US Supreme Court Upholds Individual Mandate for Health Insurance

In a 5–4 ruling, the US Supreme Court upheld the provision of the Affordable Care Act requiring all adults to purchase health insurance or pay a penalty—the so-called individual mandate. The court rejected the government’s argument that because health care was a market in which everyone will eventually participate, the government could regulate individual coverage under the Commerce Clause. Instead, the court found the mandate to be constitutional when viewed as a tax. The full text of the court’s decision can be found through CNN’s post. Chief Justice John Roberts, writing for the majority, sums up the decision as follows:

“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.”

The court found a second contested provision that required states to expand existing coverage for Medicaid or lose federal funding for the program to be unconstitutional. Chief Justice Roberts writes:

“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 Biologics Price Competition and Innovation Act, which provides an abbreviated approval pathway for biosimilars, was enacted as a provision of the Affordable Care Act. There was some concern that if the individual mandate had been found to be unconstitutional, the entire piece of legislation would have been struck down, a fear that is now allayed. The Biotechnology Industry Organization says in their release, “We also will continue our work with US Food and Drug Administration (FDA) to implement the bipartisan-backed biosimilars pathway that was enacted under the law. Specifically, we will advocate for implementation approaches that ensure patient safety, expand patient access and competition, and provide necessary and fair incentives that will help spur continued biomedical breakthroughs.“