included in the grant.’” Kinsella v
United States ex rel. Singleton, 361 U. S. 234, 247 (1960)
(quoting VI Writings of James Madison 383 (G. Hunt ed
1906))
As our jurisprudence under the Necessary and Proper
Clause has developed, we have been very deferential to
Congress’s determination that a regulation is “necessary.”
We have thus upheld laws that are “‘convenient, or useful’ or ‘conducive’ to the authority’s ‘beneficial exercise.’”
Comstock, 560 U. S., at ___ (slip op., at 5) (quoting McCulloch, supra, at 413, 418). But we have also carried out our
Responsibility to declare unconstitutional those laws that
Undermine the structure of government established by the
Constitution. Such laws, which are not “consist[ent] with
The letter and spirit of the constitution,” McCulloch, supra
At 421, are not “proper [means] for carrying into Execution” Congress’s enumerated powers. Rather, they are, “in Cite as: 567 U. S. ____ (2012) 29
Opinion of ROBERTS, C. J
The words of The Federalist, ‘merely acts of usurpation’
Which ‘deserve to be treated as such.’” Printz v. United
States, 521 U. S. 898, 924 (1997) (alterations omitted)
(quoting The Federalist No. 33, at 204 (A. Hamilton)); see
Also New York, 505 U. S., at 177; Comstock, supra, at ___
(slip op., at 5) (KENNEDY, J., concurring in judgment) (“It
Is of fundamental importance to consider whether essential attributes of state sovereignty are compromised by the
Assertion of federal power under the Necessary and Proper
Clause . . .”)
Applying these principles, the individual mandate cannot be sustained under the Necessary and Proper Clause
As an essential component of the insurance reforms. Each
Of our prior cases upholding laws under that Clause involved exercises of authority derivative of, and in service
To, a granted power. For example, we have upheld provisions permitting continued confinement of those already
In federal custody when they could not be safely released
Comstock, supra, at ___ (slip op., at 1–2); criminalizing bribes involving organizations receiving federal funds
Sabri v. United States, 541 U. S. 600, 602, 605 (2004); and
Tolling state statutes of limitations while cases are pending in federal court, Jinks v. Richland County, 538
U. S. 456, 459, 462 (2003). The individual mandate, by contrast, vests Congress with the extraordinary ability to
Create the necessary predicate to the exercise of an enumerated power
This is in no way an authority that is “narrow in scope,”
Comstock, supra, at ___ (slip op., at 20), or “incidental” to
The exercise of the commerce power, McCulloch, supra, at
418. Rather, such a conception of the Necessary and
Proper Clause would work a substantial expansion of
Federal authority. No longer would Congress be limited to
Regulating under the Commerce Clause those who by some
Preexisting activity bring themselves within the sphere of
Federal regulation. Instead, Congress could reach beyond
30 NATIONAL FEDERATION OF INDEPENDENT
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The natural limit of its authority and draw within its
Regulatory scope those who otherwise would be outside of
It. Even if the individual mandate is “necessary” to the
Act’s insurance reforms, such an expansion of federal
Power is not a “proper” means for making those reforms
Effective
The Government relies primarily on our decision in
Gonzales v. Raich. In Raich, we considered “comprehensive legislation to regulate the interstate market” in marijuana. 545 U. S., at 22. Certain individuals sought an
Exemption from that regulation on the ground that they
Engaged in only intrastate possession and consumption
We denied any exemption, on the ground that marijuana
Is a fungible commodity, so that any marijuana could
Be readily diverted into the interstate market. Congress’s
Attempt to regulate the interstate market for marijuana
Would therefore have been substantially undercut if it
Could not also regulate intrastate possession and consumption. Id., at 19. Accordingly, we recognized that
“Congress was acting well within its authority” under the
Necessary and Proper Clause even though its “regulation
Ensnare[d] some purely intrastate activity.” Id., at 22; see
Also Perez, 402 U. S., at 154. Raich thus did not involve
The exercise of any “great substantive and independent
Power,” McCulloch, supra, at 411, of the sort at issue here
Instead, it concerned only the constitutionality of “individual applications of a concededly valid statutory
Scheme.” Raich, supra, at 23 (emphasis added)
Just as the individual mandate cannot be sustained as
A law regulating the substantial effects of the failure to
Purchase health insurance, neither can it be upheld as
A “necessary and proper” component of the insurance reforms. The commerce power thus does not authorize the
Mandate. Accord, post, at 4–16 (joint opinion of SCALIA
KENNEDY, THOMAS, and ALITO, JJ., dissenting)
Cite as: 567 U. S. ____ (2012) 31
Opinion of ROBERTS, C. J
B
That is not the end of the matter. Because the Commerce Clause does not support the individual mandate, it
Is necessary to turn to the Government’s second argument:
That the mandate may be upheld as within Congress’s
Enumerated power to “lay and collect Taxes.” Art. I, §8
Cl. 1
The Government’s tax power argument asks us to view
The statute differently than we did in considering its commerce power theory. In making its Commerce Clause
Argument, the Government defended the mandate as a
Regulation requiring individuals to purchase health insurance. The Government does not claim that the taxing
Power allows Congress to issue such a command. Instead
The Government asks us to read the mandate not as ordering individuals to buy insurance, but rather as imposing a
Tax on those who do not buy that product
The text of a statute can sometimes have more than one
Possible meaning. To take a familiar example, a law that
Reads “no vehicles in the park” might, or might not, ban
Bicycles in the park. And it is well established that if
A statute has two possible meanings, one of which violates
The Constitution, courts should adopt the meaning that
Does not do so. Justice Story said that 180 years ago: “No
Court ought, unless the terms of an act rendered it unavoidable, to give a construction to it which should involve
A violation, however unintentional, of the constitution.”
Parsons v. Bedford, 3 Pet. 433, 448–449 (1830). Justice
Holmes made the same point a century later: “[T]he rule is
Settled that as between two possible interpretations of a
Statute, by one of which it would be unconstitutional and
By the other valid, our plain duty is to adopt that which
Will save the Act.” Blodgett v. Holden, 275 U. S. 142, 148
(1927) (concurring opinion)
The most straightforward reading of the mandate is
That it commands individuals to purchase insurance
32 NATIONAL FEDERATION OF INDEPENDENT
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After all, it states that individuals “shall” maintain health
Insurance. 26 U. S. C. §5000A(a). Congress thought it
Could enact such a command under the Commerce Clause
And the Government primarily defended the law on that
Basis. But, for the reasons explained above, the Commerce Clause does not give Congress that power. Under
Our precedent, it is therefore necessary to ask whether the
Government’s alternative reading of the statute—that it
Only imposes a tax on those without insurance—is a reasonable one
Under the mandate, if an individual does not maintain
Health insurance, the only consequence is that he must
Make an additional payment to the IRS when he pays his
Taxes. See §5000A(b). That, according to the Government
Means the mandate can be regarded as establishing a
Condition—not owning health insurance—that triggers a
Tax—the required payment to the IRS. Under that theory
The mandate is not a legal command to buy insurance
Rather, it makes going without insurance just another
Thing the Government taxes, like buying gasoline or earning income. And if the mandate is in effect just a tax hike
On certain taxpayers who do not have health insurance, it
May be within Congress’s constitutional power to tax
The question is not whether that is the most natural
Interpretation of the mandate, but only whether it is a
“fairly possible” one. Crowell v. Benson, 285 U. S. 22, 62
(1932). As we have explained, “every reasonable construction must be resorted to, in order to save a statute from
Unconstitutionality.” Hooper v. California, 155 U. S. 648
657 (1895). The Government asks us to interpret the
Mandate as imposing a tax, if it would otherwise violate
The Constitution. Granting the Act the full measure of
Deference owed to federal statutes, it can be so read, for
The reasons set forth below. Opinion of ROBERTS, C. J
Cite as: 567 U. S. ____ (2012) 33
Opinion of the Court
C
The exaction the Affordable Care Act imposes on those
Without health insurance looks like a tax in many respects. The “[s]hared responsibility payment,” as the
Statute entitles it, is paid into the Treasury by “taxpayer[s]” when they file their tax returns. 26 U. S. C
§5000A(b). It does not apply to individuals who do not
Pay federal income taxes because their household income
Is less than the filing threshold in the Internal Revenue
Code. §5000A(e)(2). For taxpayers who do owe the payment, its amount is determined by such familiar factors as
Taxable income, number of dependents, and joint filing
Status. §§5000A(b)(3), (c)(2), (c)(4). The requirement to
Pay is found in the Internal Revenue Code and enforced by
The IRS, which—as we previously explained—must assess
And collect it “in the same manner as taxes.” Supra, at
13–14. This process yields the essential feature of any tax:
It produces at least some revenue for the Government
United States v. Kahriger, 345 U. S. 22, 28, n. 4 (1953)
Indeed, the payment is expected to raise about $4 billion
Per year by 2017. Congressional Budget Office, Payments
Of Penalties for Being Uninsured Under the Patient Protection and Affordable Care Act (Apr. 30, 2010), in Selected
CBO Publications Related to Health Care Legislation
2009–2010, p. 71 (rev. 2010)
It is of course true that the Act describes the payment as
A “penalty,” not a “tax.” But while that label is fatal to the
Application of the Anti-Injunction Act, supra, at 12–13, it
Does not determine whether the payment may be viewed
As an exercise of Congress’s taxing power. It is up to Congress whether to apply the Anti-Injunction Act to any
Particular statute, so it makes sense to be guided by Congress’s choice of label on that question. That choice does
Not, however, control whether an exaction is within Congress’s constitutional power to tax
Our precedent reflects this: In 1922, we decided two Opinion of ROBERTS, C. J

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Opinion of the Court
Challenges to the “Child Labor Tax” on the same day. In
The first, we held that a suit to enjoin collection of the socalled tax was barred by the Anti-Injunction Act. George
259 U. S., at 20. Congress knew that suits to obstruct
Taxes had to await payment under the Anti-Injunction
Act; Congress called the child labor tax a tax; Congress
Therefore intended the Anti-Injunction Act to apply. In
The second case, however, we held that the same exaction
Although labeled a tax, was not in fact authorized by Congress’s taxing power. Drexel Furniture, 259 U. S., at 38
That constitutional question was not controlled by Congress’s choice of label
We have similarly held that exactions not labeled taxes
Nonetheless were authorized by Congress’s power to tax
In the License Tax Cases, for example, we held that federal
Licenses to sell liquor and lottery tickets—for which the
Licensee had to pay a fee—could be sustained as exercises
Of the taxing power. 5 Wall., at 471. And in New York v
United States we upheld as a tax a “surcharge” on out-ofstate nuclear waste shipments, a portion of which was
Paid to the Federal Treasury. 505 U. S., at 171. We thus
Ask whether the shared responsibility payment falls
Within Congress’s taxing power, “[d]isregarding the designation of the exaction, and viewing its substance and application.” United States v. Constantine, 296 U. S. 287, 294
(1935); cf. Quill Corp. v. North Dakota, 504 U. S. 298, 310
(1992) (“[M]agic words or labels” should not “disable an
Otherwise constitutional levy” (internal quotation marks
Omitted)); Nelson v. Sears, Roebuck & Co., 312 U. S. 359
363 (1941) (“In passing on the constitutionality of a tax
Law, we are concerned only with its practical operation
Not its definition or the precise form of descriptive words
Which may be applied to it” (internal quotation marks
Omitted)); United States v. Sotelo, 436 U. S. 268, 275
(1978) (“That the funds due are referred to as a ‘penalty’ Opinion of ROBERTS, C. J
Cite as: 567 U. S. ____ (2012) 35
Opinion of the Court
. . . does not alter their essential character as taxes”).7
Our cases confirm this functional approach. For example, in Drexel Furniture, we focused on three practical
Characteristics of the so-called tax on employing child
Laborers that convinced us the “tax” was actually a penalty. First, the tax imposed an exceedingly heavy burden—10 percent of a company’s net income—on those who
Employed children, no matter how small their infraction
Second, it imposed that exaction only on those who knowingly employed underage laborers. Such scienter requirements are typical of punitive statutes, because Congress
Often wishes to punish only those who intentionally break
The law. Third, this “tax” was enforced in part by the
Department of Labor, an agency responsible for punishing violations of labor laws, not collecting revenue. 259
U. S., at 36–37; see also, e.g., Kurth Ranch, 511 U. S., at
780–782 (considering, inter alia, the amount of the exaction, and the fact that it was imposed for violation of a
Separate criminal law); Constantine, supra, at 295 (same)
The same analysis here suggests that the shared responsibility payment may for constitutional purposes be
Considered a tax, not a penalty: First, for most Americans
The amount due will be far less than the price of insurance, and, by statute, it can never be more.8
It may often
——————
7
Sotelo, in particular, would seem to refute the joint dissent’s contention that we have “never” treated an exaction as a tax if it was denominated a penalty. Post, at 20. We are not persuaded by the dissent’s
Attempt to distinguish Sotelo as a statutory construction case from the
Bankruptcy context. Post, at 17, n. 5. The dissent itself treats the
Question here as one of statutory interpretation, and indeed also relies
On a statutory interpretation case from the bankruptcy context. Post
At 23 (citing United States v. Reorganized CF&I Fabricators of Utah
Inc., 518 U. S. 213, 224 (1996))
8
In 2016, for example, individuals making $35,000 a year are expected to owe the IRS about $60 for any month in which they do not
Have health insurance. Someone with an annual income of $100,000 a
Year would likely owe about $200. The price of a qualifying insurance Opinion of ROBERTS, C. J

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Be a reasonable financial decision to make the payment
Rather than purchase insurance, unlike the “prohibitory”
Financial punishment in Drexel Furniture. 259 U. S., at
37. Second, the individual mandate contains no scienter
Requirement. Third, the payment is collected solely by the
IRS through the normal means of taxation—except that
The Service is not allowed to use those means most suggestive of a punitive sanction, such as criminal prosecution
See §5000A(g)(2). The reasons the Court in Drexel Furniture held that what was called a “tax” there was a penalty
Support the conclusion that what is called a “penalty” here
May be viewed as a tax.9
None of this is to say that the payment is not intended
To affect individual conduct. Although the payment will
Raise considerable revenue, it is plainly designed to expand health insurance coverage. But taxes that seek to
Influence conduct are nothing new. Some of our earliest
Federal taxes sought to deter the purchase of imported
Manufactured goods in order to foster the growth of domestic industry. See W. Brownlee, Federal Taxation in
America 22 (2d ed. 2004); cf. 2 J. Story, Commentaries on
The Constitution of the United States §962, p. 434 (1833)
(“the taxing power is often, very often, applied for other
Purposes, than revenue”). Today, federal and state taxes
Can compose more than half the retail price of cigarettes
——————
Policy is projected to be around $400 per month. See D. Newman, CRS
Report for Congress, Individual Mandate and Related Information Requirements Under PPACA 7, and n. 25 (2011)
9We do not suggest that any exaction lacking a scienter requirement
And enforced by the IRS is within the taxing power. See post, at 23–24
(joint opinion of SCALIA, KENNEDY, THOMAS, and ALITO, JJ., dissenting)
Congress could not, for example, expand its authority to impose criminal fines by creating strict liability offenses enforced by the IRS rather
Than the FBI. But the fact the exaction here is paid like a tax, to the
Agency that collects taxes—rather than, for example, exacted by Department of Labor inspectors after ferreting out willful malfeasance—
Suggests that this exaction may be viewed as a tax. Opinion of ROBERTS, C. J

Cite as: 567 U. S. ____ (2012) 37
Opinion of the Court
Not just to raise more money, but to encourage people to
Quit smoking. And we have upheld such obviously regulatory measures as taxes on selling marijuana and sawed-off
Shotguns. See United States v. Sanchez, 340 U. S. 42, 44–
45 (1950); Sonzinsky v. United States, 300 U. S. 506, 513
(1937). Indeed, “[e]very tax is in some measure regulatory. To some extent it interposes an economic impediment
To the activity taxed as compared with others not taxed.”
Sonzinsky, supra, at 513. That §5000A seeks to shape
Decisions about whether to buy health insurance does not
Mean that it cannot be a valid exercise of the taxing
Power
In distinguishing penalties from taxes, this Court has
Explained that “if the concept of penalty means anything
It means punishment for an unlawful act or omission.”
United States v. Reorganized CF&I Fabricators of Utah
Inc., 518 U. S. 213, 224 (1996); see also United States v. La
Franca, 282 U. S. 568, 572 (1931) (“[A] penalty, as the
Word is here used, is an exaction imposed by statute as
Punishment for an unlawful act”). While the individual
Mandate clearly aims to induce the purchase of health
Insurance, it need not be read to declare that failing to do
So is unlawful. Neither the Act nor any other law attaches
Negative legal consequences to not buying health insurance, beyond requiring a payment to the IRS. The Government agrees with that reading, confirming that if
Someone chooses to pay rather than obtain health insurance, they have fully complied with the law. Brief for
United States 60–61; Tr. of Oral Arg. 49–50 (Mar. 26
2012)
Indeed, it is estimated that four million people each year
Will choose to pay the IRS rather than buy insurance. See
Congressional Budget Office, supra, at 71. We would
Expect Congress to be troubled by that prospect if such
Conduct were unlawful. That Congress apparently regards
Such extensive failure to comply with the mandate as Opinion of ROBERTS, C. J
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Tolerable suggests that Congress did not think it was
Creating four million outlaws. It suggests instead that the
Shared responsibility payment merely imposes a tax citizens may lawfully choose to pay in lieu of buying health
Insurance
The plaintiffs contend that Congress’s choice of language—stating that individuals “shall” obtain insurance
Or pay a “penalty”—requires reading §5000A as punishing
Unlawful conduct, even if that interpretation would render the law unconstitutional. We have rejected a similar
Argument before. In New York v. United States we examined a statute providing that “‘[e]ach State shall be responsible for providing . . . for the disposal of . . . low-level
Radioactive waste.’” 505 U. S., at 169 (quoting 42 U. S. C
§2021c(a)(1)(A)). A State that shipped its waste to another
State was exposed to surcharges by the receiving State
A portion of which would be paid over to the Federal
Government. And a State that did not adhere to the
Statutory scheme faced “[p]enalties for failure to comply,”
Including increases in the surcharge. §2021e(e)(2); New
York, 505 U. S., at 152–153. New York urged us to read
The statute as a federal command that the state legislature enact legislation to dispose of its waste, which would
Have violated the Constitution. To avoid that outcome, we
Interpreted the statute to impose only “a series of incentives” for the State to take responsibility for its waste. We
Then sustained the charge paid to the Federal Government
As an exercise of the taxing power. Id., at 169–174. We
See no insurmountable obstacle to a similar approach
Here.10
——————
10
The joint dissent attempts to distinguish New York v. United States
On the ground that the seemingly imperative language in that case was
In an “introductory provision” that had “no legal consequences.” Post
At 19. We did not rely on that reasoning in New York. See 505 U. S., at
169–170. Nor could we have. While the Court quoted only the broad
Statement that “[e]ach State shall be responsible” for its waste, that Opinion of ROBERTS, C. J

Cite as: 567 U. S. ____ (2012) 39
Opinion of the Court
The joint dissenters argue that we cannot uphold
§5000A as a tax because Congress did not “frame” it as
Such. Post, at 17. In effect, they contend that even if
The Constitution permits Congress to do exactly what we
Interpret this statute to do, the law must be struck down
Because Congress used the wrong labels. An example may
Help illustrate why labels should not control here. Suppose Congress enacted a statute providing that every
Taxpayer who owns a house without energy efficient windows must pay $50 to the IRS. The amount due is adjusted
Based on factors such as taxable income and joint filing
Status, and is paid along with the taxpayer’s income tax
Return. Those whose income is below the filing threshold
Need not pay. The required payment is not called a “tax,”
A “penalty,” or anything else. No one would doubt that
This law imposed a tax, and was within Congress’s power
To tax. That conclusion should not change simply because
Congress used the word “penalty” to describe the payment. Interpreting such a law to be a tax would hardly
“[i]mpos[e] a tax through judicial legislation.” Post, at 25
Rather, it would give practical effect to the Legislature’s
Enactment
Our precedent demonstrates that Congress had the
Power to impose the exaction in §5000A under the taxing
Power, and that §5000A need not be read to do more than
Impose a tax. That is sufficient to sustain it. The “question of the constitutionality of action taken by Congress
Does not depend on recitals of the power which it undertakes to exercise.” Woods v. Cloyd W. Miller Co., 333 U. S
——————
Language was implemented through operative provisions that also use
The words on which the dissent relies. See 42 U. S. C. §2021e(e)(1)
(entitled “Requirements for non-sited compact regions and non-member
States” and directing that those entities “shall comply with the following requirements”); §2021e(e)(2) (describing “Penalties for failure to
Comply”). The Court upheld those provisions not as lawful commands
But as “incentives.” See 505 U. S., at 152–153, 171–173. Opinion of ROBERTS, C. J

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138, 144 (1948)
Even if the taxing power enables Congress to impose
A tax on not obtaining health insurance, any tax must
Still comply with other requirements in the Constitution
Plaintiffs argue that the shared responsibility payment
Does not do so, citing Article I, §9, clause 4. That clause
Provides: “No Capitation, or other direct, Tax shall be laid
Unless in Proportion to the Census or Enumeration herein
Before directed to be taken.” This requirement means that
Any “direct Tax” must be apportioned so that each State
Pays in proportion to its population. According to the
Plaintiffs, if the individual mandate imposes a tax, it is a
Direct tax, and it is unconstitutional because Congress
Made no effort to apportion it among the States
Even when the Direct Tax Clause was written it was
Unclear what else, other than a capitation (also known as
A “head tax” or a “poll tax”), might be a direct tax. See
Springer v. United States, 102 U. S. 586, 596–598 (1881)
Soon after the framing, Congress passed a tax on ownership of carriages, over James Madison’s objection that it
Was an unapportioned direct tax. Id., at 597. This Court
Upheld the tax, in part reasoning that apportioning such
A tax would make little sense, because it would have required taxing carriage owners at dramatically different
Rates depending on how many carriages were in their
Home State. See Hylton v. United States, 3 Dall. 171, 174
(1796) (opinion of Chase, J.). The Court was unanimous
And those Justices who wrote opinions either directly
Asserted or strongly suggested that only two forms of
Taxation were direct: capitations and land taxes. See id.,
At 175; id., at 177 (opinion of Paterson, J.); id., at 183
(opinion of Iredell, J.)
That narrow view of what a direct tax might be persisted for a century. In 1880, for example, we explained that
“direct taxes, within the meaning of the Constitution, are
Only capitation taxes, as expressed in that instrument, Opinion of ROBERTS, C. J
Cite as: 567 U. S. ____ (2012) 41
Opinion of the Court
And taxes on real estate.” Springer, supra, at 602. In
1895, we expanded our interpretation to include taxes on
Personal property and income from personal property, in
The course of striking down aspects of the federal income
Tax. Pollock v. Farmers’ Loan & Trust Co., 158 U. S. 601
618 (1895). That result was overturned by the Sixteenth
Amendment, although we continued to consider taxes on
Personal property to be direct taxes. See Eisner v. Macomber, 252 U. S. 189, 218–219 (1920)
A tax on going without health insurance does not fall
Within any recognized category of direct tax. It is not a
Capitation. Capitations are taxes paid by every person
“without regard to property, profession, or any other circumstance.” Hylton, supra, at 175 (opinion of Chase, J.)
(emphasis altered). The whole point of the shared responsibility payment is that it is triggered by specific circumstances—earning a certain amount of income but not
Obtaining health insurance. The payment is also plainly
Not a tax on the ownership of land or personal property
The shared responsibility payment is thus not a direct tax
That must be apportioned among the several States
There may, however, be a more fundamental objection
To a tax on those who lack health insurance. Even if only
A tax, the payment under §5000A(b) remains a burden
That the Federal Government imposes for an omission, not
An act. If it is troubling to interpret the Commerce Clause
As authorizing Congress to regulate those who abstain
From commerce, perhaps it should be similarly troubling to
Permit Congress to impose a tax for not doing something
Three considerations allay this concern. First, and most
Importantly, it is abundantly clear the Constitution does
Not guarantee that individuals may avoid taxation through
Inactivity. A capitation, after all, is a tax that everyone must pay simply for existing, and capitations are
Expressly contemplated by the Constitution. The Court
Today holds that our Constitution protects us from federal Opinion of ROBERTS, C. J

42 NATIONAL FEDERATION OF INDEPENDENT
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Opinion of the Court
Regulation under the Commerce Clause so long as we abstain from the regulated activity. But from its creation
The Constitution has made no such promise with respect to
Taxes. See Letter from Benjamin Franklin to M. Le Roy
(Nov. 13, 1789) (“Our new Constitution is now established
. . . but in this world nothing can be said to be certain
Except death and taxes”)
Whether the mandate can be upheld under the Commerce Clause is a question about the scope of federal
Authority. Its answer depends on whether Congress can
Exercise what all acknowledge to be the novel course of
Directing individuals to purchase insurance. Congress’s
Use of the Taxing Clause to encourage buying something
Is, by contrast, not new. Tax incentives already promote
For example, purchasing homes and professional educations. See 26 U. S. C. §§163(h), 25A. Sustaining the
Mandate as a tax depends only on whether Congress has
Properly exercised its taxing power to encourage purchasing health insurance, not whether it can. Upholding the
Individual mandate under the Taxing Clause thus does
Not recognize any new federal power. It determines that
Congress has used an existing one
Second, Congress’s ability to use its taxing power to
Influence conduct is not without limits. A few of our cases
Policed these limits aggressively, invalidating punitive
Exactions obviously designed to regulate behavior otherwise regarded at the time as beyond federal authority
See, e.g., United States v. Butler, 297 U. S. 1 (1936); Drexel
Furniture, 259 U. S. 20. More often and more recently
We have declined to closely examine the regulatory motive
Or effect of revenue-raising measures. See Kahriger, 345
U. S., at 27–31 (collecting cases). We have nonetheless
Maintained that “‘there comes a time in the extension of
The penalizing features of the so-called tax when it loses
Its character as such and becomes a mere penalty with the
Characteristics of regulation and punishment.’” Kurth Opinion of ROBERTS, C. J
Cite as: 567 U. S. ____ (2012) 43
Opinion of the Court
Ranch, 511 U. S., at 779 (quoting Drexel Furniture, supra
At 38)
We have already explained that the shared responsibility payment’s practical characteristics pass muster as a
Tax under our narrowest interpretations of the taxing
Power. Supra, at 35–36. Because the tax at hand is
Within even those strict limits, we need not here decide the
Precise point at which an exaction becomes so punitive
That the taxing power does not authorize it. It remains
True, however, that the “‘power to tax is not the power to
Destroy while this Court sits.’” Oklahoma Tax Comm’n v
Texas Co., 336 U. S. 342, 364 (1949) (quoting Panhandle
Oil Co. v. Mississippi ex rel. Knox, 277 U. S. 218, 223
(1928) (Holmes, J., dissenting))
Third, although the breadth of Congress’s power to tax
Is greater than its power to regulate commerce, the taxing
Power does not give Congress the same degree of control
Over individual behavior. Once we recognize that Congress may regulate a particular decision under the Commerce Clause, the Federal Government can bring its full
Weight to bear. Congress may simply command individuals to do as it directs. An individual who disobeys may
Be subjected to criminal sanctions. Those sanctions can
Include not only fines and imprisonment, but all the attendant consequences of being branded a criminal: deprivation of otherwise protected civil rights, such as the right
To bear arms or vote in elections; loss of employment opportunities; social stigma; and severe disabilities in other
Controversies, such as custody or immigration disputes
By contrast, Congress’s authority under the taxing
Power is limited to requiring an individual to pay money
Into the Federal Treasury, no more. If a tax is properly
Paid, the Government has no power to compel or punish
Individuals subject to it. We do not make light of the severe burden that taxation—especially taxation motivated
By a regulatory purpose—can impose. But imposition
44 NATIONAL FEDERATION OF INDEPENDENT
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Of a tax nonetheless leaves an individual with a lawful
Choice to do or not do a certain act, so long as he is willing
To pay a tax levied on that choice.11
The Affordable Care Act’s requirement that certain individuals pay a financial penalty for not obtaining health
Insurance may reasonably be characterized as a tax. Because the Constitution permits such a tax, it is not our role
To forbid it, or to pass upon its wisdom or fairness
D
JUSTICE GINSBURG questions the necessity of rejecting
The Government’s commerce power argument, given that
§5000A can be upheld under the taxing power. Post, at 37
But the statute reads more naturally as a command to buy
Insurance than as a tax, and I would uphold it as a command if the Constitution allowed it. It is only because the
Commerce Clause does not authorize such a command
That it is necessary to reach the taxing power question
And it is only because we have a duty to construe a statute to save it, if fairly possible, that §5000A can be interpreted as a tax. Without deciding the Commerce Clause
Question, I would find no basis to adopt such a saving
Construction
The Federal Government does not have the power to
Order people to buy health insurance. Section 5000A
Would therefore be unconstitutional if read as a command
The Federal Government does have the power to impose a
Tax on those without health insurance. Section 5000A is
——————
11
Of course, individuals do not have a lawful choice not to pay a tax
Due, and may sometimes face prosecution for failing to do so (although
Not for declining to make the shared responsibility payment, see 26
U. S. C. §5000A(g)(2)). But that does not show that the tax restricts the
Lawful choice whether to undertake or forgo the activity on which the tax
Is predicated. Those subject to the individual mandate may lawfully
Forgo health insurance and pay higher taxes, or buy health insurance
And pay lower taxes. The only thing they may not lawfully do is not
Buy health insurance and not pay the resulting tax

Cite as: 567 U. S. ____ (2012) 45
Opinion of ROBERTS, C. J
Therefore constitutional, because it can reasonably be read
As a tax
IV
A
The States also contend that the Medicaid expansion
Exceeds Congress’s authority under the Spending Clause
They claim that Congress is coercing the States to adopt
The changes it wants by threatening to withhold all of a
State’s Medicaid grants, unless the State accepts the new
Expanded funding and complies with the conditions that
Come with it. This, they argue, violates the basic principle
That the “Federal Government may not compel the States
To enact or administer a federal regulatory program.” New
York, 505 U. S., at 188
There is no doubt that the Act dramatically increases
State obligations under Medicaid. The current Medicaid
Program requires States to cover only certain discrete
Categories of needy individuals—pregnant women, children, needy families, the blind, the elderly, and the disabled. 42 U. S. C. §1396a(a)(10). There is no mandatory
Coverage for most childless adults, and the States typically
Do not offer any such coverage. The States also enjoy
Considerable flexibility with respect to the coverage levels
For parents of needy families. §1396a(a)(10)(A)(ii). On
Average States cover only those unemployed parents who
Make less than 37 percent of the federal poverty level, and
Only those employed parents who make less than 63 percent of the poverty line. Kaiser Comm’n on Medicaid and
The Uninsured, Performing Under Pressure 11, and fig. 11
(2012)
The Medicaid provisions of the Affordable Care Act, in
Contrast, require States to expand their Medicaid programs by 2014 to cover all individuals under the age of 65
With incomes below 133 percent of the federal poverty line
§1396a(a)(10)(A)(i)(VIII). The Act also establishes a new 46 NATIONAL FEDERATION OF INDEPENDENT
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“[e]ssential health benefits” package, which States must
Provide to all new Medicaid recipients—a level sufficient
To satisfy a recipient’s obligations under the individual mandate. §§1396a(k)(1), 1396u–7(b)(5), 18022(b). The Affordable Care Act provides that the Federal Government
Will pay 100 percent of the costs of covering these newly
Eligible individuals through 2016. §1396d(y)(1). In the
Following years, the federal payment level gradually decreases, to a minimum of 90 percent. Ibid. In light of
The expansion in coverage mandated by the Act, the Federal
Government estimates that its Medicaid spending will increase by approximately $100 billion per year, nearly 40
Percent above current levels. Statement of Douglas W
Elmendorf, CBO’s Analysis of the Major Health Care
Legislation Enacted in March 2010, p. 14, Table 2 (Mar
30, 2011)
The Spending Clause grants Congress the power “to pay
The Debts and provide for the . . . general Welfare of the
United States.” U. S. Const., Art. I, §8, cl. 1. We have
Long recognized that Congress may use this power to grant
Federal funds to the States, and may condition such a
Grant upon the States’ “taking certain actions that Congress could not require them to take.” College Savings Bank
527 U. S., at 686. Such measures “encourage a State
To regulate in a particular way, [and] influenc[e] a State’s
Policy choices.” New York, supra, at 166. The conditions imposed by Congress ensure that the funds are
Used by the States to “provide for the . . . general Welfare”
In the manner Congress intended
At the same time, our cases have recognized limits on
Congress’s power under the Spending Clause to secure
State compliance with federal objectives. “We have repeatedly characterized . . . Spending Clause legislation as
‘much in the nature of a contract.’” Barnes v. Gorman
536 U. S. 181, 186 (2002) (quoting Pennhurst State School
And Hospital v. Halderman, 451 U. S. 1, 17 (1981)). The Cite as: 567 U. S. ____ (2012) 47
Opinion of ROBERTS, C. J
Legitimacy of Congress’s exercise of the spending power
“thus rests on whether the State voluntarily and knowingly
Accepts the terms of the ‘contract.’” Pennhurst, supra
At 17. Respecting this limitation is critical to ensuring
That Spending Clause legislation does not undermine the
Status of the States as independent sovereigns in our federal system. That system “rests on what might at first
Seem a counterintuitive insight, that ‘freedom is enhanced
By the creation of two governments, not one.’ ” Bond, 564
U. S., at ___ (slip op., at 8) (quoting Alden v. Maine, 527
U. S. 706, 758 (1999)). For this reason, “the Constitution
Has never been understood to confer upon Congress the
Ability to require the States to govern according to Congress’ instructions.” New York, supra, at 162. Otherwise
The two-government system established by the Framers
Would give way to a system that vests power in one central
Government, and individual liberty would suffer
That insight has led this Court to strike down federal legislation that commandeers a State’s legislative or
Administrative apparatus for federal purposes. See, e.g.,
Printz, 521 U. S., at 933 (striking down federal legisla-
Tion compelling state law enforcement officers to perform
Federally mandated background checks on handgun purchasers); New York, supra, at 174–175 (invalidating provisions of an Act that would compel a State to either take
Title to nuclear waste or enact particular state waste
Regulations). It has also led us to scrutinize Spending
Clause legislation to ensure that Congress is not using
Financial inducements to exert a “power akin to undue
Influence.” Steward Machine Co. v. Davis, 301 U. S. 548
590 (1937). Congress may use its spending power to create incentives for States to act in accordance with federal
Policies. But when “pressure turns into compulsion,” ibid.,
The legislation runs contrary to our system of federalism
“[T]he Constitution simply does not give Congress the
Authority to require the States to regulate.” New York, 48 NATIONAL FEDERATION OF INDEPENDENT
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505 U. S., at 178. That is true whether Congress directly
Commands a State to regulate or indirectly coerces a State
To adopt a federal regulatory system as its own
Permitting the Federal Government to force the States
To implement a federal program would threaten the political accountability key to our federal system. “[W]here the
Federal Government directs the States to regulate, it may
Be state officials who will bear the brunt of public disapproval, while the federal officials who devised the regulatory program may remain insulated from the electoral
Ramifications of their decision.” Id., at 169. Spending
Clause programs do not pose this danger when a State has
A legitimate choice whether to accept the federal conditions in exchange for federal funds. In such a situation
State officials can fairly be held politically accountable for
Choosing to accept or refuse the federal offer. But when
The State has no choice, the Federal Government can
Achieve its objectives without accountability, just as in
New York and Printz. Indeed, this danger is heightened
When Congress acts under the Spending Clause, because
Congress can use that power to implement federal policy it
Could not impose directly under its enumerated powers
We addressed such concerns in Steward Machine. That
Case involved a federal tax on employers that was abated
If the businesses paid into a state unemployment plan that
Met certain federally specified conditions. An employer
Sued, alleging that the tax was impermissibly “driv[ing]
The state legislatures under the whip of economic pressure
Into the enactment of unemployment compensation laws
At the bidding of the central government.” 301 U. S., at
587. We acknowledged the danger that the Federal Government might employ its taxing power to exert a “power
Akin to undue influence” upon the States. Id., at 590. But
We observed that Congress adopted the challenged tax and
Abatement program to channel money to the States that
Would otherwise have gone into the Federal Treasury for
Cite as: 567 U. S. ____ (2012) 49
Opinion of ROBERTS, C. J
Use in providing national unemployment services. Congress was willing to direct businesses to instead pay the
Money into state programs only on the condition that the
Money be used for the same purposes. Predicating tax
Abatement on a State’s adoption of a particular type of unemployment legislation was therefore a means to “safeguard [the Federal Government’s] own treasury.” Id., at
591. We held that “[i]n such circumstances, if in no others, inducement or persuasion does not go beyond the
Bounds of power.” Ibid
In rejecting the argument that the federal law was a
“weapon[] of coercion, destroying or impairing the autonomy of the states,” the Court noted that there was no
Reason to suppose that the State in that case acted other
Than through “her unfettered will.” Id., at 586, 590
Indeed, the State itself did “not offer a suggestion that in
Passing the unemployment law she was affected by duress.” Id., at 589
As our decision in Steward Machine confirms, Congress
May attach appropriate conditions to federal taxing and
Spending programs to preserve its control over the use of
Federal funds. In the typical case we look to the States to
Defend their prerogatives by adopting “the simple expedient of not yielding” to federal blandishments when they
Do not want to embrace the federal policies as their own
Massachusetts v. Mellon, 262 U. S. 447, 482 (1923). The
States are separate and independent sovereigns. Sometimes they have to act like it
The States, however, argue that the Medicaid expansion
Is far from the typical case. They object that Congress has
“crossed the line distinguishing encouragement from
Coercion,” New York, supra, at 175, in the way it has structured the funding: Instead of simply refusing to grant the
New funds to States that will not accept the new conditions, Congress has also threatened to withhold those
States’ existing Medicaid funds. The States claim that
50 NATIONAL FEDERATION OF INDEPENDENT
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This threat serves no purpose other than to force unwilling
States to sign up for the dramatic expansion in health care
Coverage effected by the Act
Given the nature of the threat and the programs at
Issue here, we must agree. We have upheld Congress’s
Authority to condition the receipt of funds on the States’
Complying with restrictions on the use of those funds
Because that is the means by which Congress ensures that
The funds are spent according to its view of the “general
Welfare.” Conditions that do not here govern the use
Of the funds, however, cannot be justified on that ba-
Sis. When, for example, such conditions take the form of
Threats to terminate other significant independent grants
The conditions are properly viewed as a means of pressuring the States to accept policy changes
In South Dakota v. Dole, we considered a challenge to a
Federal law that threatened to withhold five percent of a
State’s federal highway funds if the State did not raise its
Drinking age to 21. The Court found that the condition
Was “directly related to one of the main purposes for which
Highway funds are expended—safe interstate travel.” 483
U. S., at 208. At the same time, the condition was not a
Restriction on how the highway funds—set aside for specific highway improvement and maintenance efforts—were
To be used
We accordingly asked whether “the financial inducement offered by Congress” was “so coercive as to pass the
Point at which ‘pressure turns into compulsion.’” Id., at
211 (quoting Steward Machine, supra, at 590). By “financial inducement” the Court meant the threat of losing five
Percent of highway funds; no new money was offered to
The States to raise their drinking ages. We found that the
Inducement was not impermissibly coercive, because
Congress was offering only “relatively mild encouragement
To the States.” Dole, 483 U. S., at 211. We observed that
“all South Dakota would lose if she adheres to her chosen Cite as: 567 U. S. ____ (2012) 51
Opinion of ROBERTS, C. J
Course as to a suitable minimum drinking age is 5%” of
Her highway funds. Ibid. In fact, the federal funds at
Stake constituted less than half of one percent of South
Dakota’s budget at the time. See Nat. Assn. of State
Budget Officers, The State Expenditure Report 59 (1987);
South Dakota v. Dole, 791 F. 2d 628, 630 (CA8 1986). In
Consequence, “we conclude[d] that [the] encouragement
To state action [was] a valid use of the spending power.”
Dole, 483 U. S., at 212. Whether to accept the drinking
Age change “remain[ed] the prerogative of the States not
Merely in theory but in fact.” Id., at 211–212
In this case, the financial “inducement” Congress has
Chosen is much more than “relatively mild encouragement”—it is a gun to the head. Section 1396c of the Medicaid Act provides that if a State’s Medicaid plan does
Not comply with the Act’s requirements, the Secretary of
Health and Human Services may declare that “further
Payments will not be made to the State.” 42 U. S. C
§1396c. A State that opts out of the Affordable Care Act’s
Expansion in health care coverage thus stands to lose not
Merely “a relatively small percentage” of its existing Medicaid funding, but all of it. Dole, supra, at 211. Medicaid
Spending accounts for over 20 percent of the average
State’s total budget, with federal funds covering 50 to 83
Percent of those costs. See Nat. Assn. of State Budget
Officers, Fiscal Year 2010 State Expenditure Report, p. 11
Table 5 (2011); 42 U. S. C. §1396d(b). The Federal Government estimates that it will pay out approximately $3.3
Trillion between 2010 and 2019 in order to cover the costs
Of pre-expansion Medicaid. Brief for United States 10
N. 6. In addition, the States have developed intricate
Statutory and administrative regimes over the course of
Many decades to implement their objectives under existing
Medicaid. It is easy to see how the Dole Court could conclude that the threatened loss of less than half of one
Percent of South Dakota’s budget left that State with a
52 NATIONAL FEDERATION OF INDEPENDENT
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“prerogative” to reject Congress’s desired policy, “not
Merely in theory but in fact.” 483 U. S., at 211–212. The
Threatened loss of over 10 percent of a State’s overall
Budget, in contrast, is economic dragooning that leaves the
States with no real option but to acquiesce in the Medicaid
Expansion.12
JUSTICE GINSBURG claims that Dole is distinguishable
Because here “Congress has not threatened to withhold
Funds earmarked for any other program.” Post, at 47. But
That begs the question: The States contend that the expansion is in reality a new program and that Congress is
Forcing them to accept it by threatening the funds for the
Existing Medicaid program. We cannot agree that existing
Medicaid and the expansion dictated by the Affordable
Care Act are all one program simply because “Congress
Styled” them as such. Post, at 49. If the expansion is not
Properly viewed as a modification of the existing Medicaid
Program, Congress’s decision to so title it is irrelevant.13
——————
12
JUSTICE GINSBURG observes that state Medicaid spending will increase by only 0.8 percent after the expansion. Post, at 43. That not
Only ignores increased state administrative expenses, but also assumes
That the Federal Government will continue to fund the expansion at the
Current statutorily specified levels. It is not unheard of, however, for
The Federal Government to increase requirements in such a manner as
To impose unfunded mandates on the States. More importantly, the
Size of the new financial burden imposed on a State is irrelevant in
Analyzing whether the State has been coerced into accepting that
Burden. “Your money or your life” is a coercive proposition, whether
You have a single dollar in your pocket or $500
13
Nor, of course, can the number of pages the amendment occupies, or the extent to which the change preserves and works within
The existing program, be dispositive. Cf. post, at 49–50 (opinion of
GINSBURG, J.). Take, for example, the following hypothetical amendment: “All of a State’s citizens are now eligible for Medicaid.” That
Change would take up a single line and would not alter any “operational
Aspect[ ] of the program” beyond the eligibility requirements. Post, at
49. Yet it could hardly be argued that such an amendment was a
Permissible modification of Medicaid, rather than an attempt to foist an
Entirely new health care system upon the States. Cite as: 567 U. S. ____ (2012) 53
Opinion of ROBERTS, C. J
Here, the Government claims that the Medicaid expansion is properly viewed merely as a modification of the existing program because the States agreed that Congress
Could change the terms of Medicaid when they signed on
In the first place. The Government observes that the
Social Security Act, which includes the original Medicaid
Provisions, contains a clause expressly reserving “[t]he
Right to alter, amend, or repeal any provision” of that
Statute. 42 U. S. C. §1304. So it does. But “if Congress
Intends to impose a condition on the grant of federal moneys, it must do so unambiguously.” Pennhurst, 451 U. S.,
At 17. A State confronted with statutory language reserving the right to “alter” or “amend” the pertinent provisions
Of the Social Security Act might reasonably assume that
Congress was entitled to make adjustments to the Medicaid program as it developed. Congress has in fact done
So, sometimes conditioning only the new funding, other
Times both old and new. See, e.g., Social Security Amendments of 1972, 86 Stat. 1381–1382, 1465 (extending Medicaid eligibility, but partly conditioning only the new
Funding); Omnibus Budget Reconciliation Act of 1990
§4601, 104 Stat. 1388–166 (extending eligibility, and
Conditioning old and new funds)
The Medicaid expansion, however, accomplishes a shift
In kind, not merely degree. The original program was designed to cover medical services for four particular categories of the needy: the disabled, the blind, the elderly
And needy families with dependent children. See 42
U. S. C. §1396a(a)(10). Previous amendments to Medicaid
Eligibility merely altered and expanded the boundaries of
These categories. Under the Affordable Care Act, Medicaid
Is transformed into a program to meet the health care
Needs of the entire nonelderly population with income
Below 133 percent of the poverty level. It is no longer a
Program to care for the neediest among us, but rather an
Element of a comprehensive national plan to provide uni-

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Versal health insurance coverage.14
Indeed, the manner in which the expansion is structured indicates that while Congress may have styled the
Expansion a mere alteration of existing Medicaid, it recognized it was enlisting the States in a new health care
Program. Congress created a separate funding provision
To cover the costs of providing services to any person
Made newly eligible by the expansion. While Congress pays
50 to 83 percent of the costs of covering individuals currently enrolled in Medicaid, §1396d(b), once the expansion is
Fully implemented Congress will pay 90 percent of the
Costs for newly eligible persons, §1396d(y)(1). The conditions on use of the different funds are also distinct. Congress mandated that newly eligible persons receive a level
Of coverage that is less comprehensive than the traditional
Medicaid benefit package. §1396a(k)(1); see Brief for
United States 9
As we have explained, “[t]hough Congress’ power to
Legislate under the spending power is broad, it does not
Include surprising participating States with postacceptance or ‘retroactive’ conditions.” Pennhurst, supra, at
25. A State could hardly anticipate that Congress’s reservation of the right to “alter” or “amend” the Medicaid
Program included the power to transform it so dramatically
JUSTICE GINSBURG claims that in fact this expansion is
——————
14
JUSTICE GINSBURG suggests that the States can have no objection to
The Medicaid expansion, because “Congress could have repealed Medicaid [and,] [t]hereafter, . . . could have enacted Medicaid II, a new
Program combining the pre-2010 coverage with the expanded coverage
Required by the ACA.” Post, at 51; see also post, at 38. But it would
Certainly not be that easy. Practical constraints would plainly inhibit
If not preclude, the Federal Government from repealing the existing
Program and putting every feature of Medicaid on the table for political
Reconsideration. Such a massive undertaking would hardly be “ritualistic.” Ibid. The same is true of JUSTICE GINSBURG’s suggestion that
Congress could establish Medicaid as an exclusively federal program
Post, at 44. Cite as: 567 U. S. ____ (2012) 55
Opinion of ROBERTS, C. J
No different from the previous changes to Medicaid, such
That “a State would be hard put to complain that it lacked
Fair notice.” Post, at 56. But the prior change she discusses—presumably the most dramatic alteration she could
Find—does not come close to working the transformation
The expansion accomplishes. She highlights an amendment requiring States to cover pregnant women and increasing the number of eligible children. Ibid. But this
Modification can hardly be described as a major change in
A program that—from its inception—provided health care
For “families with dependent children.” Previous Medicaid
Amendments simply do not fall into the same category as
The one at stake here
The Court in Steward Machine did not attempt to “fix
The outermost line” where persuasion gives way to coercion. 301 U. S., at 591. The Court found it “[e]nough for
Present purposes that wherever the line may be, this
Statute is within it.” Ibid. We have no need to fix a line
Either. It is enough for today that wherever that line may
Be, this statute is surely beyond it. Congress may not
Simply “conscript state [agencies] into the national bureaucratic army,” FERC v. Mississippi, 456 U. S. 742, 775
(1982) (O’Connor, J., concurring in judgment in part and
Dissenting in part), and that is what it is attempting to do
With the Medicaid expansion
B
Nothing in our opinion precludes Congress from offering
Funds under the Affordable Care Act to expand the availability of health care, and requiring that States accepting
Such funds comply with the conditions on their use. What
Congress is not free to do is to penalize States that choose
Not to participate in that new program by taking away
Their existing Medicaid funding. Section 1396c gives the
Secretary of Health and Human Services the authority to

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Do just that. It allows her to withhold all “further [Medicaid] payments . . . to the State” if she determines that the
State is out of compliance with any Medicaid requirement
Including those contained in the expansion. 42 U. S. C
§1396c. In light of the Court’s holding, the Secretary
Cannot apply §1396c to withdraw existing Medicaid funds
For failure to comply with the requirements set out in the
Expansion
That fully remedies the constitutional violation we have
Identified. The chapter of the United States Code that
Contains §1396c includes a severability clause confirming
That we need go no further. That clause specifies that “[i]f
Any provision of this chapter, or the application thereof to
Any person or circumstance, is held invalid, the remainder
Of the chapter, and the application of such provision to
Other persons or circumstances shall not be affected thereby.”
§1303. Today’s holding does not affect the continued application of §1396c to the existing Medicaid program. Nor
Does it affect the Secretary’s ability to withdraw funds provided under the Affordable Care Act if a State that has
Chosen to participate in the expansion fails to comply with
The requirements of that Act
This is not to say, as the joint dissent suggests, that we
Are “rewriting the Medicaid Expansion.” Post, at 48
Instead, we determine, first, that §1396c is unconstitutional when applied to withdraw existing Medicaid funds
From States that decline to comply with the expansion
We then follow Congress’s explicit textual instruction to
Leave unaffected “the remainder of the chapter, and the
Application of [the challenged] provision to other persons
Or circumstances.” §1303. When we invalidate an application of a statute because that application is unconstitutional, we are not “rewriting” the statute; we are merely
Enforcing the Constitution
The question remains whether today’s holding affects
Other provisions of the Affordable Care Act. In considering Cite as: 567 U. S. ____ (2012) 57
Opinion of ROBERTS, C. J
That question, “[w]e seek to determine what Congress
Would have intended in light of the Court’s constitutional
Holding.” United States v. Booker, 543 U. S. 220, 246
(2005) (internal quotation marks omitted). Our “touchstone for any decision about remedy is legislative intent
For a court cannot use its remedial powers to circum-
Vent the intent of the legislature.” Ayotte v. Planned
Parenthood of Northern New Eng., 546 U. S. 320, 330
(2006) (internal quotation marks omitted). The question
Here is whether Congress would have wanted the rest of
The Act to stand, had it known that States would have a
Genuine choice whether to participate in the new Medicaid
Expansion. Unless it is “evident” that the answer is no, we
Must leave the rest of the Act intact. Champlin Refining
Co. v. Corporation Comm’n of Okla., 286 U. S. 210, 234
(1932)
We are confident that Congress would have wanted to
Preserve the rest of the Act. It is fair to say that Congress
Assumed that every State would participate in the Medicaid expansion, given that States had no real choice but to
Do so. The States contend that Congress enacted the rest
Of the Act with such full participation in mind; they point
Out that Congress made Medicaid a means for satisfying
The mandate, 26 U. S. C. §5000A(f)(1)(A)(ii), and enacted
No other plan for providing coverage to many low-income
Individuals. According to the States, this means that the
Entire Act must fall
We disagree. The Court today limits the financial pressure the Secretary may apply to induce States to accept
The terms of the Medicaid expansion. As a practical matter, that means States may now choose to reject the expansion; that is the whole point. But that does not mean
All or even any will. Some States may indeed decline to
Participate, either because they are unsure they will be
Able to afford their share of the new funding obligations
Or because they are unwilling to commit the administra-

58 NATIONAL FEDERATION OF INDEPENDENT
BUSINESS v. SEBELIUS
Opinion of ROBERTS, C. J
Tive resources necessary to support the expansion. Other
States, however, may voluntarily sign up, finding the idea
Of expanding Medicaid coverage attractive, particularly
Given the level of federal funding the Act offers at the
Outset
We have no way of knowing how many States will accept the terms of the expansion, but we do not believe
Congress would have wanted the whole Act to fall, simply
Because some may choose not to participate. The other
Reforms Congress enacted, after all, will remain “fully
Operative as a law,” Champlin, supra, at 234, and will still
Function in a way “consistent with Congress’ basic objectives in enacting the statute,” Booker, supra, at 259
Confident that Congress would not have intended anything different, we conclude that the rest of the Act need
Not fall in light of our constitutional holding
* * *
The Affordable Care Act is constitutional in part and
Unconstitutional in part. The individual mandate cannot
Be upheld as an exercise of Congress’s power under the
Commerce Clause. That Clause authorizes Congress to
Regulate interstate commerce, not to order individuals to
Engage in it. In this case, however, it is reasonable to construe what Congress has done as increasing taxes on those
Who have a certain amount of income, but choose to go
Without health insurance. Such legislation is within Congress’s power to tax
As for the Medicaid expansion, that portion of the Affordable Care Act violates the Constitution by threatening
Existing Medicaid funding. Congress has no authority to
Order the States to regulate according to its instructions
Congress may offer the States grants and require the
States to comply with accompanying conditions, but the
States must have a genuine choice whether to accept the
Offer. The States are given no such choice in this case: Cite as: 567 U. S. ____ (2012) 59
Opinion of ROBERTS, C. J
They must either accept a basic change in the nature of
Medicaid, or risk losing all Medicaid funding. The remedy
For that constitutional violation is to preclude the Federal
Government from imposing such a sanction. That remedy
Does not require striking down other portions of the Affordable Care Act
The Framers created a Federal Government of limited
Powers, and assigned to this Court the duty of enforcing
Those limits. The Court does so today. But the Court does
Not express any opinion on the wisdom of the Affordable
Care Act. Under the Constitution, that judgment is reserved to the people
The judgment of the Court of Appeals for the Eleventh
Circuit is affirmed in part and reversed in part
It is so ordered. _________________
_________________

Cite as: 567 U. S. ____ (2012) 1
Opinion of GINSBURG, J
SUPREME COURT OF THE UNITED STATES
Nos. 11–393, 11–398 and 11–400
NATIONAL FEDERATION OF INDEPENDENT
BUSINESS, ET AL., PETITIONERS
11–393 v
KATHLEEN SEBELIUS, SECRETARY OF HEALTH
AND HUMAN SERVICES, ET AL
DEPARTMENT OF HEALTH AND HUMAN

SERVICES, ET AL., PETITIONERS
11–398 v
FLORIDA ET AL
11–400
FLORIDA, ET AL., PETITIONERS
V
DEPARTMENT OF HEALTH AND
HUMAN SERVICES ET AL
ON WRITS OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE ELEVENTH CIRCUIT
[June 28, 2012]
JUSTICE GINSBURG, with whom JUSTICE SOTOMAYOR
Joins, and with whom JUSTICE BREYER and JUSTICE
KAGAN join as to Parts I, II, III, and IV, concurring in
Part, concurring in the judgment in part, and dissenting in
Part
I agree with THE CHIEF JUSTICE that the Anti-Injunction
Act does not bar the Court’s consideration of this case
And that the minimum coverage provision is a proper
Exercise of Congress’ taxing power. I therefore join Parts
I, II, and III–C of THE CHIEF JUSTICE’s opinion
Unlike THE CHIEF JUSTICE, however, I would hold, alterna­
2 NATIONAL FEDERATION OF INDEPENDENT
BUSINESS v. SEBELIUS

Opinion of GINSBURG, J
Tively, that the Commerce Clause authorizes Congress to
Enact the minimum coverage provision. I would also hold
That the Spending Clause permits the Medicaid expansion
Exactly as Congress enacted it
I
The provision of health care is today a concern of na­
Tional dimension, just as the provision of old-age and
Survivors’ benefits was in the 1930’s. In the Social Secu-
Rity Act, Congress installed a federal system to provide
Monthly benefits to retired wage earners and, eventually
To their survivors. Beyond question, Congress could have
Adopted a similar scheme for health care. Congress chose
Instead, to preserve a central role for private insurers and
State governments. According to THE CHIEF JUSTICE, the
Commerce Clause does not permit that preservation. This
Rigid reading of the Clause makes scant sense and is
Stunningly retrogressive
Since 1937, our precedent has recognized Congress’
Large authority to set the Nation’s course in the economic
And social welfare realm. See United States v. Darby, 312
U. S. 100, 115 (1941) (overruling Hammer v. Dagenhart
247 U. S. 251 (1918), and recognizing that “regulations of
Commerce which do not infringe some constitutional prohibi-
Tion are within the plenary power conferred on Congress
By the Commerce Clause”); NLRB v. Jones & Laughlin
Steel Corp., 301 U. S. 1, 37 (1937) (“[The commerce]
Power is plenary and may be exerted to protect interstate
Commerce no matter what the source of the dangers which
Threaten it.” (internal quotation marks omitted)). THE
CHIEF JUSTICE’s crabbed reading of the Commerce Clause
Harks back to the era in which the Court routinely thwarted
Congress’ efforts to regulate the national economy in
The interest of those who labor to sustain it. See, e.g.,
Railroad Retirement Bd. v. Alton R. Co., 295 U. S. 330
362, 368 (1935) (invalidating compulsory retirement and Cite as: 567 U. S. ____ (2012) 3
Opinion of GINSBURG, J
Pension plan for employees of carriers subject to the Inter­
State Commerce Act; Court found law related essentially
“to the social welfare of the worker, and therefore remote
From any regulation of commerce as such”). It is a reading
That should not have staying power
A
In enacting the Patient Protection and Affordable Care
Act (ACA), Congress comprehensively reformed the
National market for health-care products and services
By any measure, that market is immense. Collectively
Americans spent $2.5 trillion on health care in 2009
Accounting for 17.6% of our Nation’s economy. 42 U. S. C
§18091(2)(B) (2006 ed., Supp. IV). Within the next decade
It is anticipated, spending on health care will nearly dou­
Ble. Ibid
The health-care market’s size is not its only distinctive
Feature. Unlike the market for almost any other product
Or service, the market for medical care is one in which all
Individuals inevitably participate. Virtually every person
Residing in the United States, sooner or later, will visit
A doctor or other health-care professional. See Dept. of
Health and Human Services, National Center for Health
Statistics, Summary Health Statistics for U. S. Adults:
National Health Interview Survey 2009, Ser. 10, No. 249
P. 124, Table 37 (Dec. 2010) (Over 99.5% of adults above
65 have visited a health-care professional.). Most people
Will do so repeatedly. See id., at 115, Table 34 (In 2009
Alone, 64% of adults made two or more visits to a doctor’s
Office.)
When individuals make those visits, they face another
Reality of the current market for medical care: its high
Cost. In 2010, on average, an individual in the United
States incurred over $7,000 in health-care expenses
Dept. of Health and Human Services, Centers for Medi­
Care and Medicaid Services, Historic National Health
4 NATIONAL FEDERATION OF INDEPENDENT
BUSINESS v. SEBELIUS

Opinion of GINSBURG, J
Expenditure Data, National Health Expenditures: Se-
Lected Calendar Years 1960–2010 (Table 1). Over a life­
Time, costs mount to hundreds of thousands of dollars. See
Alemayahu & Warner, The Lifetime Distribution of
Health Care Costs, in 39 Health Service Research 627, 635
(June 2004). When a person requires nonroutine care, the
Cost will generally exceed what he or she can afford to pay
A single hospital stay, for instance, typically costs up­
Wards of $10,000. See Dept. of Health and Human Ser­
Vices, Office of Health Policy, ASPE Research Brief: The
Value of Health Insurance 5 (May 2011). Treatments for
Many serious, though not uncommon, conditions similarly
Cost a substantial sum. Brief for Economic Scholars as
Amici Curiae in No. 11–398, p. 10 (citing a study indicat­
Ing that, in 1998, the cost of treating a heart attack for the
First 90 days exceeded $20,000, while the annual cost of
Treating certain cancers was more than $50,000)
Although every U. S. domiciliary will incur significant
Medical expenses during his or her lifetime, the time when
Care will be needed is often unpredictable. An accident, a
Heart attack, or a cancer diagnosis commonly occurs with­
Out warning. Inescapably, we are all at peril of needing
Medical care without a moment’s notice. See, e.g., Camp­
Bell, Down the Insurance Rabbit Hole, N. Y. Times, Apr. 5
2012, p. A23 (telling of an uninsured 32-year-old woman
Who, healthy one day, became a quadriplegic the next due
To an auto accident)
To manage the risks associated with medical care—
Its high cost, its unpredictability, and its inevitability—
Most people in the United States obtain health insurance
Many (approximately 170 million in 2009) are insured by
Private insurance companies. Others, including those
Over 65 and certain poor and disabled persons, rely on
Government-funded insurance programs, notably Medicare
And Medicaid. Combined, private health insurers and
State and Federal Governments finance almost 85% of the
Cite as: 567 U. S. ____ (2012) 5
Opinion of GINSBURG, J
Medical care administered to U. S. residents. See Con­
Gressional Budget Office, CBO’s 2011 Long-Term Budget
Outlook 37 (June 2011)
Not all U. S. residents, however, have health insurance
In 2009, approximately 50 million people were uninsured
Either by choice or, more likely, because they could not
Afford private insurance and did not qualify for govern­
Ment aid. See Dept. of Commerce, Census Bureau, C
DeNavas-Walt, B. Proctor, & J. Smith, Income, Poverty
And Health Insurance Coverage in the United States: 2009
P. 23, Table 8 (Sept. 2010). As a group, uninsured individ­
Uals annually consume more than $100 billion in health-
Care services, nearly 5% of the Nation’s total. Hidden
Health Tax: Americans Pay a Premium 2 (2009), avail-
Able at http://www.familiesusa.org (all Internet mate-
Rial as visited June 25, 2012, and included in Clerk of
Court’s case file). Over 60% of those without insurance
Visit a doctor’s office or emergency room in a given year
See Dept. of Health and Human Services, National Cen-
Ter for Health Statistics, Health—United States—2010
P. 282, Table 79 (Feb. 2011)
B
The large number of individuals without health insur­
Ance, Congress found, heavily burdens the national
Health-care market. See 42 U. S. C. §18091(2). As just
Noted, the cost of emergency care or treatment for a seri­
Ous illness generally exceeds what an individual can afford
To pay on her own. Unlike markets for most products
However, the inability to pay for care does not mean that
An uninsured individual will receive no care. Federal and
State law, as well as professional obligations and embed­
Ded social norms, require hospitals and physicians to
Provide care when it is most needed, regardless of the
Patient’s ability to pay. See, e.g., 42 U. S. C. §1395dd; Fla
Stat. §395.1041(3)(f) (2010); Tex. Health & Safety Code 6 NATIONAL FEDERATION OF INDEPENDENT
BUSINESS v. SEBELIUS

Opinion of GINSBURG, J
Ann. §§311.022(a) and (b) (West 2010); American Medical
Association, Council on Ethical and Judicial Affairs
Code of Medical Ethics, Current Opinions: Opinion 8.11—
Neglect of Patient, p. 70 (1998–1999 ed.)
As a consequence, medical-care providers deliver sig-
Nificant amounts of care to the uninsured for which the
Providers receive no payment. In 2008, for example, hospi-
Tals, physicians, and other health-care professionals
Received no compensation for $43 billion worth of the $116
Billion in care they administered to those without insur­
Ance. 42 U. S. C. §18091(2)(F) (2006 ed., Supp. IV)
Health-care providers do not absorb these bad debts
Instead, they raise their prices, passing along the cost
Of uncompensated care to those who do pay reliably: the
Government and private insurance companies. In response
Private insurers increase their premiums, shifting the
Cost of the elevated bills from providers onto those who
Carry insurance. The net result: Those with health insur­
Ance subsidize the medical care of those without it. As
Economists would describe what happens, the uninsured
“free ride” on those who pay for health insurance
The size of this subsidy is considerable. Congress found
That the cost-shifting just described “increases family
[Insurance] premiums by on average over $1,000 a year.”
Ibid. Higher premiums, in turn, render health insurance
Less affordable, forcing more people to go without insur­
Ance and leading to further cost-shifting
And it is hardly just the currently sick or injured among
The uninsured who prompt elevation of the price of health
Care and health insurance. Insurance companies and
Health-care providers know that some percentage of
Healthy, uninsured people will suffer sickness or injury
Each year and will receive medical care despite their ina­
Bility to pay. In anticipation of this uncompensated care
Health-care companies raise their prices, and insurers
Their premiums. In other words, because any uninsured
Cite as: 567 U. S. ____ (2012) 7
Opinion of GINSBURG, J
Person may need medical care at any moment and because
Health-care companies must account for that risk, every
Uninsured person impacts the market price of medical care
And medical insurance
The failure of individuals to acquire insurance has other
Deleterious effects on the health-care market. Because
Those without insurance generally lack access to preventa­
Tive care, they do not receive treatment for conditions—
Like hypertension and diabetes—that can be successfully
And affordably treated if diagnosed early on. See Institute
Of Medicine, National Academies, Insuring America’s
Health: Principles and Recommendations 43 (2004). When
Sickness finally drives the uninsured to seek care, once
Treatable conditions have escalated into grave health
Problems, requiring more costly and extensive interven­
Tion. Id., at 43–44. The extra time and resources provid­
Ers spend serving the uninsured lessens the providers’
Ability to care for those who do have insurance. See Kliff
High Uninsured Rates Can Kill You—Even if You Have
Coverage, Washington Post (May 7, 2012) (describing a
Study of California’s health-care market which found
That, when hospitals divert time and resources to provide
Uncompensated care, the quality of care the hospitals
Deliver to those with insurance drops significantly), availa-
Ble at http://www.washingtonpost.com/blogs/ezra-klein/post/
High- uninsured-rates-can-kill-you-even-if-you-have-coverage/2012/
05/07/gIQALNHN8T_print.html
C
States cannot resolve the problem of the uninsured on
Their own. Like Social Security benefits, a universal
Health-care system, if adopted by an individual State
Would be “bait to the needy and dependent elsewhere
Encouraging them to migrate and seek a haven of repose.”
Helvering v. Davis, 301 U. S. 619, 644 (1937). See also
Brief for Commonwealth of Massachusetts as Amicus

8 NATIONAL FEDERATION OF INDEPENDENT
BUSINESS v. SEBELIUS

Opinion of GINSBURG, J
Curiae in No. 11–398, p. 15 (noting that, in 2009, Massa­
Chusetts’ emergency rooms served thousands of uninsured
Out-of-state residents). An influx of unhealthy individuals
Into a State with universal health care would result in
Increased spending on medical services. To cover the
Increased costs, a State would have to raise taxes, and
Private health-insurance companies would have to in­
Crease premiums. Higher taxes and increased insurance
Costs would, in turn, encourage businesses and healthy
Individuals to leave the State
States that undertake health-care reforms on their own
Thus risk “placing themselves in a position of economic
Disadvantage as compared with neighbors or competitors.”
Davis, 301 U. S., at 644. See also Brief for Health Care for
All, Inc., et al. as Amici Curiae in No. 11–398, p. 4 (“[O]ut­
Of-state residents continue to seek and receive millions of
Dollars in uncompensated care in Massachusetts hospitals
Limiting the State’s efforts to improve its health care
System through the elimination of uncompensated care.”)
Facing that risk, individual States are unlikely to take the
Initiative in addressing the problem of the uninsured, even
Though solving that problem is in all States’ best interests
Congress’ intervention was needed to overcome this collective­
Action impasse
D
Aware that a national solution was required, Congress
Could have taken over the health-insurance market by
Establishing a tax-and-spend federal program like Social
Security. Such a program, commonly referred to as a
Single-payer system (where the sole payer is the Federal
Government), would have left little, if any, room for pri­
Vate enterprise or the States. Instead of going this route
Congress enacted the ACA, a solution that retains a ro­
Bust role for private insurers and state governments. To
Make its chosen approach work, however, Congress had to Cite as: 567 U. S. ____ (2012) 9
Opinion of GINSBURG, J
Use some new tools, including a requirement that most
Individuals obtain private health insurance coverage. See
26 U. S. C. §5000A (2006 ed., Supp. IV) (the minimum
Coverage provision). As explained below, by employing
These tools, Congress was able to achieve a practical, alto­
Gether reasonable, solution
A central aim of the ACA is to reduce the number of
Uninsured U. S. residents. See 42 U. S. C. §18091(2)(C)
And (I) (2006 ed., Supp. IV). The minimum coverage
Provision advances this objective by giving potential recip­
Ients of health care a financial incentive to acquire insur­
Ance. Per the minimum coverage provision, an individual
Must either obtain insurance or pay a toll constructed as a
Tax penalty. See 26 U. S. C. §5000A
The minimum coverage provision serves a further pur­
Pose vital to Congress’ plan to reduce the number of unin­
Sured. Congress knew that encouraging individuals to
Purchase insurance would not suffice to solve the problem
Because most of the uninsured are not uninsured by
Choice.1
Of particular concern to Congress were people
Who, though desperately in need of insurance, often cannot
Acquire it: persons who suffer from preexisting medical
Conditions
Before the ACA’s enactment, private insurance compa­
Nies took an applicant’s medical history into account when
Setting insurance rates or deciding whether to insure an
Individual. Because individuals with preexisting med-
——————
1
According to one study conducted by the National Center for Health
Statistics, the high cost of insurance is the most common reason why
Individuals lack coverage, followed by loss of one’s job, an employer’s
Unwillingness to offer insurance or an insurers’ unwillingness to cover
Those with preexisting medical conditions, and loss of Medicaid cover­
Age. See Dept. of Health and Human Services, National Center for
Health Statistics, Summary Health Statistics for the U. S. Population:
National Health Interview Survey—2009, Ser. 10, No. 248, p. 71, Table
25 (Dec. 2010). “[D]id not want or need coverage” received too few re-
Sponses to warrant its own category. See ibid., n. 2
10 NATIONAL FEDERATION OF INDEPENDENT
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Opinion of GINSBURG, J
Ical conditions cost insurance companies significantly more
Than those without such conditions, insurers routinely refused to insure these individuals, charged them substan­
Tially higher premiums, or offered only limited coverage
That did not include the preexisting illness. See Dept. of
Health and Human Services, Coverage Denied: How the
Current Health Insurance System Leaves Millions Behind
1 (2009) (Over the past three years, 12.6 million non­
Elderly adults were denied insurance coverage or charged
Higher premiums due to a preexisting condition.)
To ensure that individuals with medical histories have
Access to affordable insurance, Congress devised a three­
Part solution. First, Congress imposed a “guaranteed is­
Sue” requirement, which bars insurers from denying
Coverage to any person on account of that person’s medical
Condition or history. See 42 U. S. C. §§300gg–1, 300gg–3
300gg–4(a) (2006 ed., Supp. IV). Second, Congress required
Insurers to use “community rating” to price their insurance
Policies. See §300gg. Community rating, in effect, bars
Insurance companies from charging higher premiums
To those with preexisting conditions
But these two provisions, Congress comprehended, could
Not work effectively unless individuals were given a pow­
Erful incentive to obtain insurance. See Hearings before
The House Ways and Means Committee, 111th Cong., 1st
Sess., 10, 13 (2009) (statement of Uwe Reinhardt) (“[I]m-
Position of community-rated premiums and guaranteed
Issue on a market of competing private health insurers
Will inexorably drive that market into extinction, unless
These two features are coupled with . . . a mandate on
Individual[s] to be insured.” (emphasis in original))
In the 1990’s, several States—including New York, New