Legal Definitions - National Federation of Independent Business v. Sebelius (2012)

Definition: National Federation of Independent Business v. Sebelius (2012) is a Supreme Court case that upheld the constitutionality of the Patient Protection and Affordable Care Act of 2010 (ACA) by finding the individual mandate validly imposed through Congress’ taxing power and the Medicaid expansion legal by judicially prohibiting the Secretary from withdrawing existing Medicaid funds from states that refuse compliance with the ACA.

Example: The ACA required individuals to obtain health insurance or pay a penalty. The National Federation of Independent Business and several states challenged the constitutionality of this provision, arguing that Congress did not have the power to compel individuals to purchase health insurance. The Supreme Court ultimately upheld the individual mandate as a valid exercise of Congress’ taxing power.

Explanation: The example illustrates how the individual mandate was challenged and ultimately upheld as a valid exercise of Congress’ taxing power. The Court found that the shared responsibility payment, which individuals must pay if they do not obtain health insurance, is similar to a tax and therefore falls within Congress’ power to tax.