National Federation of Independent Business v. Sebelius

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
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 conceiv-able
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 pow- ers, 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 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
pro-hibitions, 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 enu-meration 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. Ros-siter 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 Con-stitution is not the source of their power. The
Consti-tution 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 au-thorization 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
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 affect interstate commerce can be expansive. That
power has been held to authorize federal regulation of such
seem-ingly local matters as a farmer’s decision to grow wheat for
himself and his livestock, and a loan shark’s extor-tionate
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 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.

															I

															In 2010, Congress enacted the Patient
Protection and Affordable Care Act, 124Stat. 119. The Act aims to
increase the number of Americans covered by health in-surance 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 cov-erage 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 individ-ual’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” 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 Fed-eration 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 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 ma-jority
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 ]

															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 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 individ-ual
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 per- son
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 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 pur-poses
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-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)
spec-ifies 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 man-ner as taxes,” §5000A(g)(1) made the
Anti-Injunction Act applicable to this penalty.

															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 author-ity to assess
and collect taxes, and generally specifying the means by which he
shall do so. See §6201 (assess-ment 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., §§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 al- ready 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
in-terpretation: §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
un-dercut 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.

															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. 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 pur-chase
insurance “has a substantial and deleterious effect on interstate
commerce” by creating the cost-shifting prob-lem. 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, more-over, is not
limited to regulation of an activity that by itself substantially
affects interstate commerce, but also extends 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 nec-essarily
fatal; there is a first time for everything. But sometimes “the
most telling indication of [a] severe con-stitutional problem
. . . is the lack of historical precedent” for Congress’s
action. Free Enterprise Fund v. Public Com pany
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 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 sustained”); 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
individ-uals 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
Con-gress to regulate individuals precisely because they are
doing nothing would open a new and potentially vast do-main to
congressional authority. Every day individuals do not do an
infinite number of things. In some cases they 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
im-posed 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 sim-ilar decisions of
others, would have had a substantial ef-fect 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 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 unconstitu-tional” 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 ris-ing rates of obesity
and rising medical spending,” and esti-mating 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 in-creased 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 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 Gov-ernment’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 tre-mendous 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 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 ex-plained, “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 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.

															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
ac-tivity finds no support in our precedent. We have said that
Congress can anticipate the effects on commerce of an
eco-nomic 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.

															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 in-surance 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 lack-ing to justify an
exception of the sort urged by the Gov- ernment. 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”—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 con-stitution,” it does not
license the exercise of any “great substantive and independent
power[s]” beyond those specifi-cally 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 use-ful’ 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
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); criminaliz- ing 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 con-trast,
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 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 re-forms. The
commerce power thus does not authorize the mandate. Accord, post, at 4–16 (joint opinion of Scalia, Kennedy, Thomas, and
Alito, JJ., dissenting).

															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 in-surance. 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. 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.

															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 Con-gress
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 challenges to the “Child Labor Tax” on the same day. In the
first, we held that a suit to enjoin collection of the so-called
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 Con-gress’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-of-state 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 designa-tion 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’ . . . 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 require-ments
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 pun-ishing 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 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, 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
regula-tory. 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 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 ren-der 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 ]

															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 pay-ment. 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.
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
per-sisted 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, 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. Macom-ber , 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 cir-cumstances—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 every- one must
pay simply for existing, and capitations are expressly contemplated
by the Constitution. The Court today holds that our Constitution
protects us from federal regulation under the Commerce Clause so
long as we ab-stain 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 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 individ-uals 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 se-vere burden that
taxation—especially taxation motivated by a regulatory purpose—can
impose. But imposition 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 in-dividuals pay a financial penalty for not obtaining
health insurance may reasonably be characterized as a tax. Be-cause
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 stat-ute 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 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 dis-abled. 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
“[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 man-date.
§§1396a(k)(1), 1396u–7(b)(5), 18022(b). The Af-fordable 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 in-crease 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 con-ditions 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 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
fed-eral 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
fed- eral 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 , 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 regu-latory 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 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
un-employment 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 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 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 “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 ]

															Here, the Government claims that the Medicaid
expansion is properly viewed merely as a modification of the
ex-isting 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, 86Stat. 1381–1382,
1465 (extending Med-icaid eligibility, but partly conditioning only
the new funding); Omnibus Budget Reconciliation Act of 1990, §4601,
104Stat. 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
de-signed to cover medical services for four particular cat-egories
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 universal 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 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
dis-cusses—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 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 ap-plication of §1396c to the existing
Medicaid program. Nor does it affect the Secretary’s ability to
withdraw funds pro-vided 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
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
administrative 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 con-strue 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
Con-gress’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: 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. Notes 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 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). 2 We 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. 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”). 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”). 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. 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. 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 policy is projected
to be around $400 per month. See D. Newman, CRS Report for
Congress, Individual Mandate and Related Information Re-quirements
Under PPACA 7, and n. 25 (2011). 9 We 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. 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 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. 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. 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 occu-pies, or the
extent to which the change preserves and works withinthe 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. 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. 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]

															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, alternatively, 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 national 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 pension plan for employees of carriers subject to the
Interstate 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 double. 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 Medicare and Medicaid Services,
Historic National Health Expenditure Data, National Health
Expenditures: Se- lected Calendar Years 1960–2010 (Table 1). Over a
lifetime, 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 upwards of $10,000. See Dept. of Health
and Human Services, 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 indicating 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 without
warning. Inescapably, we are all at peril of needing medical care
without a moment’s notice. See, e.g., Campbell, 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 medical care administered to U. S.
residents. See Congressional 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 government 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 individuals 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
insurance, 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 serious 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
embedded 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 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 insurance. 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 insurance 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 insurance 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 inability to pay. In
anticipation of this uncompensated care, health-care companies
raise their prices, and insurers their premiums. In other words,
because any uninsured 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 preventative 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 intervention. Id., at 43–44. The extra time and resources providers 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 Curiae in No. 11–398, p. 15
(noting that, in 2009, Massachusetts’ 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 increase 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 private enterprise or the States. Instead
of going this route, Congress enacted the ACA, a solution that
retains a robust role for private insurers and state governments.
To make its chosen approach work, however, Congress had to 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 recipients of
health care a financial incentive to acquire insurance. 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
purpose vital to Congress’ plan to reduce the number of uninsured.
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
companies took an applicant’s medical history into account when
setting insurance rates or deciding whether to insure an
individual. Because individuals with preexisting med- ical
conditions cost insurance companies significantly more than those
without such conditions, insurers routinely re- fused to insure
these individuals, charged them substantially 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 powerful
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 Jersey, Washington, Kentucky, Maine, New Hampshire, and
Vermont—enacted guaranteed-issue and community-rating laws without
requiring universal acquisition of insurance coverage. The results
were disastrous. “All seven states suffered from skyrocketing
insurance pre- mium costs, reductions in individuals with coverage,
and reductions in insurance products and providers.” Brief for
American Association of People with Disabilities et al. as Amici Curiae in No. 11–398, p. 9 (hereinafter AAPD
Brief). See also Brief for Governor of Washington Christine
Gregoire as Amicus Curiae in No. 11–398, pp. 11–14
(describing the “death spiral” in the insurance market Washington
experienced when the State passed a law requiring coverage for
preexisting conditions).

															Congress comprehended that guaranteed-issue and
community-rating laws alone will not work. When insurance companies
are required to insure the sick at affordable prices, individuals
can wait until they become ill to buy insurance. Pretty soon, those
in need of immediate medical care— i.e., those who cost
insurers the most—become the insurance companies’ main customers.
This “adverse selection” problem leaves insurers with two choices:
They can either raise premiums dramatically to cover their
ever-increasing costs or they can exit the market. In the seven
States that tried guaranteed-issue and community-rating
requirements without a minimum coverage provision, that is
precisely what insurance companies did. See, e.g., AAPD
Brief 10 (“[In Maine,] [m]any insurance providers doubled their
premiums in just three years or less.”); id., at 12 (“Like
New York, Vermont saw substantial increases in premiums after its
. . . insurance reform measures took effect in 1993.”);
Hall, An Evaluation of New York’s Reform Law, 25 J. Health Pol.
Pol’y & L. 71, 91–92 (2000) (Guaranteed-issue and
community-rating laws resulted in a “dramatic exodus of indemnity
insurers from New York’s individual [insurance] market.”); Brief
for Barry Friedman et al. as Amici Curiae in No.
11–398, p. 17 (“In Kentucky, all but two insurers (one
State-run) abandoned the State.”).

															Massachusetts, Congress was told, cracked the
adverse selection problem. By requiring most residents to obtain
insurance, see Mass. Gen. Laws, ch. 111M, §2 (West 2011), the
Commonwealth ensured that insurers would not be left with only the
sick as customers. As a result, federal lawmakers observed,
Massachusetts succeeded where other States had failed. See Brief
for Commonwealth of Massachusetts as Amicus Curiae in No.
11–398, p. 3 (noting that the Commonwealth’s reforms reduced
the number of uninsured residents to less than 2%, the lowest rate
in the Nation, and cut the amount of uncompensated care by a
third); 42 U. S. C. §18091(2)(D) (2006 ed., Supp. IV)
(noting the success of Massachusetts’ reforms).[ 2 ] In coupling the minimum coverage provision with
guaranteed-issue and community-rating prescriptions, Congress
followed Massachusetts’ lead.

															*  *  *

															In sum, Congress passed the minimum coverage
provision as a key component of the ACA to address an economic and
social problem that has plagued the Nation for decades: the large
number of U. S. residents who are unable or unwilling to
obtain health insurance. Whatever one thinks of the policy decision
Congress made, it was Congress’ prerogative to make it. Reviewed
with appropriate deference, the minimum coverage provision, allied
to the guaranteed-issue and community-rating prescriptions, should
survive measurement under the Commerce and Necessary and Proper
Clauses.

															II

															A

															The Commerce Clause, it is widely
acknowledged, “was the Framers’ response to the central problem
that gave rise to the Constitution itself.” EEOC v. Wyoming , 460 U.S.
226 , 244, 245, n. 1 (1983) (Stevens, J., concurring)
(citing sources). Under the Articles of Confederation, the
Constitution’s precursor, the regulation of commerce was left to
the States. This scheme proved unworkable, because the individual
States, understandably focused on their own economic interests,
often failed to take actions critical to the success of the Nation
as a whole. See Vices of the Political System of the United States,
in James Madison: Writings 69, 71, ¶5 (J. Rakove ed. 1999) (As a
result of the “want of concert in matters where common interest
requires it,” the “national dignity, interest, and reve- nue [have]
suffered.”).[ 3 ]

															What was needed was a “national Government
. . . armed with a positive & compleat authority in
all cases where uniform measures are necessary.” See Letter from
James Madison to Edmund Randolph (Apr. 8, 1787), in 9 Papers of
James Madison 368, 370 (R. Rutland ed. 1975). See also Letter from
George Washington to James Madison (Nov. 30, 1785), in 8 id., at 428, 429 (“We are either a United people, or we are
not. If the former, let us, in all matters of general concern act
as a nation, which ha[s] national objects to promote, and a
national character to support.”). The Framers’ solution was the
Commerce Clause, which, as they perceived it, granted Congress the
authority to enact economic legislation “in all Cases for the
general Interests of the Union, and also in those Cases to which
the States are separately incompetent.” 2 Records of the Federal
Convention of 1787, pp. 131–132, ¶8 (M. Farrand rev. 1966). See
also North American Co. v. SEC , 327 U.S.
686 , 705 (1946) (“[The commerce power] is an affirmative power
commensurate with the national needs.”).

															The Framers understood that the “general
Interests of the Union” would change over time, in ways they could
not anticipate. Accordingly, they recognized that the Constitution
was of necessity a “great outlin[e],” not a detailed blueprint, see McCulloch v. Maryland , 4 Wheat. 316, 407 (1819), and
that its provisions included broad concepts, to be “explained by
the context or by the facts of the case,” Letter from James Madison
to N. P. Trist (Dec. 1831), in 9 Writings of James Madison 471, 475
(G. Hunt ed. 1910). “Nothing . . . can be more
fallacious,” Alexander Hamilton emphasized, “than to infer the
extent of any power, proper to be lodged in the national
government, from . . . its immediate necessities. There
ought to be a capacity to provide for future contingencies[,] as
they may happen; and as these are illimitable in their nature, it
is impossible safely to limit that capacity.” The Federalist No.
34, pp. 205, 206 (John Harvard Library ed. 2009). See also McCulloch , 4 Wheat., at 415 (The Necessary and Proper Clause
is lodged “in a constitution[,] intended to endure for ages to
come, and consequently, to be adapted to the various crises of human affairs.”).

															B

															Consistent with the Framers’ intent, we have
repeatedly emphasized that Congress’ authority under the Commerce
Clause is dependent upon “practical” considerations, including
“actual experience.” Jones & Laughlin Steel Corp. , 301
U. S., at 41–42; see Wickard v. Filburn , 317 U.S.
111 , 122 (1942); United States v. Lopez , 514 U.S.
549 , 573 (1995) (Kennedy, J., concurring) (emphasizing “the
Court’s definitive commitment to the practical conception of the
commerce power”). See also North American Co. , 327
U. S., at 705 (“Commerce itself is an intensely practical
matter. To deal with it effectively, Congress must be able to act
in terms of economic and financial realities.” (citation omitted)).
We afford Congress the leeway “to undertake to solve national
problems directly and realistically.” American Power & Light
Co. v. SEC , 329 U.S.
90 , 103 (1946).

															Until today, this Court’s pragmatic approach to
judging whether Congress validly exercised its commerce power was
guided by two familiar principles. First, Congress has the power to
regulate economic activities “that substantially affect interstate
commerce.” Gonzales v. Raich , 545 U.S.
1 , 17 (2005). This capacious power extends even to local
activities that, viewed in the aggregate, have a substantial impact
on interstate commerce. See ibid. See also Wickard ,
317 U. S., at 125 (“[E]ven if appellee’s activ- ity 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.” (emphasis
added)); Jones & Laughlin Steel Corp. , 301 U. S.,
at 37.

															Second, we owe a large measure of respect to
Congress when it frames and enacts economic and social legislation.
See Raich , 545 U. S., at 17. See also Pension
Benefit Guaranty Corporation v. R. A. Gray &
Co. , 467 U.S.
717 , 729 (1984) (“[S]trong deference [is] accorded legislation
in the field of national economic policy.”); Hodel v. Indiana , 452 U.S.
314 , 326 (1981) (“This [C]ourt will certainly not substitute
its judgment for that of Congress unless the relation of the
subject to interstate commerce and its ef- fect upon it are clearly
non-existent.” (internal quotation marks omitted)). When appraising
such legislation, we ask only (1) whether Congress had a “rational
basis” for concluding that the regulated activity substantially
affects interstate commerce, and (2) whether there is a “reasonable
connection between the regulatory means selected and the asserted
ends.” Id., at 323–324. See also Raich , 545
U. S., at 22; Lopez , 514 U. S., at 557; Hodel v. Virginia Surface Mining & Reclamation Assn.,
Inc. , 452 U.S.
264 , 277 (1981); Katzenbach v. McClung , 379 U.S.
294 , 303 (1964); Heart of Atlanta Motel, Inc. v. United States , 379 U.S.
241 , 258 (1964); United States v. Carolene Products
Co. , 304 U.S.
144 , 152–153 (1938). In answering these questions, we presume
the statute under review is constitutional and may strike it down
only on a “plain showing” that Congress acted irrationally. United States v. Morrison , 529
U.S. 598 , 607 (2000).

															C

															Straightforward application of these
principles would require the Court to hold that the minimum
coverage provision is proper Commerce Clause legislation. Beyond
dispute, Congress had a rational basis for concluding that the
uninsured, as a class, substantially affect interstate commerce.
Those without insurance consume billions of dollars of health-care
products and services each year. See supra, at 5. Those
goods are produced, sold, and delivered largely by national and
regional companies who routinely transact business across state
lines. The uninsured also cross state lines to receive care. Some
have medical emergencies while away from home. Others, when sick,
go to a neighboring State that provides better care for those who
have not prepaid for care. See supra, at 7–8.

															Not only do those without insurance consume a
large amount of health care each year; critically, as earlier
explained, their inability to pay for a significant portion of that
consumption drives up market prices, foists costs on other
consumers, and reduces market efficiency and stability. See supra, at 5–7. Given these far-reaching effects on
interstate commerce, the decision to forgo insurance is hardly
inconsequential or equivalent to “doing nothing,” ante, at
20; it is, instead, an economic decision Congress has the authority
to address under the Commerce Clause. See supra, at 14–16.
See also Wickard , 317 U. S., at 128 (“It is well
established by decisions of this Court that the power to regulate
commerce includes the power to regulate the prices at which
commodities in that commerce are dealt in and practices
affecting such prices .” (emphasis added)).

															The minimum coverage provision, furthermore,
bears a “reasonable connection” to Congress’ goal of protecting the
health-care market from the disruption caused by individuals who
fail to obtain insurance. By requiring those who do not carry
insurance to pay a toll, the minimum coverage provision gives
individuals a strong incentive to insure. This incentive, Congress
had good reason to believe, would reduce the number of uninsured
and, correspondingly, mitigate the adverse impact the uninsured
have on the national health-care market.

															Congress also acted reasonably in requiring
uninsured individuals, whether sick or healthy, either to obtain
insurance or to pay the specified penalty. As earlier observed,
because every person is at risk of needing care at any moment, all
those who lack insurance, regardless of their current health
status, adversely affect the price of health care and health
insurance. See supra, at 6–7. Moreover, an
insurance-purchase requirement limited to those in need of
immediate care simply could not work. Insurance companies would
either charge these individuals prohibitively expensive premiums,
or, if community-rating regulations were in place, close up shop.
See supra, at 9–11. See also Brief for State of Maryland and
10 Other States et al. as Amici Curiae in No. 11–398,
p. 28 (hereinafter Maryland Brief) (“No insurance regime can
survive if people can opt out when the risk insured against is only
a risk, but opt in when the risk materializes.”).

															“[W]here we find that the legislators
. . . have a rational basis for finding a chosen
regulatory scheme necessary to the protection of commerce, our
investigation is at an end.” Katzenbach , 379 U. S., at
303–304. Congress’ enactment of the minimum coverage provision,
which addresses a specific interstate problem in a practical,
experience-informed manner, easily meets this criterion.

															D

															Rather than evaluating the constitutionality
of the minimum coverage provision in the manner established by our
precedents, The Chief Justice relies on a newly minted
constitutional doctrine. The commerce power does not, The Chief
Justice announces, permit Congress to “compe[l] individuals to
become active in commerce by purchasing a product.” Ante, at
20 (emphasis deleted).

															1

															a

															The Chief Justice’s novel constraint on
Congress’ commerce power gains no force from our precedent and for
that reason alone warrants disapprobation. See infra , at
23–27. But even assuming, for the moment, that Congress lacks
authority under the Commerce Clause to “compel individuals not
engaged in commerce to purchase an unwanted product,” ante, at 18, such a limitation would be inapplicable here. Everyone will,
at some point, consume health-care products and services. See supra, at 3. Thus, if The Chief Justice is correct that an
insurance-purchase requirement can be applied only to those who
“actively” consume health care, the minimum coverage provision fits
the bill.

															The Chief Justice does not dispute that all
U. S. residents participate in the market for health services
over the course of their lives. See ante, at 16 (“Everyone
will eventually need health care at a time and to an extent they
cannot predict.”). But, The Chief Justice insists, the uninsured
cannot be considered active in the market for health care, because
“[t]he proximity and degree of connection between the [uninsured
today] and [their] subsequent commercial activity is too lacking.” Ante, at 27.

															This argument has multiple flaws. First, more
than 60% of those without insurance visit a hospital or doctor’s
office each year. See supra, at 5. Nearly 90% will within
five years.[ 4 ] An uninsured’s
consumption of health care is thus quite proximate: It is virtually
certain to occur in the next five years and more likely than not to
occur this year.

															Equally evident, Congress has no way of
separating those uninsured individuals who will need emergency
medi- cal care today (surely their consumption of medical care is
sufficiently imminent) from those who will not need medical
services for years to come. No one knows when an emergency will
occur, yet emergencies involving the uninsured arise daily. To
capture individuals who unexpect- edly will obtain medical care in
the very near future, then, Congress needed to include individuals
who will not go to a doctor anytime soon. Congress, our decisions
instruct, has authority to cast its net that wide. See Perez v. United States , 402 U.S.
146 , 154 (1971) (“[W]hen it is necessary in order to prevent an
evil to make the law embrace more than the precise thing to be
prevented it may do so.” (internal quotation marks
omitted)).[ 5 ]

															Second, it is Congress’ role, not the Court’s,
to delineate the boundaries of the market the Legislature seeks to
regulate. The Chief Justice defines the health-care mar- ket as
including only those transactions that will occur either in the
next instant or within some (unspecified) proximity to the next
instant. But Congress could reasonably have viewed the market from
a long-term perspective, encompassing all transactions virtually
certain to occur over the next decade, see supra, at 19, not
just those occurring here and now.

															Third, contrary to The Chief Justice’s
contention, our precedent does indeed support “[t]he proposition
that Congress may dictate the conduct of an individual today
because of prophesied future activity.” Ante, at 26. In Wickard , the Court upheld a penalty the Federal Government
imposed on a farmer who grew more wheat than he was permitted to
grow under the Agricultural Adjustment Act of 1938 (AAA). 317
U. S., at 114–115. He could not be penalized, the farmer
argued, as he was growing the wheat for home consumption, not for
sale on the open market. Id., at 119. The Court rejected
this argument. Id., at 127–129. Wheat intended for home
consumption, the Court noted, “overhangs the market, and if induced
by rising prices, tends to flow into the market and check price
increases [intended by the AAA].” Id., at 128.

															Similar reasoning supported the Court’s judgment
in Raich , which upheld Congress’ authority to regulate
marijuana grown for personal use. 545 U. S., at 19. Homegrown
marijuana substantially affects the interstate mar- ket for
marijuana, we observed, for “the high demand in the interstate
market will [likely] draw such marijuana into that market.” Ibid. Our decisions thus acknowledge Congress’
authority, under the Commerce Clause, to direct the conduct of an
individual today (the farmer in Wickard , stopped from
growing excess wheat; the plaintiff in Raich , ordered to
cease cultivating marijuana) because of a prophesied future
transaction (the eventual sale of that wheat or marijuana in the
interstate market). Congress’ actions are even more rational in
this case, where the future activity (the consumption of medical
care) is certain to occur, the sole uncertainty being the time the
activity will take place.

															Maintaining that the uninsured are not active in
the health-care market, The Chief Justice draws an analogy to the
car market. An individual “is not ‘active in the car
market,’ ” The Chief Justice observes, simply because he or
she may someday buy a car. Ante, at 25. The analogy is
inapt. The inevitable yet unpredictable need for medical care and
the guarantee that emergency care will be provided when required
are conditions nonexistent in other markets. That is so of the
market for cars, and of the market for broccoli as well. Although
an individual might buy a car or a crown of broccoli one
day, there is no certainty she will ever do so. And if she
eventually wants a car or has a craving for broccoli, she will be
obliged to pay at the counter before receiving the vehicle or
nourishment. She will get no free ride or food, at the expense of
another consumer forced to pay an inflated price. See Thomas
More Law Center v. Obama , 651 F.3d 529, 565 (CA6 2011)
(Sutton, J., concurring in part) (“Regulating how citizens pay for
what they already receive (health care), never quite know when they
will need, and in the case of severe illnesses or emergencies
generally will not be able to afford, has few (if any) parallels in
modern life.”). Upholding the minimum coverage provision on the
ground that all are participants or will be participants in the
health-care market would therefore carry no implication that
Congress may justify under the Commerce Clause a mandate to buy
other products and services.

															Nor is it accurate to say that the minimum
coverage provision “compel[s] individuals . . . to
purchase an unwanted product,” ante, at 18, or “suite of
products,” post, at 11, n. 2 (joint opinion of Scalia,
Kennedy, Thomas, and Alito, JJ.). If unwanted today, medical
service secured by insurance may be desperately needed tomorrow.
Virtually everyone, I reiterate, consumes health care at some point
in his or her life. See supra, at 3. Health insurance is a
means of paying for this care, nothing more. In requiring
individuals to obtain insurance, Congress is therefore not
mandating the purchase of a discrete, unwanted product. Rather,
Congress is merely defining the terms on which individuals pay for
an interstate good they consume: Persons subject to the mandate
must now pay for medical care in advance (instead of at the point
of service) and through insurance (instead of out of pocket).
Establishing payment terms for goods in or affecting interstate
commerce is quintessential economic regulation well within
Congress’ domain. See, e.g., United States v. Wrightwood Dairy Co. , 315 U.S.
110 , 118 (1942). Cf. post, at 13 (joint opinion of
Scalia, Kennedy, Thomas, and Alito, JJ.) (recognizing that “the
Federal Government can prescribe [a commodity’s] quality
. . . and even [its price]”).

															The Chief Justice also calls the minimum
coverage provision an illegitimate effort to make young, healthy
individuals subsidize insurance premiums paid by the less hale and
hardy. See ante, at 17, 25–26. This complaint, too, is
spurious. Under the current health-care system, healthy persons who
lack insurance receive a benefit for which they do not pay: They
are assured that, if they need it, emergency medical care will be
available, although they cannot afford it. See supra, at
5–6. Those who have insurance bear the cost of this guarantee. See ibid. By requiring the healthy uninsured to obtain insurance
or pay a penalty structured as a tax, the minimum coverage
provision ends the free ride these individuals currently enjoy.

															In the fullness of time, moreover, today’s young
and healthy will become society’s old and infirm. Viewed over a
lifespan, the costs and benefits even out: The young who pay more
than their fair share currently will pay less than their fair share
when they become senior citizens. And even if, as undoubtedly will
be the case, some individuals, over their lifespans, will pay more
for health insurance than they receive in health services, they
have little to complain about, for that is how insurance works.
Every insured person receives protection against a catastrophic
loss, even though only a subset of the covered class will
ultimately need that protection.

															b

															In any event, The Chief Justice’s limitation
of the commerce power to the regulation of those actively engaged
in commerce finds no home in the text of the Constitution or our
decisions. Article I, §8, of the Constitution grants Congress the
power “[t]o regulate Commerce . . . among the several
States.” Nothing in this language im- plies that Congress’ commerce
power is limited to regu- lating those actively engaged in
commercial transactions. Indeed, as the D. C. Circuit
observed, “[a]t the time the Constitution was [framed], to
‘regulate’ meant,” among other things, “to require action.” See Seven-Sky v. Holder , 661 F.3d 1, 16 (2011).

															Arguing to the contrary, The Chief Justice notes
that “the Constitution gives Congress the power to ‘coin Money,’ in
addition to the power to ‘regulate the Value thereof,’ ” and
similarly “gives Congress the power 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.’ ” Ante, at 18–19 (citing Art. I, §8, cls.
5, 12–14). In separating the power to regulate from the power to
bring the subject of the regulation into existence, The Chief
Justice asserts, “[t]he language of the Constitution reflects the
natural understanding that the power to regulate assumes there is
already something to be regulated.” Ante, at 19.

															This argument is difficult to fathom. Requiring
individuals to obtain insurance unquestionably regulates the inter-
state health-insurance and health-care markets, both of them in
existence well before the enactment of the ACA. See Wickard ,
317 U. S., at 128 (“The stimulation of commerce is a use of
the regulatory function quite as definitely as prohibitions or
restrictions thereon.”). Thus, the “something to be regulated” was
surely there when Congress created the minimum coverage
provision.[ 6 ]

															Nor does our case law toe the activity versus
inactiv- ity line. In Wickard , for example, we upheld the
penalty imposed on a farmer who grew too much wheat, even though
the regulation had the effect of compelling farmers to purchase
wheat in the open market. Id., at 127–129. “[F]orcing some
farmers into the market to buy what they could provide for
themselves” was, the Court held, a valid means of regulating
commerce. Id., at 128–129. In an- other context, this Court
similarly upheld Congress’ authority under the commerce power to
compel an “inactive” land- holder to submit to an unwanted sale.
See Monongahela Nav. Co. v. United States , 148 U.S.
312 , 335–337 (1893) (“[U]pon the [great] power to regulate
commerce [,]” Congress has the authority to mandate the sale of
real prop- erty to the Government, where the sale is essential to
the improvement of a navigable waterway (emphasis added)); Cherokee Nation v. Southern Kansas R. Co. , 135 U.S.
641 , 657–659 (1890) (similar reliance on the commerce power
regarding mandated sale of private property for railroad
construction).

															In concluding that the Commerce Clause does not
permit Congress to regulate commercial “inactivity,” and there-
fore does not allow Congress to adopt the practical solution it
devised for the health-care problem, The Chief Justice views the
Clause as a “technical legal conception,” precisely what our case
law tells us not to do. Wickard , 317 U. S., at 122
(internal quotation marks omitted). See also supra, at
14–16. This Court’s former endeavors to impose categorical limits
on the commerce power have not fared well. In several pre-New Deal
cases, the Court attempted to cabin Congress’ Commerce Clause
authority by distinguishing “commerce” from activity once conceived
to be noncommercial, notably, “production,” “mining,” and
“manufacturing.” See, e.g., United States v. E. C. Knight
Co. , 156 U.S.
1 , 12 (1895) (“Commerce succeeds to manufacture, and is not a
part of it.”); Carter v. Carter Coal Co. , 298 U.S.
238 , 304 (1936) (“Mining brings the subject matter of commerce
into existence. Commerce disposes of it.”). The Court also sought
to distinguish activities having a “direct” effect on interstate
commerce, and for that reason, subject to federal regulation, from
those having only an “indirect” effect, and therefore not amenable
to federal control. See, e.g., A. L. A. Schechter Poultry
Corp. v. United States , 295 U.S.
495 , 548 (1935) (“[T]he dis- tinction between direct and
indirect effects of intrastate transactions upon interstate
commerce must be recognized as a fundamental one.”).

															These line-drawing exercises were untenable, and
the Court long ago abandoned them. “[Q]uestions of the power of
Congress [under the Commerce Clause],” we held in Wickard ,
“are not to be decided by reference to any for- mula which would
give controlling force to nomenclature such as ‘production’ and
‘indirect’ and foreclose consideration of the actual effects of the
activity in question upon interstate commerce.” 317 U. S., at
120. See also Morrison , 529 U. S., at 641–644 (Souter,
J., dissenting) (recounting the Court’s “nearly disastrous
experiment” with formalistic limits on Congress’ commerce power).
Failing to learn from this history, The Chief Justice plows ahead
with his formalistic distinction between those who are “active in
commerce,” ante, at 20, and those who are not.

															It is not hard to show the difficulty courts
(and Congress) would encounter in distinguishing statutes that reg-
ulate “activity” from those that regulate “inactivity.” As Judge
Easterbrook noted, “it is possible to restate most actions as
corresponding inactions with the same effect.” Archie v. Racine , 847 F.2d 1211, 1213 (CA7 1988) (en banc). Take this
case as an example. An individual who opts not to purchase
insurance from a private insurer can be seen as actively selecting
another form of insurance: self-insurance. See Thomas More Law
Center , 651 F. 3d, at 561 (Sutton, J., concurring in part)
(“No one is in- active when deciding how to pay for health care, as
self-insurance and private insurance are two forms of action for
addressing the same risk.”). The minimum coverage provision could
therefore be described as regulating activists in the
self-insurance market.[ 7 ] Wickard is another example. Did the statute there at issue
target activity (the growing of too much wheat) or inactivity (the
farmer’s failure to purchase wheat in the marketplace)? If
anything, the Court’s analysis suggested the latter. See 317
U. S., at 127–129.

															At bottom, The Chief Justice’s and the joint
dissenters’ “view that an individual cannot be subject to Commerce
Clause regulation absent voluntary, affirmative acts that enter him
or her into, or affect, the interstate mar- ket expresses a concern
for individual liberty that [is] more redolent of Due Process
Clause arguments.” Seven-Sky , 661 F. 3d, at 19. See
also Troxel v. Granville , 530 U.S.
57 , 65 (2000) (plurality opinion) (“The [Due Process] Clause
also includes a substantive component that provides heightened
protection against government interference with certain fundamental
rights and liberty interests.” (internal quotation marks omitted)).
Plaintiffs have abandoned any argument pinned to substantive due
process, however, see 648 F.3d 1235, 1291, n. 93 (CA11 2011), and
now concede that the provisions here at issue do not offend the Due
Process Clause.[ 8 ]

															2

															Underlying The Chief Justice’s view that the
Commerce Clause must be confined to the regulation of active
participants in a commercial market is a fear that the commerce
power would otherwise know no limits. See, e.g., ante , at 23
(Allowing Congress to compel an individ- ual not engaged in
commerce to purchase a product would “permi[t] 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.” (internal quotation marks omitted)). The joint
dissenters express a similar apprehension. See post, at 8
(If the minimum coverage provision is upheld under the commerce
power then “the Commerce Clause becomes a font of unlimited power,
. . . the hideous monster whose devouring jaws
. . . spare neither sex nor age, nor high nor low, nor
sacred nor profane.” (internal quotation marks omitted)). This
concern is unfounded.

															First, The Chief Justice could certainly uphold
the individual mandate without giving Congress carte blanche to enact any and all purchase mandates. As several times noted, the
unique attributes of the health-care market render everyone active
in that market and give rise to a significant free-riding problem
that does not occur in other markets. See supra, at 3–7,
16–18, 21.

															Nor would the commerce power be unbridled,
absent The Chief Justice’s “activity” limitation. Congress would
remain unable to regulate noneconomic conduct that has only an
attenuated effect on interstate commerce and is traditionally left
to state law. See Lopez , 514 U. S., at 567; Morrison , 529 U. S., at 617–619. In Lopez , for
example, the Court held that the Federal Government lacked power,
under the Commerce Clause, to criminalize the possession of a gun
in a local school zone. Possessing a gun near a school, the Court
reasoned, “is in no sense an economic activity that might, through
repetition elsewhere, substantially affect any sort of interstate
commerce.” 514 U. S., at 567; ibid. (noting that the
Court would have “to pile inference upon inference” to conclude
that gun possession has a substantial effect on commerce). Relying
on similar logic, the Court concluded in Morrison that
Congress could not regulate gender-motivated violence, which the
Court deemed to have too “attenuated [an] effect upon interstate
commerce.” 529 U. S., at 615.

															An individual’s decision to self-insure, I have
explained, is an economic act with the requisite connection to
interstate commerce. See supra, at 16–17. Other choices
individuals make are unlikely to fit the same or similar
description. As an example of the type of regulation he fears, The
Chief Justice cites a Government mandate to purchase green
vegetables. Ante, at 22–23. One could call this concern “the
broccoli horrible.” Congress, The Chief Justice posits, might adopt
such a mandate, reasoning that an individual’s failure to eat a
healthy diet, like the failure to purchase health insurance,
imposes costs on others. See ibid. Consider the chain of inferences the Court would
have to accept to conclude that a vegetable-purchase mandate was
likely to have a substantial effect on the health-care costs borne
by lithe Americans. The Court would have to believe that
individuals forced to buy vegetables would then eat them (instead
of throwing or giving them away), would prepare the vegetables in a
healthy way (steamed or raw, not deep-fried), would cut back on
unhealthy foods, and would not allow other factors (such as lack of
exercise or little sleep) to trump the improved diet.[ 9 ] Such “pil[ing of] inference upon
inference” is just what the Court refused to do in Lopez and Morrison .

															Other provisions of the Constitution also check
congressional overreaching. A mandate to purchase a particu- lar
product would be unconstitutional if, for example, the edict
impermissibly abridged the freedom of speech, interfered with the
free exercise of religion, or infringed on a liberty interest
protected by the Due Process Clause.

															Supplementing these legal restraints is a
formidable check on congressional power: the democratic process.
See Raich , 545 U. S., at 33; Wickard , 317
U. S., at 120 (repeating Chief Justice Marshall’s “warning
that effective restraints on [the commerce power’s] exercise must
proceed from political rather than judicial processes” (citing Gibbons v. Ogden , 9 Wheat. 1, 197 (1824)). As the
controversy surrounding the passage of the Affordable Care Act
attests, purchase mandates are likely to engender political
resistance. This prospect is borne out by the behavior of state
legislators. Despite their possession of unquestioned authority to
impose mandates, state governments have rarely done so. See Hall,
Commerce Clause Challenges to Health Care Reform, 159 U. Pa.
L. Rev. 1825, 1838 (2011).

															When contemplated in its extreme, almost any
power looks dangerous. The commerce power, hypothetically, would
enable Congress to prohibit the purchase and home production of all
meat, fish, and dairy goods, effectively compelling Americans to
eat only vegetables. Cf. Raich , 545 U. S., at 9; Wickard , 317 U. S., at 127–129. Yet no one would offer
the “hypothetical and unreal possibilit[y],” Pullman Co. v. Knott , 235 U.S.
23 , 26 (1914), of a vegetarian state as a credible reason to
deny Congress the authority ever to ban the possession and sale of
goods. The Chief Justice accepts just such specious logic when he
cites the broccoli horrible as a reason to deny Congress the power
to pass the individual mandate. Cf. R. Bork, The Tempting of
America 169 (1990) (“Judges and lawyers live on the slippery slope
of analogies; they are not supposed to ski it to the bottom.”). But
see, e.g., post, at 3 (joint opinion of Scalia, Kennedy,
Thomas, and Alito, JJ.) (asserting, outlandishly, that if the
minimum coverage provision is sustained, then Congress could make
“breathing in and out the basis for federal prescription”).

															3

															To bolster his argument that the minimum
coverage provision is not valid Commerce Clause legislation, The
Chief Justice emphasizes the provision’s novelty. See ante, at 18 (asserting that “sometimes the most telling indication of [a]
severe constitutional problem . . . is the lack of
historical precedent for Congress’s action” (internal quotation
marks omitted)). While an insurance-purchase mandate may be novel,
The Chief Justice’s argument certainly is not. “[I]n almost every
instance of the exer- cise of the [commerce] power differences are
asserted from previous exercises of it and made a ground of
attack.” Hoke v. United States , 227 U.S.
308 , 320 (1913). See, e.g., Brief for Petitioner in Perez v. United States , O. T. 1970, No. 600,
p. 5 (“unprecedented exercise of power”); Sup- plemental Brief
for Appellees in Katzenbach v. McClung , O. T.
1964, No. 543, p. 40 (“novel assertion of federal power”);
Brief for Appellee in Wickard v. Filburn , O. T.
1941, No. 59, p. 6 (“complete departure”). For decades, the
Court has declined to override legislation because of its novelty,
and for good reason. As our national economy grows and changes, we
have recognized, Congress must adapt to the changing “economic and
financial realities.” See supra, at 14–15. Hindering
Congress’ ability to do so is shortsighted; if history is any
guide, today’s constriction of the Commerce Clause will not endure.
See supra, at 25–26.

															III

															A

															For the reasons explained above, the minimum
coverage provision is valid Commerce Clause legislation. See supra, Part II. When viewed as a component of the entire
ACA, the provision’s constitutionality becomes even plainer.

															The Necessary and Proper Clause “empowers
Congress to enact laws in effectuation of its [commerce] powe[r]
that are not within its authority to enact in isolation.” Raich , 545 U. S., at 39 (Scalia, J., concurring in
judgment). Hence, “[a] complex regulatory program . . .
can survive a Commerce Clause challenge without a showing that
every single facet of the program is independently and directly
related to a valid congressional goal.” Indiana , 452
U. S., at 329, n. 17. “It is enough that the challenged
provisions are an integral part of the regulatory program and that
the regulatory scheme when considered as a whole satisfies this
test.” Ibid. (collecting cases). See also Raich , 545
U. S., at 24–25 (A challenged statutory provision fits within
Congress’ commerce authority if it is an “essential par[t] of a
larger regulation of economic activity,” such that, in the absence
of the provision, “the regulatory scheme could be undercut.”
(quoting Lopez , 514 U. S., at 561)); Raich , 545
U. S., at 37 (Scalia, J., concurring in judgment) (“Congress
may regulate even noneconomic local activity if that regulation is
a necessary part of a more general regulation of interstate
commerce. The relevant question is simply whether the means chosen
are ‘reasonably adapted’ to the attainment of a legitimate end
under the commerce power.” (citation omitted)).

															Recall that one of Congress’ goals in enacting
the Affordable Care Act was to eliminate the insurance industry’s
practice of charging higher prices or denying coverage to
individuals with preexisting medical conditions. See supra, at 9–10. The commerce power allows Congress to ban this practice, a
point no one disputes. See United States v. South-Eastern
Underwriters Assn. , 322 U.S.
533 , 545, 552–553 (1944) (Congress may regulate “the methods by
which interstate insurance companies do business.”).

															Congress knew, however, that simply barring
insurance companies from relying on an applicant’s medical history
would not work in practice. Without the individual mandate,
Congress learned, guaranteed-issue and community-rating
requirements would trigger an adverse-selection death-spiral in the
health-insurance market: Insurance premiums would skyrocket, the
number of uninsured would increase, and insurance companies would
exit the market. See supra, at 10–11 . When
complemented by an insurance mandate, on the other hand, guaranteed
issue and community rating would work as intended, increasing
access to insurance and reducing uncompensated care. See supra, at 11–12. The minimum coverage provision is thus an
“essential par[t] of a larger regulation of economic activity”;
without the provision, “the regulatory scheme [w]ould be undercut.” Raich , 545 U. S., at 24–25 (inter- nal quotation marks
omitted). Put differently, the minimum coverage provision, together
with the guaranteed-issue and community-rating requirements, is
“ ‘reasonably adapted’ to the attainment of a legitimate end
under the commerce power”: the elimination of pricing and sales
practices that take an applicant’s medical history into account.
See id., at 37 (Scalia, J., concurring in judgment).

															B

															Asserting that the Necessary and Proper Clause
does not authorize the minimum coverage provision, The Chief
Justice focuses on the word “proper.” A mandate to purchase health
insurance is not “proper” legislation, The Chief Justice urges,
because the command “undermine[s] the structure of government
established by the Constitution.” Ante, at 28. If long on
rhetoric, The Chief Justice’s argument is short on substance.

															The Chief Justice cites only two cases in which
this Court concluded that a federal statute impermissibly
transgressed the Constitution’s boundary between state and federal
authority: Printz v. United States , 521 U.S.
898 (1997), and New York v. United States , 505 U.S.
144 (1992). See ante, at 29. The statutes at issue in
both cases, however, compelled state officials to act on the
Federal Government’s behalf. 521 U. S., at 925–933 (holding
unconstitutional a statute obligating state law enforcement
officers to implement a federal gun-control law); New York ,
505 U. S., at 176–177 (striking down a statute requiring state
legislators to pass regulations pursuant to Congress’
instructions). “[Federal] laws conscripting state officers,” the
Court reasoned, “violate state sovereignty and are thus not in
accord with the Constitution.” Printz, 521 U. S., at
925, 935; New York , 505 U. S., at 176.

															The minimum coverage provision, in contrast,
acts “directly upon individuals, without employing the States as
intermediaries.” New York , 505 U. S., at 164. The
provision is thus entirely consistent with the Consti- tution’s
design. See Printz , 521 U. S., at 920 (“[T]he Framers
explicitly chose a Constitution that confers upon Congress the
power to regulate individuals, not States.” (internal quotation
marks omitted)).

															Lacking case law support for his holding, The
Chief Justice nevertheless declares the minimum coverage provision
not “proper” because it is less “narrow in scope” than other laws
this Court has upheld under the Necessary and Proper Clause. Ante, at 29 (citing United States v. Comstock ,
560 U. S. ___ (2010); Sabri v. United States , 541 U.S.
600 (2004); Jinks v. Richland County , 538 U.S.
456 (2003)). The Chief Justice’s reliance on cases in which
this Court has affirmed Congress’ “broad authority to enact
federal legislation” under the Necessary and Proper Clause, Comstock , 560 U. S., at ___ (slip op., at 5), is
underwhelming.

															Nor does The Chief Justice pause to explain why the power to direct either the purchase of health
insurance or, alternatively, the payment of a penalty collectible
as a tax is more far-reaching than other implied powers this Court
has found meet under the Necessary and Proper Clause. These powers
include the power to enact criminal laws, see, e.g., United
States v. Fox , 95 U.S.
670 , 672 (1878); the power to imprison, including civil
imprisonment, see, e.g., Comstock , 560 U. S., at ___
(slip op., at 1); and the power to create a national bank, see McCulloch , 4 Wheat., at 425. See also Jinks , 538
U. S., at 463 (affirming Congress’ power to alter the way a
state law is applied in state court, where the alteration “promotes
fair and efficient operation of the federal courts”).[ 10 ]

															In failing to explain why the individual mandate
threatens our constitutional order, The Chief Justice disserves
future courts. How is a judge to decide, when ruling on the
constitutionality of a federal statute, whether Congress employed
an “independent power,” ante, at 28, or merely a
“derivative” one, ante, at 29. Whether the power used is
“substantive,” ante, at 30, or just “incidental,” ante, at 29? The instruction The Chief Justice, in effect,
provides lower courts: You will know it when you see it.

															It is more than exaggeration to suggest that the
minimum coverage provision improperly intrudes on “essential
attributes of state sovereignty.” Ibid. (internal quotation
marks omitted). First, the Affordable Care Act does not operate “in
[an] are[a] such as criminal law enforcement or education where
States historically have been sovereign.” Lopez , 514
U. S., at 564. As evidenced by Medicare, Medicaid, the
Employee Retirement Income Security Act of 1974 (ERISA), and the
Health Insurance Portability and Accountability Act of 1996
(HIPAA), the Federal Government plays a lead role in the
health-care sector, both as a direct payer and as a regulator.

															Second, and perhaps most important, the minimum
coverage provision, along with other provisions of the ACA,
addresses the very sort of interstate problem that made the
commerce power essential in our federal system. See supra, at 12–14. The crisis created by the large number of U. S.
residents who lack health insurance is one of national dimension
that States are “separately incompetent” to handle. See supra, at 7–8, 13. See also Maryland Brief 15–26 (describing
“the impediments to effective state policymaking that flow from the
interconnectedness of each state’s healthcare economy” and
emphasizing that “state-level reforms cannot fully address the
problems associated with uncompensated care”). Far from trampling
on States’ sovereignty, the ACA attempts a federal solution for the
very reason that the States, acting separately, cannot meet the
need. Notably, the ACA serves the general welfare of the people of
the United States while retaining a prominent role for the States.
See id., at 31–36 (explaining and illustrating how the ACA
affords States wide latitude in implementing key elements of the
Act’s reforms).[ 11 ]

															IV

															In the early 20th century, this Court
regularly struck down economic regulation enacted by the peoples’
representatives in both the States and the Federal Government. See, e.g., Carter Coal Co. , 298 U. S., at 303–304, 309–310; Dagenhart , 247 U. S., at 276–277; Lochner v. New York , 198 U.S.
45 , 64 (1905). The Chief Justice’s Commerce Clause opinion, and
even more so the joint dissenters’ reasoning, see post, at
4–16, bear a disquieting resemblance to those long-overruled
decisions.

															Ultimately, the Court upholds the individual
mandate as a proper exercise of Congress’ power to tax and spend
“for the . . . general Welfare of the United States.”
Art. I, §8, cl. 1; ante, at 43–44. I concur in
that determination, which makes The Chief Justice’s Commerce Clause
essay all the more puzzling. Why should The Chief Justice strive so
mightily to hem in Congress’ capacity to meet the new problems
arising constantly in our ever-developing modern economy? I find no
satisfying response to that question in his opinion.[ 12 ]

															V

															Through Medicaid, Congress has offered the
States an opportunity to furnish health care to the poor with the
aid of federal financing. To receive federal Medicaid funds, States
must provide health benefits to specified categories of needy
persons, including pregnant women, children, parents, and adults
with disabilities. Guaranteed eligibility varies by category: for
some it is tied to the federal poverty level (incomes up to 100% or
133%); for others it depends on criteria such as eligibility for
designated state or federal assistance programs. The ACA enlarges
the population of needy people States must cover to include adults
under age 65 with incomes up to 133% of the fed- eral poverty
level. The spending power conferred by the Constitution, the Court
has never doubted, permits Congress to define the contours of
programs financed with federal funds. See, e.g., Pennhurst State
School and Hospital v. Halderman , 451 U.S.
1 , 17 (1981). And to expand coverage, Congress could have
recalled the existing legislation, and replaced it with a new law
making Medicaid as embracive of the poor as Congress chose.

															The question posed by the 2010 Medicaid
expansion, then, is essentially this: To cover a notably larger
population, must Congress take the repeal/reenact route, or may it
achieve the same result by amending existing law? The answer should
be that Congress may expand by amendment the classes of needy
persons entitled to Medicaid benefits. A ritualistic requirement
that Congress repeal and reenact spending legislation in order to
enlarge the population served by a federally funded program would
advance no constitutional principle and would scarcely serve the
interests of federalism. To the contrary, such a requirement would
rigidify Congress’ efforts to empower States by partnering with
them in the implementation of federal programs.

															Medicaid is a prototypical example of
federal-state cooperation in serving the Nation’s general welfare.
Rather than authorizing a federal agency to administer a uni- form
national health-care system for the poor, Con- gress offered States
the opportunity to tailor Medicaid grants to their particular
needs, so long as they remain within bounds set by federal law. In
shaping Medicaid, Congress did not endeavor to fix permanently the
terms participating states must meet; instead, Congress reserved
the “right to alter, amend, or repeal” any provision of the
Medicaid Act. 42 U. S. C. §1304. States, for their part,
agreed to amend their own Medicaid plans consistent with changes
from time to time made in the federal law. See 42 CFR §430.12(c)(i)
(2011). And from 1965 to the present, States have regularly
conformed to Congress’ alterations of the Medicaid Act.

															The Chief Justice acknowledges that Congress may
“condition the receipt of [federal] funds on the States’ complying
with restrictions on the use of those funds,” ante , at 50,
but nevertheless concludes that the 2010 expansion is unduly
coercive. His conclusion rests on three premises, each of them
essential to his theory. First, the Medicaid expansion is, in The
Chief Justice’s view, a new grant program, not an addition to the
Medicaid program existing before the ACA’s enactment. Congress, The
Chief Justice maintains, has threatened States with the loss of
funds from an old program in an effort to get them to adopt a new
one. Second, the expansion was unforeseeable by the States when
they first signed on to Medicaid. Third, the threatened loss of
funding is so large that the States have no real choice but to
participate in the Medicaid expansion. The Chief Justice
therefore— for the first time ever —finds an exercise of
Congress’ spending power unconstitutionally coercive.

															Medicaid, as amended by the ACA, however, is not
two spending programs; it is a single program with a constant
aim—to enable poor persons to receive basic health care when they
need it. Given past expansions, plus express statutory warning that
Congress may change the requirements participating States must
meet, there can be no tenable claim that the ACA fails for lack of
notice. Moreover, States have no entitlement to receive any
Medicaid funds; they enjoy only the opportunity to accept funds on
Congress’ terms. Future Congresses are not bound by their
predecessors’ dispositions; they have authority to spend federal
revenue as they see fit. The Federal Government, therefore, is not,
as The Chief Justice charges, threatening States with the loss of
“existing” funds from one spending program in order to induce them
to opt into another program. Congress is simply requiring States to
do what States have long been required to do to receive Medicaid
funding: comply with the conditions Congress prescribes for
participation.

															A majority of the Court, however, buys the
argument that prospective withholding of funds formerly available
exceeds Congress’ spending power. Given that holding, I entirely
agree with The Chief Justice as to the appropriate remedy. It is to
bar the withholding found impermissible—not, as the joint
dissenters would have it, to scrap the expansion altogether, see post, at 46–48. The dissenters’ view that the ACA must fall
in its entirety is a radical departure from the Court’s normal
course. When a constitutional infirmity mars a statute, the Court
ordinarily removes the infirmity. It undertakes a salvage
operation; it does not demolish the legislation. See, e.g.,
Brockett v. Spokane Arcades, Inc. , 472 U.S.
491 , 504 (1985) (Court’s normal course is to declare a statute
invalid “to the extent that it reaches too far, but otherwise [to
leave the statute] intact”). That course is plainly in order where,
as in this case, Congress has expressly instructed courts to leave
untouched every provision not found invalid. See 42
U. S. C. §1303. Because The Chief Justice finds the
withholding—not the granting—of federal funds incom- patible with
the Spending Clause, Congress’ extension of Medicaid remains
available to any State that affirms its willingness to
participate.

															A

															Expansion has been characteristic of the
Medicaid program. Akin to the ACA in 2010, the Medicaid Act as
passed in 1965 augmented existing federal grant programs jointly
administered with the States.[ 13 ] States were not required to participate in Medicaid.
But if they did, the Federal Government paid at least half the
costs. To qual- ify for these grants, States had to offer a minimum
level of health coverage to beneficiaries of four federally funded,
state-administered welfare programs: Aid to Families with Dependent
Children; Old Age Assistance; Aid to the Blind; and Aid to the
Permanently and Totally Disabled. See Social Security Amendments of
1965, §121(a), 79Stat. 343; Schweiker v. Gray
Panthers , 453 U.S.
34 , 37 (1981). At their option, States could enroll additional
“medically needy” individuals; these costs, too, were partially
borne by the Federal Government at the same, at least 50%, rate. Ibid. Since 1965, Congress has amended the Medicaid
program on more than 50 occasions, sometimes quite sizably. Most
relevant here, between 1988 and 1990, Congress required
participating States to include among their beneficiaries pregnant
women with family incomes up to 133% of the federal poverty level,
children up to age 6 at the same income levels, and children ages 6
to 18 with family incomes up to 100% of the poverty level. See 42
U. S. C. §§1396a(a)(10)(A)(i), 1396a( l ); Medicare
Catastrophic Cov- erage Act of 1988, §302, 102Stat. 750; Omnibus
Budget Reconciliation Act of 1989, §6401, 103Stat. 2258; Om- nibus
Budget Reconciliation Act of 1990, §4601, 104Stat. 1388–166. These
amendments added millions to the Medicaid-eligible population.
Dubay & Kenney, Lessons from the Medicaid Expansions for
Children and Pregnant Women 5 (Apr. 1997).

															Between 1966 and 1990, annual federal Medicaid
spending grew from $631.6 million to $42.6 billion; state spending
rose to $31 billion over the same period. See Dept. of Health and
Human Services, National Health Expenditures by Type of Service and
Source of Funds: Calendar Years 1960 to 2010 (table).[ 14 ] And between 1990 and 2010,
federal spending increased to $269.5 billion. Ibid. Enlargement of the population and services covered by Medicaid, in
short, has been the trend.

															Compared to past alterations, the ACA is notable
for the extent to which the Federal Government will pick up the
tab. Medicaid’s 2010 expansion is financed largely by federal
outlays. In 2014, federal funds will cover 100% of the costs for
newly eligible beneficiaries; that rate will gradually decrease
before settling at 90% in 2020. 42 U. S. C. §1396d(y)
(2006 ed., Supp. IV). By comparison, federal contributions toward
the care of beneficiaries eligible pre-ACA range from 50% to 83%,
and averaged 57% between 2005 and 2008. §1396d(b) (2006 ed., Supp.
IV); Dept. of Health and Human Services, Centers for Medicare and
Medicaid Services, C. Truffer et al., 2010 Actuarial Report on
the Financial Outlook for Medicaid, p. 20.

															Nor will the expansion exorbitantly increase
state Medicaid spending. The Congressional Budget Office (CBO)
projects that States will spend 0.8% more than they would have,
absent the ACA. See CBO, Spending & Enrollment Detail for CBO’s
March 2009 Baseline. But see ante , at 44–45 (“[T]he Act
dramatically increases state obligations under Medicaid.”); post, at 45 (joint opinion of Scalia, Kennedy, Thomas, and
Alito, JJ.) (“[A]cceptance of the [ACA expansion] will impose very
substantial costs on participating States.”). Whatever the increase
in state obligations after the ACA, it will pale in comparison to
the increase in federal funding.[ 15 ]

															Finally, any fair appraisal of Medicaid would
require acknowledgment of the considerable autonomy States enjoy
under the Act. Far from “conscript[ing] state agencies into the
national bureaucratic army,” ante , at 55 (citing FERC v. Mississippi , 456 U.S.
742 , 775 (1982) (O’Connor, J., concurring in judgment in part
and dissenting in part) (brackets in original and internal
quotation marks omitted)), Medicaid “is designed to advance
cooperative federalism.” Wisconsin Dept. of Health and Family
Servs. v. Blumer , 534 U.S.
473 , 495 (2002) (citing Harris v. McRae , 448 U.S.
297 , 308 (1980)). Subject to its basic requirements, the
Medicaid Act empowers States to “select dramatically different
levels of funding and coverage, alter and experiment with different
financing and delivery modes, and opt to cover (or not to cover) a
range of parti- cular procedures and therapies. States have
leveraged this policy discretion to generate a myriad of
dramatically different Medicaid programs over the past several
decades.” Ruger, Of Icebergs and Glaciers, 75 Law & Contemp.
Probs. 215, 233 (2012) (footnote omitted). The ACA does not
jettison this approach. States, as first-line administrators, will
continue to guide the distribution of substantial resources among
their needy populations.

															The alternative to conditional federal spending,
it bears emphasis, is not state autonomy but state
marginalization.[ 16 ] In
1965, Congress elected to nationalize health coverage for seniors
through Medicare. It could similarly have established Medicaid as
an exclusively federal program. Instead, Congress gave the States
the opportunity to partner in the program’s administration and
development. Absent from the nationalized model, of course, is the
state-level policy discretion and experimentation that is
Medicaid’s hallmark; undoubtedly the interests of federalism are
better served when States retain a meaning- ful role in the
implementation of a program of such importance. See Caminker, State
Sovereignty and Sub- ordinacy, 95 Colum. L. Rev. 1001,
1002–1003 (1995) (coopera- tive federalism can preserve “a
significant role for state discretion in achieving specified
federal goals, where the alternative is complete federal preemption
of any state regulatory role”); Rose-Ackerman, Cooperative
Federalism and Co-optation, 92 Yale L. J. 1344, 1346 (1983) (“If
the federal government begins to take full responsibility for
social welfare spending and preempts the states, the result is
likely to be weaker . . . state governments.”).[ 17 ]

															Although Congress “has no obligation to use its
Spending Clause power to disburse funds to the States,” College
Savings Bank v. Florida Prepaid Postsecondary Ed. Expense
Bd. , 527 U.S.
666 , 686 (1999), it has provided Medicaid grants notable for
their generosity and flexibility. “[S]uch funds,” we once observed,
“are gifts,” id., at 686–687, and so they have remained
through decades of expansion in their size and scope.

															B

															The Spending Clause authorizes Congress “to
pay the Debts and provide for the . . . general Welfare
of the United States.” Art. I, §8, cl. 1. To ensure that
federal funds granted to the States are spent “to ‘provide for the
. . . general Welfare’ in the manner Congress intended,” ante , at 46, Congress must of course have authority to
impose limitations on the States’ use of the federal dollars. This
Court, time and again, has respected Congress’ prescription of
spending conditions, and has required States to abide by them. See, e.g., Pennhurst , 451 U. S., at 17 (“[O]ur cases have long
recognized that Congress may fix the terms on which it shall
disburse federal money to the States.”). In particular, we have
recognized Congress’ prerogative to condition a State’s receipt of
Medicaid funding on compliance with the terms Congress set for
participation in the program. See, e.g., Harris , 448
U. S., at 301 (“[O]nce a State elects to participate [in
Medicaid], it must comply with the requirements of [the Medicaid
Act].”); Arkansas Dept. of Health and Human Servs. v. Ahlborn , 547 U.S.
268 , 275 (2006); Frew v. Hawkins , 540 U.S. 431,
433 (2004); Atkins v. Rivera , 477
U.S. 154 , 156–157 (1986).

															Congress’ authority to condition the use of
federal funds is not confined to spending programs as first
launched. The legislature may, and often does, amend the law,
imposing new conditions grant recipients henceforth must meet in
order to continue receiving funds. See infra , at 54
(describing Bennett v. Kentucky Dept. of Ed. , 470
U.S. 656 , 659–660 (1985) (enforcing restriction added five
years after adoption of educational program)).

															Yes, there are federalism-based limits on the
use of Congress’ conditional spending power. In the leading
decision in this area, South Dakota v. Dole , 483 U.S.
203 (1987), the Court identified four criteria. The conditions
placed on federal grants to States must (a) promote the “general
welfare,” (b) “unambiguously” inform States what is demanded of
them, (c) be germane “to the federal interest in particular
national projects or programs,” and (d) not “induce the States to
engage in activities that would themselves be unconstitutional.” Id. , at 207–208, 210 (internal quotation marks
omitted).[ 18 ]

															The Court in Dole mentioned, but did not
adopt, a further limitation, one hypothetically raised a
half-century earlier: In “some circumstances,” Congress might be
prohibited from offering a “financial inducement . . . so
coercive as to pass the point at which ‘pressure turns into
compulsion.’ ” Id., at 211 (quoting Steward Machine
Co. v. Davis , 301 U.S.
548 , 590 (1937)). Prior to today’s decision, however, the Court
has never ruled that the terms of any grant crossed the indistinct
line between temptation and coercion. Dole involved the National Minimum
Drinking Age Act, 23 U. S. C. §158, enacted in 1984. That
Act directed the Secretary of Transportation to withhold 5% of the
federal highway funds otherwise payable to a State if the State
permitted purchase of alcoholic beverages by persons less than 21
years old. Drinking age was not within the authority of Congress to
regulate, South Dakota argued, because the Twenty-First Amendment
gave the States exclusive power to control the manufacture,
transportation, and consumption of alcoholic beverages. The small
percentage of highway-construction funds South Dakota stood to lose
by adhering to 19 as the age of eligibility to purchase 3.2% beer,
however, was not enough to qualify as coercion, the Court
concluded.

															This case does not present the concerns that led
the Court in Dole even to consider the prospect of coercion.
In Dole , the condition—set 21 as the minimum drinking age—
did not tell the States how to use funds Congress pro- vided for
highway construction. Further, in view of the Twenty-First
Amendment, it was an open question whether Congress could directly
impose a national minimum drinking age.

															The ACA, in contrast, relates solely to the
federally funded Medicaid program; if States choose not to comply,
Congress has not threatened to withhold funds earmarked for any
other program. Nor does the ACA use Medicaid funding to induce
States to take action Congress itself could not undertake. The
Federal Government undoubtedly could operate its own health-care
program for poor persons, just as it operates Medicare for seniors’
health care. See supra, at 44.

															That is what makes this such a simple case, and
the Court’s decision so unsettling. Congress, aiming to assist the
needy, has appropriated federal money to subsidize state
health-insurance programs that meet federal standards. The
principal standard the ACA sets is that the state program cover
adults earning no more than 133% of the federal poverty line.
Enforcing that prescription ensures that federal funds will be
spent on health care for the poor in furtherance of Congress’
present perception of the general welfare.

															C

															The Chief Justice asserts that the Medicaid
expan- sion creates a “new health care program.” Ante, at
54. Moreover, States could “hardly anticipate” that Congress would
“transform [the program] so dramatically.” Ante , at 55.
Therefore, The Chief Justice maintains, Congress’ threat to
withhold “old” Medicaid funds based on a State’s refusal to
participate in the “new” program is a “threa[t] to terminate
[an]other . . . independent gran[t].” Ante , at 50,
52–53. And because the threat to withhold a large amount of funds
from one program “leaves the States with no real option but to
acquiesce [in a newly created program],” The Chief Justice
concludes, the Medicaid expansion is unconstitutionally coercive. Ante , at 52.

															1

															The starting premise on which The Chief
Justice’s coercion analysis rests is that the ACA did not really
“extend” Medicaid; instead, Congress created an entirely new
program to co-exist with the old. The Chief Justice calls the ACA
new, but in truth, it simply reaches more of America’s poor than
Congress originally covered.

															Medicaid was created to enable States to provide
medical assistance to “needy persons.” See S. Rep. No. 404, 89th
Cong., 1st Sess., pt. 1, p. 9 (1965). See also §121(a),
79Stat. 343 (The purpose of Medicaid is to enable States “to
furnish . . . medical assistance on behalf of [certain
persons] whose income and resources are insufficient to meet the
costs of necessary medical services.”). By bringing health care
within the reach of a larger population of Americans unable to
afford it, the Medicaid expansion is an extension of that basic
aim.

															The Medicaid Act contains hundreds of provisions
governing operation of the program, setting conditions ranging from
“Limitation on payments to States for expend- itures attributable
to taxes,” 42 U. S. C. §1396a(t) (2006 ed.), to “Medical
assistance to aliens not lawfully admitted for permanent
residence,” §1396b(v) (2006 ed. and Supp. IV). The Medicaid
expansion leaves unchanged the vast majority of these provisions;
it adds beneficiaries to the existing program and specifies the
rate at which States will be reimbursed for services provided to
the added bene- ficiaries. See ACA §§2001(a)(1), (3), 124Stat.
271–272. The ACA does not describe operational aspects of the
program for these newly eligible persons; for that information, one
must read the existing Medicaid Act. See 42 U. S. C.
§§1396–1396v(b) (2006 ed. and Supp. IV).

															Congress styled and clearly viewed the Medicaid
expansion as an amendment to the Medicaid Act, not as a “new”
health-care program. To the four categories of beneficiaries for
whom coverage became mandatory in 1965, and the three mandatory
classes added in the late 1980’s, see supra, at 41–42, the
ACA adds an eighth: individuals under 65 with incomes not exceeding
133% of the federal poverty level. The expansion is effectuated by
§2001 of the ACA, aptly titled: “Medicaid Coverage for the Lowest
Income Populations.” 124Stat. 271. That section amends Title 42,
Chapter 7, Subchapter XIX: Grants to States for Medical Assistance
Programs. Commonly known as the Medicaid Act, Subchapter XIX filled
some 278 pages in 2006. Section 2001 of the ACA would add
approximately three pages.[ 19 ]

															Congress has broad authority to construct or
adjust spending programs to meet its contemporary understanding of
“the general Welfare.” Helvering v. Davis , 301 U.S.
619 , 640–641 (1937). Courts owe a large measure of respect to
Congress’ characterization of the grant programs it establishes.
See Steward Machine , 301 U. S., at 594. Even if courts were
inclined to second-guess Congress’ conception of the character of
its legislation, how would reviewing judges divine whether an Act
of Congress, purporting to amend a law, is in reality not an
amendment, but a new creation? At what point does an extension
become so large that it “transforms” the basic law?

															Endeavoring to show that Congress created a new
program, The Chief Justice cites three aspects of the expansion.
First, he asserts that, in covering those earning no more than 133%
of the federal poverty line, the Medicaid expansion, unlike pre-ACA
Medicaid, does not “care for the neediest among us.” Ante, at 53. What makes that so? Single adults earning no more than
$14,856 per year—133% of the current federal poverty level—surely
rank among the Nation’s poor.

															Second, according to The Chief Justice,
“Congress mandated that newly eligible persons receive a level of
coverage that is less comprehensive than the traditional Medicaid
benefit package.” Ibid. That less comprehensive benefit
package, however, is not an innovation introduced by the ACA; since
2006, States have been free to use it for many of their Medicaid
beneficiaries.[ 20 ] The level
of benefits offered therefore does not set apart post-ACA Medicaid
recipients from all those entitled to benefits pre-ACA.

															Third, The Chief Justice correctly notes that
the reimbursement rate for participating States is differ- ent
regarding individuals who became Medicaid-eligible through the ACA. Ibid. But the rate differs only in its generosity to
participating States. Under pre-ACA Medicaid, the Federal
Government pays up to 83% of the costs of coverage for current
enrollees, §1396d(b) (2006 ed. and Supp. IV); under the ACA, the
federal contribution starts at 100% and will eventually settle at
90%, §1396d(y). Even if one agreed that a change of as little as 7
percentage points carries constitutional significance, is it not
passing strange to suggest that the purported incursion on state
sovereignty might have been averted, or at least mitigated, had
Congress offered States less money to carry out the same
obligations?

															Consider also that Congress could have repealed
Medicaid. See supra, at 38–39 (citing 42 U. S. C.
§1304); Brief for Petitioners in No. 11–400, p. 41.
Thereafter, Congress could have enacted Medicaid II, a new program
combin- ing the pre-2010 coverage with the expanded coverage
required by the ACA. By what right does a court stop Congress from
building up without first tearing down?

															2

															The Chief Justice finds the Medicaid expansion
vulnerable because it took participating States by surprise. Ante , at 54. “A State could hardly anticipate that
Congres[s]” would endeavor to “transform [the Medicaid program] so
dramatically,” he states. Ante, at 54–55. For the notion
that States must be able to foresee, when they sign up, alterations
Congress might make later on, The Chief Justice cites only one
case: Pennhurst State School and Hospital v. Halderman , 451 U.S.
1 .

															In Pennhurst , residents of a state-run,
federally funded institution for the mentally disabled complained
of abusive treatment and inhumane conditions in alleged violation
of the Developmentally Disabled Assistance and Bill of Rights Act.
451 U. S., at 5–6. We held that the State was not answerable
in damages for violating conditions it did not “voluntarily and
knowingly accep[t].” Id., at 17, 27. Inspecting the
statutory language and legislative his- tory, we found that the Act
did not “unambiguously” impose the requirement on which the
plaintiffs relied: that they receive appropriate treatment in the
least restrictive environment. Id., at 17–18. Satisfied that
Congress had not clearly conditioned the States’ receipt of federal
funds on the States’ provision of such treatment, we declined to
read such a requirement into the Act. Congress’ spending power, we
concluded, “does not include surprising participating States with
postacceptance or ‘retroactive’ conditions.” Id., at
24–25. Pennhurst thus instructs that “if
Congress intends to impose a condition on the grant of federal
moneys, it must do so unambiguously.” Ante, at 53 (quoting Pennhurst , 451 U. S., at 17). That requirement is met
in this case. Section 2001 does not take effect until 2014. The ACA
makes perfectly clear what will be required of States that accept
Medicaid funding after that date: They must extend eligibility to
adults with incomes no more than 133% of the federal poverty line.
See 42 U. S. C. §1396a(a)(10)(A) (i)(VIII) (2006 ed. and
Supp. IV).

															The Chief Justice appears to find in Pennhurst a requirement that, when spending legislation is
first passed, or when States first enlist in the federal program,
Congress must provide clear notice of conditions it might later
impose. If I understand his point correctly, it was incumbent on
Congress, in 1965, to warn the States clearly of the size and shape
potential changes to Medicaid might take. And absent such notice,
sizable changes could not be made mandatory. Our decisions do not
support such a requirement.[ 21 ]

															In Bennett v. New Jersey , 470 U.S.
632 (1985), the Secretary of Education sought to recoup Title I
funds[ 22 ] based on the
State’s noncompliance, from 1970 to 1972, with a 1978 amendment to
Title I. Relying on Pennhurst , we rejected the Secretary’s
attempt to recover funds based on the States’ alleged violation of
a rule that did not exist when the State accepted and spent the
funds. See 470 U. S. , at 640 (“New Jersey[,] when it
applied for and received Title I funds for the years 1970–1972[,]
had no basis to believe that the propriety of the expenditures
would be judged by any standards other than the ones in effect at the time .” (citing Pennhurst, 451 U. S., at
17, 24–25; emphasis added)).

															When amendment of an existing grant program has
no such retroactive effect, however, we have upheld Congress’
instruction. In Bennett v. Kentucky Dept. of Ed. , 470 U.S.
656 (1985), the Secretary sued to recapture Title I funds based
on the Commonwealth’s 1974 violation of a spending condition
Congress added to Title I in 1970. Rejecting Kentucky’s argument
pinned to Pennhurst , we held that the Commonwealth suffered
no surprise after accepting the federal funds. Kentucky was
therefore obliged to re- turn the money. 470 U. S., at
665–666, 673–674. The conditions imposed were to be assessed as of
1974, in light of “the legal requirements in place when the grants
were made,” id., at 670, not as of 1965, when Title I was
originally enacted.

															As these decisions show, Pennhurst ’s rule
demands that conditions on federal funds be unambiguously clear at
the time a State receives and uses the money—not at the time,
perhaps years earlier, when Congress passed the law establishing
the program. See also Dole , 483 U. S., at 208 (finding Pennhurst satisfied based on the clarity of the Federal Aid
Highway Act as amended in 1984, without looking back to 1956, the
year of the Act’s adoption).

															In any event, from the start, the Medicaid Act
put States on notice that the program could be changed: “The right
to alter, amend, or repeal any provision of [Medicaid],” the
statute has read since 1965, “is hereby reserved to the Congress.”
42 U. S. C. §1304. The “effect of these few simple words”
has long been settled. See National Railroad Passenger
Corporation v. Atchison, T. & S. F. R. Co. , 470 U.S.
451 , 467–468, n. 22 (1985) (citing Sinking Fund Cases , 99 U.S.
700 , 720 (1879)). By reserving the right to “alter, amend, [or]
repeal” a spending program, Congress “has given special notice of
its intention to retain . . . full and complete power to
make such alterations and amendments . . . as come within
the just scope of legislative power.” Id., at 720.

															Our decision in Bowen v. Public
Agencies Opposed to Social Security Entrapment , 477 U.S.
41 , 51–52 (1986), is guiding here. As enacted in 1935, the
Social Security Act did not cover state employees. Id., at
44. In response to pressure from States that wanted coverage for
their employees, Congress, in 1950, amended the Act to allow States
to opt into the program. Id., at 45. The statutory provision
giving States this option expressly permitted them to withdraw from
the program. Ibid. Beginning in the late 1970’s, States
increasingly exercised the option to withdraw. Id., at 46.
Concerned that withdrawals were threatening the integrity of Social
Security, Congress repealed the termination provision. Congress
thereby changed Social Security from a program voluntary for the
States to one from which they could not escape. Id., at 48.
California objected, arguing that the change impermissibly deprived
it of a right to withdraw from Social Security. Id., at
49–50. We unanimously rejected California’s argument. Id., at 51–53. By including in the Act “a clause expressly reserving to
it ‘[t]he right to alter, amend, or repeal any provision’ of the
Act,” we held, Congress put States on notice that the Act “created
no contractual rights.” Id., at 51–52. The States therefore
had no law-based ground on which to complain about the amendment,
despite the significant character of the change.

															The Chief Justice nevertheless would rewrite
§1304 to countenance only the “right to alter somewhat ,” or
“amend, but not too much .” Congress, however, did not so
qualify §1304. Indeed, Congress retained discretion to “repeal”
Medicaid, wiping it out entirely. Cf. Delta Air Lines, Inc. v. August , 450 U.S.
346 , 368 (1981) (Rehnquist, J., dissenting) (invoking “the
common-sense maxim that the greater includes the lesser”). As Bowen indicates, no State could reasonably have read §1304
as reserving to Congress authority to make adjustments only if
modestly sized.

															In fact, no State proceeded on that
understanding. In com- pliance with Medicaid regulations, each
State expressly undertook to abide by future Medicaid changes. See
42 CFR §430.12(c)(1) (2011) (“The [state Medicaid] plan must
provide that it will be amended whenever necessary to reflect
. . . [c]hanges in Federal law, regulations, policy
interpretations, or court decisions.”). Whenever a State notifies
the Federal Government of a change in its own Medicaid program, the
State certifies both that it knows the federally set terms of
participation may change, and that it will abide by those changes
as a condition of continued participation. See, e.g., Florida Agency for Health Care Admin., State Plan Under Title XIX
of the Social Security Act Medical Assistance Program §7.1, p. 86
(Oct. 6, 1992).

															The Chief Justice insists that the most recent
expansion, in contrast to its predecessors, “accomplishes a shift
in kind, not merely degree.” Ante , at 53. But why was
Medicaid altered only in degree, not in kind, when Congress
required States to cover millions of children and pregnant women?
See supra, at 41–42. Congress did not “merely alte[r] and
expan[d] the boundaries of” the Aid to Families with Dependent
Children program. But see ante , at 53–55. Rather, Congress
required participating States to provide coverage tied to the
federal poverty level (as it later did in the ACA), rather than to
the AFDC program. See Brief for National Health Law Program
et al. as Amici Curiae 16–18. In short, given §1304,
this Court’s construction of §1304’s language in Bowen , and
the enlargement of Medicaid in the years since 1965,[ 23 ] a State would be hard put to complain
that it lacked fair notice when, in 2010, Congress altered Medicaid
to embrace a larger portion of the Nation’s poor.

															3

															The Chief Justice ultimately asks whether “the
financial inducement offered by Congress . . . pass[ed]
the point at which pressure turns into compulsion.” Ante , at
50 (internal quotation marks omitted). The financial inducement
Congress employed here, he concludes, crosses that threshold: The
threatened withholding of “existing Medicaid funds” is “a gun to
the head” that forces States to acquiesce. Ante, at 50–51
(citing 42 U. S. C. §1396c).[ 24 ]

															The Chief Justice sees no need to “fix the
outermost line,” Steward Machine , 301 U. S., at 591,
“where persuasion gives way to coercion,” ante , at 55.
Neither do the joint dissenters. See post, at 36,
38.[ 25 ] Notably, the
decision on which they rely, Steward Machine , found the
statute at issue inside the line, “wherever the line may be.” 301
U. S., at 591.

															When future Spending Clause challenges arrive,
as they likely will in the wake of today’s decision, how will
litigants and judges assess whether “a State has a legitimate
choice whether to accept the federal conditions in exchange for
federal funds”? Ante , at 48. Are courts to measure the
number of dollars the Federal Government might withhold for
noncompliance? The portion of the State’s budget at stake? And
which State’s—or States’—budget is determinative: the lead
plaintiff, all challenging States (26 in this case, many with quite
different fiscal situations), or some national median?Does it
matter that Florida, unlike most States, imposes no state income
tax, and therefore might be able to replace foregone federal funds
with new state revenue?[ 26 ]
Or that the coercion state officials in fact fear is punishment at
the ballot box for turning down a politically popular federal
grant?

															The coercion inquiry, therefore, appears to
involve polit- ical judgments that defy judicial calculation. See Baker v. Carr , 369 U.S.
186 , 217 (1962). Even commentators sympathetic to robust
enforcement of Dole ’s limitations, see supra, at 46,
have concluded that conceptions of “impermissible coercion”
premised on States’ perceived inability to decline federal funds
“are just too amorphous to be judicially administrable.” Baker
& Berman, Getting off the Dole , 78 Ind. L. J. 459,
521, 522, n. 307 (2003) (citing, e.g., Scalia, The Rule of
Law as a Law of Rules, 56 U. Chi. L. Rev. 1175 (1989)).

															At bottom, my colleagues’ position is that the
States’ reliance on federal funds limits Congress’ authority to
alter its spending programs. This gets things backwards: Congress,
not the States, is tasked with spending federal money in service of
the general welfare. And each successive Congress is empowered to
appropriate funds as it sees fit. When the 110th Congress reached a
conclusion about Medicaid funds that differed from its
predecessors’ view, it abridged no State’s right to “existing,” or
“pre-existing,” funds. But see ante , at 51–52; post, at 47–48 (joint opinion of Scalia, Kennedy, Thomas, and Alito,
JJ.). For, in fact, there are no such funds. There is only money
States anticipate receiving from future Congresses.

															D

															Congress has delegated to the Secretary of
Health and Human Services the authority to withhold, in whole or in
part, federal Medicaid funds from States that fail to comply with
the Medicaid Act as originally composed and as subsequently
amended. 42 U. S. C. §1396c.[ 27 ] The Chief Justice, however, holds that the
Constitution precludes the Secretary from withholding “existing”
Medicaid funds based on States’ refusal to comply with the expanded
Medi- caid program. Ante , at 55. For the foregoing reasons,
I disagree that any such withholding would violate the Spending
Clause. Accordingly, I would affirm the decision of the Court of
Appeals for the Eleventh Circuit in this regard.

															But in view of The Chief Justice’s disposition,
I agree with him that the Medicaid Act’s severability clause
determines the appropriate remedy. That clause provides that “[i]f
any provision of [the Medicaid Act], or the application thereof to
any person or circumstance, is held in- valid, the remainder of the
chapter, and the application of such provision to other persons or
circumstances shall not be affected thereby.” 42 U. S. C.
§1303.

															The Court does not strike down any provision of
the ACA. It prohibits only the “application” of the Secretary’s
authority to withhold Medicaid funds from States that decline to
conform their Medicaid plans to the ACA’s requirements. Thus the
ACA’s authorization of funds to finance the expansion remains
intact, and the Secretary’s authority to withhold funds for reasons
other than noncompliance with the expansion remains unaffected.

															Even absent §1303’s command, we would have no
warrant to invalidate the Medicaid expansion, contra post, at 46–48 (joint opinion of Scalia, Kennedy, Thomas, and Alito,
JJ.), not to mention the entire ACA, post, at 49–64 (same).
For when a court confronts an unconstitutional statute, its
endeavor must be to conserve, not destroy, the legislature’s
dominant objective. See, e.g., Ayotte v. Planned
Parenthood of Northern New Eng. , 546 U.S.
320 , 328–330 (2006). In this case, that objective was to
increase access to health care for the poor by increasing the
States’ access to federal funds. The Chief Justice is undoubtedly
right to conclude that Congress may offer States funds “to expand
the availability of health care, and requir[e] that States
accepting such funds comply with the conditions on their use.” Ante , at 55. I therefore concur in the judgment with respect
to Part IV–B of The Chief Justice’s opinion.

															*  *  *

															For the reasons stated, I agree with The Chief
Justice that, as to the validity of the minimum coverage provi-
sion, the judgment of the Court of Appeals for the Eleventh Circuit
should be reversed. In my view, the provision en- counters no
constitutional obstruction. Further, I would uphold the Eleventh
Circuit’s decision that the Medicaid expansion is within Congress’
spending power. Notes 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 coverage. 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. 2 Despite its success,
Massachusetts’ medical-care providers still administer substantial
amounts of uncompensated care, much of that to uninsured patients
from out-of-state. See supra, at 7–8. 3 Alexander Hamilton
described the problem this way: “[Often] it would be beneficial to
all the states to encourage, or suppress[,] a particular branch of
trade, while it would be detrimental . . . to attempt it
without the concurrence of the rest.” The Continentalist No. V, in
3 Papers of Alexander Hamilton 75, 78 (H. Syrett ed. 1962). Because
the concurrence of all States was exceedingly difficult to obtain,
Hamilton observed, “the experiment would probably be left untried.” Ibid. 4 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). 5 Echoing The Chief
Justice, the joint dissenters urge that the minimum coverage
provision impermissibly regulates young people who “have no
intention of purchasing [medical care]” and are too far “removed
from the [health-care] market.” See post, at 8, 11. This
criticism ignores the reality that a healthy young person may be a
day away from needing health care. See supra, at 4. A victim
of an accident or unforeseen illness will consume extensive medical
care immediately, though scarcely expecting to do so. 6 The Chief Justice’s
reliance on the quoted passages of the Constitution, see ante, at 18–19, is also dubious on other grounds. The power
to “regulate the Value” of the national currency presumably
includes the power to increase the currency’s worth— i.e., to
create value where none previously existed. And if the power to
“[r]egulat[e] . . . the land and naval Forces”
presupposes “there is already [in existence] something to be
regulated,” i.e., an Army and a Navy, does Congress lack
authority to create an Air Force? 7 The Chief Justice’s
characterization of individuals who choose not to purchase private
insurance as “doing nothing,” ante, at 20, is simi-larly
questionable. A person who self-insures opts against prepayment for
a product the person will in time consume. When aggregated,
exercise of that option has a substantial impact on the health-care
market. See supra, at 5–7, 16–17. 8 Some adherents to the
joint dissent have questioned the existence of substantive due
process rights. See McDonald v. Chicago , 561
U. S. ___, ___ (2010) (Thomas, J., concurring) (slip op., at
7) (The notion that the Due Process Clause “could define the
substance of th[e] righ[t to liberty] strains credulity.”); Albright v. Oliver , 510 U.S.
266 , 275 (1994) (Scalia, J., concurring) (“I reject the
proposition that the Due Process Clause guarantees certain
(unspecified) liberties[.]”). Given these Justices’ reluctance to
interpret the Due Process Clause as guaranteeing liberty interests,
their willingness to plant such protections in the Commerce Clause
is striking. 9 The failure to purchase
vegetables in The Chief Justice’s hypothetical, then, is not what leads to higher health-care costs for others; rather, it is
the failure of individuals to maintain a healthy diet, and the
resulting obesity, that creates the cost-shifting problem. See ante, at 22–23. Requiring individuals to purchase vegetables
is thusseveral steps removed from solving the problem. The failure
to obtain health insurance, by contrast, is the immediate
cause of the cost-shifting Congress sought to address through
the ACA. See supra, at 5–7. Requiring individuals to obtain
insurance attacks the source of the problem directly, in a single
step. 10 Indeed, Congress regularly and
uncontroversially requires individuals who are “doing nothing,” see ante, at 20, to take action. Exam-ples include federal
requirements to report for jury duty, 28 U. S. C.
§1866(g) (2006 ed., Supp. IV); to register for selective service,
50 U. S. C. App. §453; to purchase firearms and gear in
anticipation of service in the Militia, 1Stat. 271 (Uniform Militia
Act of 1792); to turn gold currency over to the Federal Government
in exchange for paper currency, see Nortz v. United
States , 294 U.S.
317 , 328 (1935); and to file a tax return, 26
U. S. C. §6012 (2006 ed., Supp. IV). 11 In a
separate argument, the joint dissenters contend that the minimum
coverage provision is not necessary and proper because it was not
the “only . . . way” Congress could have made the
guaranteed-issue and community-rating reforms work. Post, at
9–10. Congress could also have avoided an insurance-market death
spiral, the dissenters maintain, by imposing a surcharge on those
who did not previously purchase insurance when those individuals
eventually enter the health-insurance system. Post, at 10.
Or Congress could “den[y] a full income tax credit” to those who do
not purchase insurance. Ibid. Neither a surcharge on those
who purchase insurance nor the denial of a tax credit to those who
do not would solve the problem created by guaranteed-issue and
community-rating requirements. Neither would prompt the purchase of
insurance before sickness or injury occurred. But even assuming
there were “practicable” alternatives to the minimum coverage
provision, “we long ago rejected the view that the Necessary and
Proper Clause demands that an Act of Congress be ‘ absolutely necessary’ to the exercise of an enumerated power.” Jinks v. Richland County , 538 U.S.
456 , 462 (2003) (quoting McCulloch v. Maryland , 4
Wheat. 316, 414–415 (1819)). Rather, the statutory provision at
issue need only be “conducive” and “[reasonably] adapted” to the
goal Congress seeks to achieve. Jinks , 538 U. S., at
462 (internal quotation marks omitted). The minimum coverage
provision meets this requirement. See supra, at
31–33. 12 The
Chief Justice states that he must evaluate the constitution-ality
of the minimum coverage provision under the Commerce Clause because
the provision “reads more naturally as a command to buy insurance
than as a tax.” Ante, at 44. The Chief Justice ultimately
concludes, however, that interpreting the provision as a tax is a
“fairly possible” construction. Ante, at 32 (internal
quotation marks omitted). That being so, I see no reason to
undertake a Commerce Clause analysis that is not outcome
determinative. 13 Medicaid was “plainly an extension of
the existing Kerr-Mills” grant program. Huberfeld, Federalizing
Medicaid, 14 U. Pa. J. Const. L. 431, 444–445 (2011). Indeed,
the “section of the Senate report dealing with Title XIX”—the title
establishing Medicaid—“was entitled, ‘Improvement and Extension of
Kerr-Mills Medical Assistance Program.’ ” Stevens &
Stevens, Welfare Medicine in America 51 (1974) (quoting
S. Rep. No. 404, 89th Cong., 1st Sess., pt. 1, p. 9
(1965)). Setting the pattern for Medicaid, Kerr-Mills reimbursed
States for a portion of the cost of health care provided to welfare
recipients ifStates met conditions specified in the federal law, e.g., participating States were obliged to offer minimum
coverage for hospitalization and physician services. See Huberfeld, supra, at 443–444. 14 Available online at
http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NationalHealthAccountsHistorical.html. 15 Even
the study on which the plaintiffs rely, see Brief for Petitioners
10, concludes that “[w]hile most states will experience some
increase in spending, this is quite small relative to the federal
matching payments and low relative to the costs of uncompensated
care that [the states] would bear if the[re] were no health
reform.” See Kaiser Commission on Medicaid & the Uninsured,
Medicaid Coverage & Spending in Health Reform 16 (May 2010).
Thus there can be no objection to the ACA’s expansion of Medicaid
as an “unfunded mandate.” Quite the contrary, the program is
impressively well funded. 16 In
1972, for example, Congress ended the federal cash-assistance
program for the aged, blind, and disabled. That program previously
had been operated jointly by the Federal and State Governments,
asis the case with Medicaid today. Congress replaced the
cooperative federal program with the nationalized Supplemental
Security In-come (SSI) program. See Schweiker v. Gray
Panthers , 453 U.S.
34 , 38 (1981). 17 The
Chief Justice and the joint dissenters perceive in cooperative
federalism a “threa[t]” to “political accountability.” Ante ,
at 48; see post, at 34–35. By that, they mean voter
confusion: Citizens upset by unpopular government action, they
posit, may ascribe to state officials blame more appropriately laid
at Congress’ door. But no such confusion is apparent in this case:
Medicaid’s status as a federally funded, state-administered program
is hardly hidden from view. 18 Although the plaintiffs, in the
proceedings below, did not contest the ACA’s satisfaction of these
criteria, see 648 F.3d 1235, 1263 (CA11 2011), The Chief Justice
appears to rely heavily on the second crite-rion. Compare ante , at 52, 54, with infra , at 52–54. 19 Compare Subchapter XIX, 42
U. S. C. §§1396–1396v(b) (2006 ed. and Supp. IV) with
§§1396a(a) (10)(A)(i)(VIII) (2006 ed. and Supp.IV); 1396a(a)
(10)(A)(ii)(XX), 1396a(a)(75), 1396a(k), 1396a(gg) to (hh),
1396d(y), 1396r–1(e), 1396u–7(b)(5) to (6). 20 The
Deficit Reduction Act of 2005 authorized States to provide
“benchmark coverage” or “benchmark equivalent coverage” to certain
Medicaid populations. See §6044, 120Stat. 88, 42 U. S. C.
§1396u–7 (2006 ed. and Supp. IV). States may offer the same level
of coverage to persons newly eligible under the ACA. See
§1396a(k). 21 The
Chief Justice observes that “Spending Clause legislation[i]s much
in the nature of a contract .” Ante , at 46 (internal
quotation marks omitted). See also post, at 33 (joint
opinion of Scalia, Kennedy, Thomas, and Alito, JJ.) (same). But the
Court previously has rec-ognized that “[u]nlike normal contractual
undertakings, federal grant programs originate in and remain
governed by statutory provisions expressing the judgment of
Congress concerning desirable public policy.” Bennett v. Kentucky Dept. of Ed. , 470
U.S. 656 , 669 (1985). 22 Title
I of the Elementary and Secondary Education Act of 1965 provided
federal grants to finance supplemental educational programs in
school districts with high concentrations of children from
low-income families. See Bennett v. New Jersey , 470 U.S.
632 , 634–635 (1985) (citing Pub. L. No. 89–10, 79Stat.
27). 23 Note,
in this regard, the extension of Social Security, which began in
1935 as an old-age pension program, then expanded to include
sur-vivor benefits in 1939 and disability benefits in 1956. See
Social Security Act, ch. 531, 49Stat. 622–625; Social Security Act
Amendments of 1939, 53Stat. 1364–1365; Social Security Amendments
of 1956, ch. 836, §103, 70Stat. 815–816. 24 The
joint dissenters, for their part, would make this the entire
inquiry. “[I]f States really have no choice other than to accept
the package,” they assert, “the offer is coercive.” Post, at
35. The Chief Justice recognizes Congress’ authority to construct a
single federal program and “condition the receipt of funds on the
States’ complying with restrictions on the use of those funds.” Ante , at 50. For the joint dissenters, however, all that
matters, it appears, is whether States can resist the temptation of
a given federal grant. Post, at 35. On this logic, any
federal spending program, sufficiently large and well-funded, would
be unconstitutional. The joint dissenters point to smaller programs
States might have the will to refuse. See post, at 40–41
(elementary and secondary education). But how is a court to judge
whether “only 6.6% of all state expenditures,” post, at 41,
is an amount States could or would do without? Speculations of this
genre are characteristic of the joint dissent. See, e.g.,
post , at 35 (“it may be state officials who will bear
the brunt of public disapproval” for joint federal-state
endeavors); ibid. , (“federal officials . . . may remain insulated from the electoral ramifications of
their decision”); post, at 37 (“a heavy federal tax
. . . levied to support a federal program that offers
large grants to the States . . . may , as a
practical matter, [leave States] unable to refuse to participate”); ibid. (withdrawal from a federal program “would likely force the State to impose a huge tax increase”); post, at 46 (state share of ACA expansion costs “ may increase in the future”) (all emphasis added; some internal
quotation marks omitted). The joint dissenters are long on
conjecture and short on real-world examples. 25 The
joint dissenters also rely heavily on Congress’ perceived intent to
coerce the States. Post, at 42–46; see, e.g., post, at 42 (“In crafting the ACA, Congress clearly expressed its
informed view that no State could possibly refuse the offer that
the ACA extends.”). We should not lightly ascribe to Congress an
intent to violate the Constitution (at least as my colleagues read
it). This is particularly true when the ACA could just as well be
comprehended as demonstrating Congress’ mere expectation, in light
of the uniformity of past participation and the generosity of the
federal contribution, that States would not withdraw. Cf. South
Dakota v. Dole , 483 U.S.
203 , 211 (1987) (“We cannot conclude . . . that a
con-ditional grant of federal money . . . is
unconstitutional simply byreason of its success in achieving the
congressional objective.”). 26 Federal taxation of a State’s
citizens, according to the joint dissenters, may diminish a State’s
ability to raise new revenue. This, in turn, could limit a State’s
capacity to replace a federal program with an “equivalent”
state-funded analog. Post, at 40. But it cannot be true that
“the amount of the federal taxes extracted from the taxpayers of a
State to pay for the program in question is relevant in determining
whether there is impermissible coercion.” Post, at 37. When
the United States Government taxes United States citizens, it taxes
them “in their individual capacities” as “the people of
America”—not as residents of a particular State. See U. S.
Term Limits, Inc. v. Thornton , 514
U.S. 779 , 839 (1995) (Kennedy, J., concurring). That is because
the “Framers split the atom of sovereignty[,] . . .
establishing two orders of government”—“one state and one
federal”—“each with its own direct relationship” to the people. Id., at 838. A State therefore has no claim on the money its
residents pay in federal taxes, and federal “spending programs need
not help people in all states in the same measure.” See Brief for
David Satcher et al. as Amici Curiae 19. In 2004, for
example, New Jersey received 55 centsin federal spending for every
dollar its residents paid to the Federal Government in taxes, while
Mississippi received $1.77 per tax dollar paid. C. Dubay, Tax
Foundation, Federal Tax Burdens and Expenditures by State: Which
States Gain Most from Federal Fiscal Operations? 2 (Mar. 2006).
Thus no constitutional problem was created when Arizona declined
for 16 years to participate in Medicaid, even though its residents’
tax dollars financed Medicaid programs in every other
State. 27 As
The Chief Justice observes, the Secretary is authorized to withhold
all of a State’s Medicaid funding. See ante , at 51. But
total withdrawal is what the Secretary may , not must, do.
She has discretion to withhold only a portion of the Medicaid funds
otherwise due a noncompliant State. See §1396c; cf. 45 CFR
§80.10(f) (2011) (Secretary may enforce Title VI’s
nondiscrimination requirement through “refusal to grant or continue
Federal financial assistance, in whole or in part .”
(emphasis added)). The Secretary, it is worth noting, may herself
experience political pressures, which would make her all the more
reluctant to cut off funds Congress has appropriated for a State’s
needy citizens. 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]

															Justice Scalia, Justice Kennedy, Justice
Thomas, and Justice Alito, dissenting.

															Congress has set out to remedy the problem that
the best health care is beyond the reach of many Americans who
cannot afford it. It can assuredly do that, by exercising the
powers accorded to it under the Constitution. The question in this
case, however, is whether the complex structures and provisions of
the Patient Protection and Affordable Care Act (Affordable Care Act
or ACA) go be- yond those powers. We conclude that they do.

															This case is in one respect difficult: it
presents two questions of first impression. The first of those is
whether failure to engage in economic activity (the purchase of
health insurance) is subject to regulation under the Commerce
Clause. Failure to act does result in an effect on commerce, and
hence might be said to come under this Court’s “affecting commerce”
criterion of Commerce Clause jurisprudence. But in none of its
decisions has this Court extended the Clause that far. The second
question is whether the congressional power to tax and spend,
U. S. Const., Art. I, §8, cl. 1, permits the
conditioning of a State’s continued receipt of all funds under a
massive state-administered federal welfare program upon its
acceptance of an expansion to that program. Several of our opinions
have suggested that the power to tax and spend cannot be used to
coerce state administration of a federal program, but we have never
found a law enacted under the spending power to be coercive. Those
questions are difficult.

															The case is easy and straightforward, however,
in another respect. What is absolutely clear, affirmed by the text
of the 1789 Constitution, by the Tenth Amendment ratified in 1791,
and by innumerable cases of ours in the 220 years since, is that
there are structural limits upon federal power—upon what it can
prescribe with respect to private conduct, and upon what it can
impose upon the sovereign States. Whatever may be the conceptual
limits upon the Commerce Clause and upon the power to tax and
spend, they cannot be such as will enable the Federal Government to
regulate all private conduct and to com- pel the States to function
as administrators of federal programs.

															That clear principle carries the day here. The
striking case of Wickard v. Filburn , 317 U.S.
111 (1942), which held that the economic activity of growing
wheat, even for one’s own consumption, affected commerce
sufficiently that it could be regulated, always has been regarded
as the ne plus ultra of expansive Commerce Clause
jurisprudence. To go beyond that, and to say the failure to
grow wheat (which is not an economic activity, or any
activity at all) nonetheless affects commerce and therefore can be
federally regulated, is to make mere breathing in and out the basis
for federal prescription and to extend federal power to virtually
all human activity.

															As for the constitutional power to tax and spend
for the general welfare: The Court has long since expanded that
beyond (what Madison thought it meant) taxing and spending for
those aspects of the general welfare that were within the Federal
Government’s enumerated powers, see United States v. Butler , 297 U.S.
1 , 65–66 (1936). Thus, we now have sizable federal Departments
devoted to subjects not mentioned among Congress’ enumerated
powers, and only marginally related to commerce: the De- partment
of Education, the Department of Health and Human Services, the
Department of Housing and Urban Development. The principal
practical obstacle that prevents Congress from using the
tax-and-spend power to assume all the general-welfare
responsibilities traditionally exercised by the States is the sheer
impossibility of managing a Federal Government large enough to
administer such a system. That obstacle can be overcome by granting
funds to the States, allowing them to administer the program. That
is fair and constitutional enough when the States freely agree to
have their powers employed and their employees enlisted in the
federal scheme. But it is a blatant violation of the constitutional
structure when the States have no choice.

															The Act before us here exceeds federal power
both in mandating the purchase of health insurance and in denying
nonconsenting States all Medicaid funding. These parts of the Act
are central to its design and operation, and all the Act’s other
provisions would not have been enacted without them. In our view it
must follow that the entire statute is inoperative.

															I The Individual Mandate Article I, §8, of the Constitution gives
Congress the power to “regulate Commerce . . . among the
several States.” The Individual Mandate in the Act commands that
every “applicable individual shall for each month beginning after
2013 ensure that the individual, and any dependent of the
individual who is an applicable individ- ual, is covered under
minimum essential coverage.” 26 U. S. C. §5000A(a) (2006
ed., Supp. IV). If this provision “regulates” anything, it is the failure to maintain minimum essential coverage. One might
argue that it regulates that failure by requiring it to be
accompanied by payment of a penalty. But that failure—that
abstention from commerce—is not “Commerce.” To be sure, purchasing insurance is ”Commerce”; but one does not
regulate commerce that does not exist by compelling its
existence.

															In Gibbons v. Ogden , 9 Wheat. 1,
196 (1824), Chief Justice Marshall wrote that the power to regulate
commerce is the power “to prescribe the rule by which commerce is
to be governed.” That understanding is con- sistent with the
original meaning of “regulate” at the time of the Constitution’s
ratification, when “to regulate” meant “[t]o adjust by rule, method
or established mode,” 2 N. Webster, An American Dictionary of the
English Language (1828); “[t]o adjust by rule or method,” 2 S.
Johnson, A Dictionary of the English Language (7th ed. 1785); “[t]o
adjust, to direct according to rule,” 2 J. Ash, New and Complete
Dictionary of the English Language (1775); “to put in order, set to
rights, govern or keep in order,” T. Dyche & W. Pardon, A New
General English Dictionary

															(16th ed. 1777).[ 1 ] It can mean to direct the manner of something but not
to direct that something come into being. There is no instance in
which this Court or Congress (or anyone else, to our knowledge) has
used “regulate” in that peculiar fashion. If the word bore that
meaning, Congress’ authority “[t]o make Rules for the Govern- ment
and Regulation of the land and naval Forces,” U. S. Const.,
Art. I, §8, cl. 14, would have made superfluous the later provision
for authority “[t]o raise and support Armies,” id. , §8, cl.
12, and “[t]o provide and maintain a Navy,” id. , §8, cl.
13.

															We do not doubt that the buying and selling of
health insurance contracts is commerce generally subject to federal
regulation. But when Congress provides that (nearly) all citizens
must buy an insurance contract, it goes beyond “adjust[ing] by rule
or method,” Johnson, supra, or “direct[ing] according to
rule,” Ash, supra; it directs the creation of commerce.

															In response, the Government offers two theories
as to why the Individual Mandate is nevertheless constitutional.
Neither theory suffices to sustain its validity.

															A

															First, the Government submits that §5000A is
“integral to the Affordable Care Act’s insurance reforms” and
“necessary to make effective the Act’s core reforms.” Brief for
Petitioners in No. 11–398 (Minimum Coverage Provision) 24
(hereinafter Petitioners’ Minimum Coverage Brief). Congress
included a “finding” to similar effect in the Act

															itself. See 42 U. S. C.
§18091(2)(H).

															As discussed in more detail in Part V, infra , the Act contains numerous health insurance reforms,
but most notable for present purposes are the “guaranteed issue”
and “community rating” provisions, §§300gg to 300gg–4. The former
provides that, with a few exceptions, “each health insurance issuer
that offers health insurance coverage in the individual or group
market in a State must accept every employer and individual in the
State that applies for such coverage.” §300gg–1(a). That is, an
insurer may not deny coverage on the basis of, among other things,
any pre-existing medical condition that the applicant may have, and
the resulting insurance must cover that condition. See
§300gg–3.

															Under ordinary circumstances, of course,
insurers would respond by charging high premiums to individuals
with pre-existing conditions. The Act seeks to prevent this through
the community-rating provision. Simply put, the community-rating
provision requires insurers to calculate an individual’s insurance
premium based on only four factors: (i) whether the individual’s
plan covers just the individual or his family also, (ii) the
“rating area” in which the individual lives, (iii) the individual’s
age, and (iv) whether the individual uses tobacco. §300gg(a)(1)(A).
Aside from the rough proxies of age and tobacco use (and possibly
rating area), the Act does not allow an insurer to factor the
individual’s health characteristics into the price of his insurance
premium. This creates a new incentive for young and healthy
individuals without pre-existing conditions. The insurance premiums
for those in this group will not reflect their own low actuarial
risks but will subsidize insurance for others in the pool. Many of
them may decide that purchasing health insurance is not an eco-
nomically sound decision—especially since the guaranteed-issue
provision will enable them to purchase it at the same cost in later
years and even if they have developed a pre-existing condition. But
without the contribution of above-risk premiums from the young and
healthy, the community-rating provision will not enable insurers to
take on high-risk individuals without a massive increase in
premiums.

															The Government presents the Individual Mandate
as a unique feature of a complicated regulatory scheme governing
many parties with countervailing incentives that must be carefully
balanced. Congress has imposed an extensive set of regulations on
the health insurance industry, and compliance with those
regulations will likely cost the in- dustry a great deal. If the
industry does not respond by increasing premiums, it is not likely
to survive. And if the industry does increase premiums, then there
is a seri- ous risk that its products—insurance plans—will become
economically undesirable for many and prohibitively ex- pensive for
the rest.

															This is not a dilemma unique to regulation of
the health-insurance industry. Government regulation typically
imposes costs on the regulated industry—especially regulation that
prohibits economic behavior in which most market participants are
already engaging, such as “piecing out” the market by selling the
product to different classes of people at different prices (in the
present context, providing much lower insurance rates to young and
healthy buyers). And many industries so regulated face the reality
that, without an artificial increase in demand, they cannot
continue on. When Congress is regulating these industries directly,
it enjoys the broad power to enact “ ‘all appropriate
legislation’ ” to “ ‘protec[t]’ ” and
“ ‘advanc[e]’ ” commerce, NLRB v. Jones &
Laughlin Steel Corp. , 301 U.S.
1 , 36–37 (1937) (quoting The Daniel Ball , 10 Wall. 557,
564 (1871)). Thus, Congress might protect the imperiled industry by
prohibiting low-cost competition, or by according it preferential
tax treatment, or even by granting it a direct subsidy.

															Here, however, Congress has impressed into
service third parties, healthy individuals who could be but are not
customers of the relevant industry, to offset the undesirable
consequences of the regulation. Congress’ desire to force these
individuals to purchase insurance is motivated by the fact that
they are further removed from the market than unhealthy individuals
with pre-existing conditions, because they are less likely to need
extensive care in the near future. If Congress can reach out and
command even those furthest removed from an interstate market to
participate in the market, then the Commerce Clause becomes a font
of unlimited power, or in Hamilton’s words, “the hideous monster
whose devouring jaws . . . spare neither sex nor age, nor
high nor low, nor sacred nor profane.” The Federalist No. 33,
p. 202 (C. Rossiter ed. 1961).

															At the outer edge of the commerce power, this
Court has insisted on careful scrutiny of regulations that do not
act directly on an interstate market or its participants. In New
York v. United States , 505 U.S.
144 (1992), we held that Congress could not, in an effort to
regulate the disposal of radioactive waste produced in several
different industries, order the States to take title to that waste. Id., at 174–177. In Printz v. United States , 521 U.S.
898 (1997), we held that Congress could not, in an effort to
regulate the distribution of firearms in the interstate mar- ket,
compel state law-enforcement officials to perform background
checks. Id., at 933–935. In United States v. Lopez , 514 U.S.
549 (1995), we held that Congress could not, as a means of
fostering an educated interstate labor market through the
protection of schools, ban the possession of a firearm within a
school zone. Id., at 559–563. And in United States v. Morrison , 529 U.S.
598 (2000), we held that Congress could not, in an effort to
ensure the full participation of women in the interstate economy,
subject private individuals and companies to suit for
gender-motivated violent torts. Id., at 609–619. The lesson
of these cases is that the Commerce Clause, even when sup-
plemented by the Necessary and Proper Clause, is not carte
blanche for doing whatever will help achieve the ends Congress
seeks by the regulation of commerce. And the last two of these
cases show that the scope of the Necessary and Proper Clause is
exceeded not only when the congressional action directly violates
the sovereignty of the States but also when it violates the
background principle of enumerated (and hence limited) federal
power.

															The case upon which the Government principally
relies to sustain the Individual Mandate under the Necessary and
Proper Clause is Gonzales v. Raich , 545 U.S. 1 (2005). That case held that Congress could, in an effort to
restrain the interstate market in marijuana, ban the local
cultivation and possession of that drug. Id., at 15–22. Raich is no precedent for what Congress has done here. That
case’s prohibition of growing (cf. Wickard , 317 U. S.
111), and of possession (cf. innumerable federal statutes) did not
represent the expansion of the federal power to direct into a broad
new field. The mandating of economic activity does, and since it is
a field so limitless that it converts the Commerce Clause into a
general authority to direct the economy, that mandating is not
“consist[ent] with the letter and spirit of the constitution.” McCulloch v. Maryland , 4 Wheat. 316, 421 (1819).

															Moreover, Raich is far different from the
Individual Mandate in another respect. The Court’s opinion in Raich pointed out that the growing and possession
prohibitions were the only practicable way of enabling the
prohibition of interstate traffic in marijuana to be effectively
enforced. 545 U. S., at 22. See also Shreveport Rate
Cases , 234 U.S.
342 (1914) (Necessary and Proper Clause allows regulations of
intrastate transactions if necessary to the regulation of an
interstate market). Intrastate marijuana could no more be
distinguished from interstate marijuana than, for example,
endangered-species trophies obtained before the species was
federally protected can be distinguished from trophies obtained
afterwards—which made it necessary and proper to prohibit the sale
of all such trophies, see Andrus v. Allard , 444 U.S.
51 (1979).

															With the present statute, by contrast, there are
many ways other than this unprecedented Individual Mandate by which
the regulatory scheme’s goals of reducing insurance premiums and
ensuring the profitability of insurers could be achieved. For
instance, those who did not purchase insurance could be subjected
to a surcharge when they do enter the health insurance system. Or
they could be denied a full income tax credit given to those who do
purchase the insurance.

															The Government was invited, at oral argument, to
suggest what federal controls over private conduct (other than
those explicitly prohibited by the Bill of Rights or other
constitutional controls) could not be justified as necessary
and proper for the carrying out of a general regulatory scheme. See
Tr. of Oral Arg. 27–30, 43–45 (Mar. 27, 2012). It was unable to
name any. As we said at the outset, whereas the precise scope of
the Commerce Clause and the Necessary and Proper Clause is
uncertain, the proposition that the Federal Government cannot do
everything is a fundamental precept. See Lopez , 514
U. S., at 564 (“[I]f we were to accept the Government’s
arguments, we are hard pressed to posit any activity by an in-
dividual that Congress is without power to regulate”). Section
5000A is defeated by that proposition.

															B

															The Government’s second theory in support of
the In- dividual Mandate is that §5000A is valid because it is
actually a “regulat[ion of] activities having a substantial
relation to interstate commerce, . . . i.e., . . . activities that substantially affect interstate
commerce .” Id., at 558–559. See also Shreveport Rate
Cases , supra . This argument takes a few different forms,
but the basic idea is that §5000A regulates “the way in which
individuals finance their participation in the health- care market.” Petitioners’ Minimum Coverage Brief 33 (emphasis added).
That is, the provision directs the manner in which individuals
purchase health care services and related goods (directing that
they be purchased through insurance) and is therefore a
straightforward exercise of the commerce power.

															The primary problem with this argument is that
§5000A does not apply only to persons who purchase all, or most, or
even any, of the health care services or goods that the mandated
insurance covers. Indeed, the main objection many have to the
Mandate is that they have no intention of purchasing most or even
any of such goods or services and thus no need to buy insurance for
those purchases. The Government responds that the health-care
market involves “essentially universal participation,” id., at 35. The principal difficulty with this response is that it is,
in the only relevant sense, not true. It is true enough that
everyone consumes “health care,” if the term is taken to include
the purchase of a bottle of aspirin. But the health care “market”
that is the object of the Individual Mandate not only includes but
principally consists of goods and services that the young people
primarily affected by the Mandate do not purchase . They are
quite simply not participants in that market, and cannot be made so
(and thereby subjected to regulation) by the simple device of
defining participants to include all those who will, later in their
lifetime, probably purchase the goods or services covered by the
mandated insurance.[ 2 ] Such a
definition of market participants is unprecedented, and were it to
be a premise for the exercise of national power, it would have no
principled limits.

															In a variation on this attempted exercise of
federal power, the Government points out that Congress in this Act
has purported to regulate “economic and financial decision[s] to
forego [sic] health insurance coverage and [to] attempt to
self-insure,” 42 U. S. C. §18091(2)(A), since those
decisions have “a substantial and deleterious effect on interstate
commerce,” Petitioners’ Minimum Coverage Brief 34. But as the
discussion above makes clear, the decision to forgo participation
in an interstate market is not itself commercial activity (or
indeed any activity at all) within Congress’ power to regulate. It
is true that, at the end of the day, it is inevitable that each
American will affect commerce and become a part of it, even if not
by choice. But if every person comes within the Commerce Clause
power of Congress to regulate by the simple reason that he will one
day engage in commerce, the idea of a limited Government power is
at an end. Wickard v. Filburn has been
regarded as the most expansive assertion of the commerce power in
our history. A close second is Perez v. United
States , 402 U.S.
146 (1971), which upheld a statute criminalizing the eminently
local activity of loan-sharking. Both of those cases, however,

															involved commercial activity. To go
beyond that, and to say that the failure to grow wheat or the
refusal to make loans affects commerce, so that growing and lending
can be federally compelled, is to extend federal power to virtually
everything. All of us consume food, and when we do so the Federal
Government can prescribe what its quality must be and even how much
we must pay. But the mere fact that we all consume food and are
thus, sooner or later, participants in the “market” for food, does
not empower the Government to say when and what we will buy. That
is essentially what this Act seeks to do with respect to the
purchase of health care. It exceeds federal power.

															C

															A few respectful responses to Justice
Ginsburg’s dissent on the issue of the Mandate are in order. That
dissent duly recites the test of Commerce Clause power that our
opinions have applied, but disregards the premise the test
contains. It is true enough that Congress needs only a
“ ‘rational basis’ for concluding that the regulated
activity substantially affects interstate commerce,” ante , at 15 (em- phasis added). But it must be activity affecting com- merce that is regulated, and not
merely the failure to engage in commerce. And one is not now
purchasing the health care covered by the insurance mandate simply
because one is likely to be purchasing it in the future. Our test’s
premise of regulated activity is not invented out of whole cloth,
but rests upon the Constitution’s requirement that it be commerce
which is regulated. If all inactivity affecting commerce is
commerce, commerce is everything. Ultimately the dissent is driven
to saying that there is really no difference between action and
inaction, ante , at 26, a proposition that has never
recommended itself, neither to the law nor to common sense. To say,
for example, that the inaction here consists of activity in “the
self-insurance market,” ibid. , seems to us wordplay. By
parity of reasoning the failure to buy a car can be called
participation in the non-private-car-transportation market. Com-
merce becomes everything.

															The dissent claims that we “fai[l] to explain
why the individual mandate threatens our constitutional order.” Ante , at 35. But we have done so. It threatens that order
because it gives such an expansive meaning to the Commerce Clause
that all private conduct (including failure to act) becomes
subject to federal control, effectively destroying the
Constitution’s division of governmental powers. Thus the dissent,
on the theories proposed for the validity of the Mandate, would
alter the accepted constitutional relation between the individual
and the National Government. The dissent protests that the
Necessary and Proper Clause has been held to include “the power to
enact criminal laws, . . . the power to imprison,
. . . and the power to create a national bank,” ante , at 34–35. Is not the power to compel purchase of
health insurance much lesser? No, not if (unlike those other
dispositions) its application rests upon a theory that everything
is within federal control simply because it exists.

															The dissent’s exposition of the wonderful things
the Fed- eral Government has achieved through exercise of its
assigned powers, such as “the provision of old-age and survivors’
benefits” in the Social Security Act, ante , at 2, is quite
beside the point. The issue here is whether the federal government
can impose the Individual Mandate through the Commerce Clause. And
the relevant history is not that Congress has achieved wide and
wonderful results through the proper exercise of its assigned
powers in the past, but that it has never before used the Commerce
Clause to compel entry into commerce.[ 3 ] The dissent treats the Constitution as though it is an
enumeration of those problems that the Federal Government can
address—among which, it finds, is “the Nation’s course in the
economic and social welfare realm,” ibid. , and more
specifically “the problem of the uninsured,” ante, at 7. The
Constitution is not that. It enumerates not federally soluble problems , but federally available powers. The Federal
Government can address whatever problems it wants but can bring to
their solution only those powers that the Constitution confers,
among which is the power to regulate commerce. None of our cases
say anything else. Article I contains no
whatever-it-takes-to-solve-a-national-problem power.

															The dissent dismisses the conclusion that the
power to compel entry into the health-insurance market would
include the power to compel entry into the new-car or broccoli
markets. The latter purchasers, it says, “will be obliged to pay at
the counter before receiving the vehicle or nourishment,” whereas
those refusing to purchase health-insurance will ultimately get
treated anyway, at others’ expense. Ante , at 21. “[T]he
unique attributes of the health-care market . . . give
rise to a significant free-riding problem that does not occur in
other markets.” Ante, at 28. And “a vegetable-purchase
mandate” (or a car-purchase mandate) is not “likely to have a
substantial effect on the health-care costs” borne by other
Americans. Ante, at 29. Those differences make a very good
argument by the dissent’s own lights, since they show that the
failure to purchase health insurance, unlike the failure to
purchase cars or broccoli, creates a national, social-welfare
problem that is (in the dissent’s view) included among the
unenumerated “problems” that the Constitution authorizes the
Federal Government to solve. But those differences do not show that
the failure to enter the health-insurance market, unlike the
failure to buy cars and broccoli, is an activity that
Congress can “regulate.” (Of course one day the failure of some of
the public to purchase Amer- ican cars may endanger the existence
of domestic automobile manufacturers; or the failure of some to eat
broccoli may be found to deprive them of a newly discovered cancer-
fighting chemical which only that food contains, producing
health-care costs that are a burden on the rest of us—in which
case, under the theory of Justice Ginsburg’s dissent, moving
against those inactivities will also come within the Federal
Government’s unenumerated problem-solving powers.)

															II The Taxing Power As far as §5000A is concerned, we would stop
there. Congress has attempted to regulate beyond the scope of its
Commerce Clause authority,[ 4 ]
and §5000A is therefore invalid. The Government contends, however,
as expressed in the caption to Part II of its brief, that “the
minimum coverage provision is independently authorized by
congress’s taxing power.” Petitioners’ Minimum Coverage Brief 52.
The phrase “independently authorized” suggests the existence of a
creature never hitherto seen in the United States Reports: A
penalty for constitutional purposes that is also a tax for
constitutional purposes. In all our cases the two are mutually
exclusive. The provision challenged under the Constitution is
either a penalty or else a tax. Of course in many cases what was a
regu- latory mandate enforced by a penalty could have been imposed as a tax upon permissible action; or what was im- posed as
a tax upon permissible action could have been a regulatory
mandate enforced by a penalty. But we know of no case, and the
Government cites none, in which the imposition was, for
constitutional purposes, both.[ 5 ] The two are mutually exclusive. Thus, what the
Government’s caption should have read was “alternatively, the
minimum coverage provision is not a mandate-with-penalty but a
tax.” It is important to bear this in mind in evaluating the tax
argument of the Government and of those who support it: The issue
is not whether Congress had the power to frame the
minimum-coverage provision as a tax, but whether it did so.

															In answering that question we must, if “fairly
possible,” Crowell v. Benson , 285 U.S.
22 , 62 (1932), construe the provision to be a tax rather than a
mandate-with-penalty, since that would render it constitutional
rather than un- constitutional (ut res magis valeat quam
pereat). But we cannot rewrite the statute to be what it is
not. “ ‘ “[A]l- though this Court will often strain to
construe legis- lation so as to save it against constitutional
attack, it must not and will not carry this to the point of
perverting the purpose of a statute . . .” or judicially
rewriting it.’ ” Commodity Futures Trading Comm’n v. Schor , 478 U.S.
833 , 841 (1986) (quoting Aptheker v. Secretary of
State , 378 U.S.
500 , 515 (1964), in turn quoting Scales v. United
States , 367 U.S.
203 , 211 (1961)). In this case, there is simply no way,
“without doing violence to the fair meaning of the words used,” Grenada County Supervisors v. Brogden , 112 U.S.
261 , 269 (1884), to escape what Congress enacted: a mandate
that individuals maintain minimum essential coverage, enforced by a
penalty.

															Our cases establish a clear line between a tax
and a penalty: “ ‘[A] tax is an enforced contribution to
provide for the support of government; a penalty . . . is
an exaction imposed by statute as punishment for an unlawful
act.’ ” United States v. Reorganized CF&I
Fabricators of Utah, Inc. , 518
U.S. 213 , 224 (1996) (quoting United States v. La
Franca , 282 U.S.
568 , 572 (1931)). In a few cases, this Court has held that a
“tax” imposed upon private conduct was so onerous as to be in
effect a penalty. But we have never held— never —that a
penalty imposed for violation of the law was so trivial as to be in
effect a tax. We have never held that any exaction imposed
for violation of the law is an exercise of Congress’ taxing
power—even when the statute calls it a tax, much less when
(as here) the statute repeatedly calls it a penalty. When an act
“adopt[s] the criteria of wrongdoing” and then imposes a monetary
penalty as the “principal consequence on those who transgress its
standard,” it creates a regulatory penalty, not a tax. Child
Labor Tax Case , 259 U.S.
20 , 38 (1922).

															So the question is, quite simply, whether the
exaction here is imposed for violation of the law. It unquestion-
ably is. The minimum-coverage provision is found in 26
U. S. C. §5000A, entitled “ Requirement to maintain
minimum essential coverage.” (Emphasis added.) It commands that
every “applicable individual shall . . . ensure
that the individual . . . is covered under minimum
essential coverage.” Ibid. (emphasis added). And the
immediately following provision states that, “[i]f . . .
an applicable individual . . . fails to meet the requirement of subsection (a) . . . there is
hereby imposed . . . a penalty .” §5000A(b)
(emphasis added). And several of Congress’ legislative “findings”
with regard to §5000A confirm that it sets forth a legal
requirement and constitutes the assertion of regulatory power, not
mere taxing power. See 42 U. S. C. §18091(2)(A) (“The
requirement regulates activity . . .”); §18091(2)(C)
(“The requirement . . . will add millions of new
consumers to the health insurance market . . .”);
§18091(2)(D) (“The requirement achieves near-universal coverage”);
§18091(2)(H) (“The requirement is an essential part of this larger
regulation of economic activity, and the absence of the requirement
would undercut Federal regulation of the health insurance market”);
§18091(3) (“[T]he Supreme Court of the United States ruled that
insurance is interstate commerce subject to Federal
regulation”).

															The Government and those who support its view on
the tax point rely on New York v. United States , 505 U.S.
144 , to justify reading “shall” to mean “may.” The “shall” in
that case was contained in an introductory provision—a recital that
provided for no legal consequences—which said that “[e]ach State
shall be responsible for providing . . . for the disposal
of . . . low-level radioactive waste.” 42
U. S. C. §2021c(a)(1)(A). The Court did not hold that
“shall” could be construed to mean “may,” but rather that this
preliminary provision could not impose upon the oper- ative
provisions of the Act a mandate that they did not contain: “We
. . . decline petitioners’ invitation to con- strue
§2021c(a)(1)(A), alone and in isolation, as a command to the States
independent of the remainder of the Act.” New York , 505
U. S., at 170. Our opinion then proceeded to “consider each
[of the three operative provisions] in turn.” Ibid . Here the
mandate—the “shall”—is contained not in an inoperative preliminary
recital, but in the dispositive operative provision itself. New
York provides no support for reading it to be permissive.

															Quite separately, the fact that Congress (in its
own words) “imposed . . . a penalty,” 26
U. S. C. §5000A(b)(1), for failure to buy insurance is
alone sufficient to render that failure unlawful. It is one of the
canons of interpretation that a statute that penalizes an act makes
it unlawful: “[W]here the statute inflicts a penalty for doing an
act, although the act itself is not expressly prohibited, yet to do
the act is unlawful, because it cannot be supposed that the
Legislature intended that a penalty should be inflicted for a
lawful act.” Powhatan Steamboat Co. v. Appomattox R.
Co. , 24 How. 247, 252 (1861). Or in the words of Chancellor
Kent: “If a statute inflicts a penalty for doing an act, the
penalty implies a prohibition, and the thing is unlawful, though
there be no prohibitory words in the statute.” 1 J. Kent,
Commentaries on American Law 436 (1826).

															We never have classified as a tax an exaction
imposed for violation of the law, and so too, we never have
classified as a tax an exaction described in the legislation itself
as a penalty. To be sure, we have sometimes treated as a tax a
statutory exaction (imposed for something other than a violation of
law) which bore an agnostic label that does not entail the
significant constitutional consequences of a penalty—such as
“license” ( License Tax Cases , 5 Wall. 462 (1867)) or
“surcharge” ( New York v. United States , supra. ). But we have never— never— treated as a tax an
exaction which faces up to the critical difference between a tax
and a penalty, and explicitly denominates the exaction a “penalty.”
Eighteen times in §5000A itself and else- where throughout the Act,
Congress called the exaction in §5000A(b) a “penalty.”

															That §5000A imposes not a simple tax but a
mandate to which a penalty is attached is demonstrated by the fact
that some are exempt from the tax who are not ex- empt from the
mandate—a distinction that would make no sense if the mandate were
not a mandate. Section 5000A(d) exempts three classes of people
from the definition of “applicable individual” subject to the
minimum coverage requirement: Those with religious objections or
who participate in a “health care sharing ministry,” §5000A(d)(2);
those who are “not lawfully present” in the United States,
§5000A(d)(3); and those who are incarcerated, §5000A(d)(4). Section
5000A(e) then creates a separate set of exemptions, excusing from
liability for the penalty certain individuals who are subject to
the minimum coverage requirement: Those who cannot afford coverage,
§5000A(e)(1); who earn too little income to require filing a tax
return, §5000A(e)(2); who are members of an Indian tribe,
§5000A(e)(3); who experience only short gaps in coverage,
§5000A(e)(4); and who, in the judgment of the Secretary of Health
and Human Services, “have suffered a hardship with respect to the
capability to obtain coverage,” §5000A(e)(5). If §5000A were a tax,
these two classes of exemption would make no sense; there being no
requirement, all the exemptions would attach to the penalty
(renamed tax) alone.

															In the face of all these indications of a
regulatory requirement accompanied by a penalty, the Solicitor
General assures us that “neither the Treasury Department nor the
Department of Health and Human Services interprets Section 5000A as
imposing a legal obligation,” Petitioners’ Minimum Coverage Brief
61, and that “[i]f [those subject to the Act] pay the tax penalty,
they’re in compliance with the law,” Tr. of Oral Arg. 50 (Mar. 26,
2012). These self-serving litigating positions are entitled to no
weight. What counts is what the statute says, and that is entirely
clear. It is worth noting, moreover, that these assurances
contradict the Government’s position in related litigation. Shortly
before the Affordable Care Act was passed, the Commonwealth of
Virginia enacted Va. Code Ann. §38.2–3430.1:1 (Lexis Supp. 2011),
which states, “No resident of [the] Commonwealth . . .
shall be required to obtain or maintain a policy of individual
insurance coverage except as required by a court or the Department
of Social Services . . . .” In opposing Virginia’s
assertion of standing to challenge §5000A based on this statute,
the Government said that “if the minimum coverage provision is
unconstitutional, the [Virginia] statute is unnecessary, and if the
minimum coverage provision is upheld, the state statute is void
under the Supremacy Clause.” Brief for Appellant in No. 11–1057
etc. (CA4), p. 29. But it would be void under the Supremacy
Clause only if it was contradicted by a federal “require[ment] to
obtain or maintain a policy of individual insurance coverage.”

															Against the mountain of evidence that the
minimum coverage requirement is what the statute calls it—a
requirement—and that the penalty for its violation is what the
statute calls it—a penalty—the Government brings forward the
flimsiest of indications to the contrary. It notes that “[t]he
minimum coverage provision amends the Internal Revenue Code to
provide that a non-exempted individual . . . will owe a monetary
penalty, in addition to the income tax itself,” and that “[t]he
[Internal Revenue Service (IRS)] will assess and collect the
penalty in the same manner as assessable penalties under the
Internal Revenue Code.” Petitioners’ Minimum Coverage Brief 53. The
manner of collection could perhaps suggest a tax if IRS
penalty-collection were unheard-of or rare. It is not. See, e.g., 26 U. S. C. §527(j) (2006 ed.)
(IRS-collectible pen- alty for failure to make campaign-finance
disclosures); §5761(c) (IRS-collectible penalty for domestic sales
of to- bacco products labeled for export); §9707 (IRS-collectible
penalty for failure to make required health-insurance premium
payments on behalf of mining employees). In Reorganized CF&I
Fabricators of Utah, Inc. , 518 U.S.
213 , we held that an exaction not only enforced by the
Commissioner of Internal Revenue but even called a “tax” was
in fact a penalty. “[I]f the concept of penalty means anything,” we
said, “it means punishment for an unlawful act or omission.” Id., at 224. See also Lipke v. Lederer , 259 U.S.
557 (1922) (same). Moreover, while the penalty is assessed and
collected by the IRS, §5000A is administered both by that agency
and by the Department of Health and Human Services (and also the
Secretary of Veteran Affairs), see §5000A(e)(1)(D), (e)(5),
(f)(1)(A)(v), (f)(1)(E) (2006 ed., Supp. IV), which is responsible
for defining its substantive scope—a feature that would be quite
extraordinary for taxes.

															The Government points out that “[t]he amount of
the penalty will be calculated as a percentage of household income
for federal income tax purposes, subject to a floor and [a] ca[p],”
and that individuals who earn so little money that they “are not
required to file income tax returns for the taxable year are not
subject to the penalty” (though they are, as we discussed earlier,
subject to the mandate). Petitioners’ Minimum Coverage Brief 12,
53. But varying a penalty according to ability to pay is an utterly
familiar practice. See, e.g., 33 U. S. C. §1319(d)
(2006 ed., Supp. IV) (“In determining the amount of a civil penalty
the court shall consider . . . the economic impact of the
penalty on the violator”); see also 6 U. S. C. §488e(c);
7 U. S. C. §§7734(b)(2), 8313(b)(2); 12
U. S. C. §§1701q–1(d)(3), 1723i(c)(3), 1735f–14(c)(3),
1735f–15(d)(3), 4585(c)(2); 15 U. S. C. §§45(m)(1)(C),
77h–1(g)(3), 78u–2(d), 80a–9(d)(4), 80b–3(i)(4), 1681s(a)(2)(B),
1717a(b)(3), 1825(b)(1), 2615(a) (2)(B), 5408(b)(2); 33
U. S. C. §2716a(a).

															The last of the feeble arguments in favor of
petition- ers that we will address is the contention that what this
statute repeatedly calls a penalty is in fact a tax because it
contains no scienter requirement. The presence of such a
requirement suggests a penalty—though one can imagine a tax imposed
only on willful action; but the absence of such a
requirement does not suggest a tax. Penalties for
absolute-liability offenses are commonplace. And where a statute is
silent as to scienter, we traditionally presume a mens rea requirement if the statute imposes a “severe penalty.” Staples v. United States , 511
U.S. 600 , 618 (1994). Since we have an entire jurisprudence
addressing when it is that a scienter requirement should be
inferred from a penalty, it is quite illogical to suggest that a
penalty is not a penalty for want of an express scienter
requirement.

															And the nail in the coffin is that the mandate
and penalty are located in Title I of the Act, its operative core,
rather than where a tax would be found—in Title IX, containing the
Act’s “Revenue Provisions.” In sum, “the terms of [the] act
rende[r] it unavoidable,” Parsons v. Bedford , 3 Pet.
433, 448 (1830), that Congress imposed a regulatory penalty, not a
tax.

															For all these reasons, to say that the
Individual Mandate merely imposes a tax is not to interpret the
statute but to rewrite it. Judicial tax-writing is particularly
troubl- ing. Taxes have never been popular, see, e.g., Stamp
Act of 1765, and in part for that reason, the Constitution requires
tax increases to originate in the House of Representatives. See
Art. I, §7, cl. 1. That is to say, they must originate in the
legislative body most accountable to the people, where legislators
must weigh the need for the tax against the terrible price they
might pay at their next election, which is never more than two
years off. The Federalist No. 58 “defend[ed] the decision to give
the origination power to the House on the ground that the Chamber
that is more accountable to the people should have the primary role
in raising revenue.” United States v. Munoz-Flores , 495 U.S.
385 , 395 (1990). We have no doubt that Congress knew precisely
what it was doing when it rejected an earlier version of this
legislation that imposed a tax instead of a
requirement-with-penalty. See Affordable Health Care for America
Act, H. R. 3962, 111th Cong., 1st Sess., §501 (2009);
America’s Healthy Future Act of 2009, S. 1796, 111th Cong., 1st
Sess., §1301. Imposing a tax through judicial legislation inverts
the constitutional scheme, and places the power to tax in the
branch of government least accountable to the citizenry.

															Finally, we must observe that rewriting §5000A
as a tax in order to sustain its constitutionality would force us
to confront a difficult constitutional question: whether this is a
direct tax that must be apportioned among the States according to
their population. Art. I, §9, cl. 4. Perhaps it is not (we
have no need to address the point); but the meaning of the Direct
Tax Clause is famously unclear, and its application here is a
question of first impression that deserves more thoughtful
consideration than the lick-and-a-promise accorded by the
Government and its supporters. The Government’s opening brief did
not even address the question—perhaps because, until today, no
federal court has accepted the implausible argument that §5000A is
an exercise of the tax power. And once respondents raised the
issue, the Government devoted a mere 21 lines of its reply brief to
the issue. Petitioners’ Minimum Coverage Reply Brief 25. At oral
argument, the most prolonged statement about the issue was just
over 50 words. Tr. of Oral Arg. 79 (Mar. 27, 2012). One would
expect this Court to demand more than fly-by-night briefing and
argument before deciding a difficult constitutional question of
first impression.

															III The Anti-Injunction Act There is another point related to the
Individual Mandate that we must discuss—a point that logically
should have been discussed first: Whether jurisdiction over the
challenges to the minimum-coverage provision is precluded by the
Anti-Injunction Act, which 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) (2006 ed.).

															We have left the question to this point because
it seemed to us that the dispositive question whether the
minimum-coverage provision is a tax is more appropriately addressed
in the significant constitutional context of whether it is an
exercise of Congress’ taxing power. Having found that it is not, we
have no difficulty in deciding that these suits do not have “the
purpose of restraining the assessment or collection of any
tax.”[ 6 ]

															The Government and those who support its
position on this point make the remarkable argument that §5000A is
not a tax for purposes of the Anti-Injunction Act, see Brief for
Petitioners in No. 11–398 (Anti-Injunction Act), but is a tax for
constitutional purposes, see Petitioners’ Minimum Coverage Brief
52–62. The rhetorical device that tries to cloak this argument in
superficial plausibility is the same device employed in arguing
that for constitutional purposes the minimum-coverage provision is
a tax: confusing the question of what Congress did with the
question of what Congress could have done. What qualifies as
a tax for purposes of the Anti-Injunction Act, unlike what
qualifies as a tax for purposes of the Constitution, is entirely
within the control of Congress. Compare Bailey v. George , 259 U.S.
16 , 20 (1922)
(Anti-Injunction Act barred suit to restrain collections under the
Child Labor Tax Law), with Child Labor Tax Case , 259
U. S., at 36–41 (holding the same law unconstitutional as
exceeding Congress’ taxing power). Congress could have defined
“tax” for purposes of that statute in such fashion as to exclude
some exactions that in fact are “taxes .” It might have
prescribed, for example, that a particular exercise of the taxing
power “shall not be regarded as a tax for purposes of the
Anti-Injunction Act.” But there is no such prescription here. What
the Government would have us believe in these cases is that the
very same textual indications that show this is not a tax
under the Anti-Injunction Act show that it is a tax under
the Constitution. That carries ver- bal wizardry too far, deep into
the forbidden land of the sophists.

															IV The Medicaid Expansion We now consider respondents’ second challenge
to the constitutionality of the ACA, namely, that the Act’s
dramatic expansion of the Medicaid program exceeds Congress’ power
to attach conditions to federal grants to the States.

															The ACA does not legally compel the States to
participate in the expanded Medicaid program, but the Act
authorizes a severe sanction for any State that refuses to go
along: termination of all the State’s Medicaid funding. For the
average State, the annual federal Medicaid subsidy is equal to more
than one-fifth of the State’s expenditures.[ 7 ] A State forced out of the program would not only
lose this huge sum but would almost certainly find it necessary to
increase its own health-care expenditures substantially, requiring
either a drastic reduction in funding for other programs or a large
increase in state taxes. And these new taxes would come on top of
the federal taxes already paid by the State’s citizens to fund the
Medicaid program in other States.

															The States challenging the constitutionality of
the ACA’s Medicaid Expansion contend that, for these practical
reasons, the Act really does not give them any choice at all. As
proof of this, they point to the goal and the struc- ture of the
ACA. The goal of the Act is to provide near-universal medical
coverage, 42 U. S. C. §18091(2)(D), and without 100% State
participation in the Medicaid program, attainment of this goal
would be thwarted. Even if States could elect to remain in the old
Medicaid program, while declining to participate in the Expansion,
there would be a gaping hole in coverage. And if a substantial
number of States were entirely expelled from the program, the
number of persons without coverage would be even higher.

															In light of the ACA’s goal of near-universal
coverage, petitioners argue, if Congress had thought that anything
less than 100% state participation was a realistic possibility,
Congress would have provided a backup scheme. But no such scheme is
to be found anywhere in the more than 900 pages of the Act. This
shows, they maintain, that Congress was certain that the ACA’s
Medicaid offer was one that no State could refuse.

															In response to this argument, the Government
contends that any congressional assumption about uniform state
participation was based on the simple fact that the offer of
federal funds associated with the expanded coverage is such a
generous gift that no State would want to turn it down.

															To evaluate these arguments, we consider the
extent of the Federal Government’s power to spend money and to
attach conditions to money granted to the States.

															A

															No one has ever doubted that the Constitution
authorizes the Federal Government to spend money, but for many
years the scope of this power was unsettled. The Constitution
grants Congress the power to collect taxes “to . . .
provide for the . . . general Welfare of the United
States,” Art. I, §8, cl. 1, and from “the foundation of the Nation
sharp differences of opinion have persisted as to the true
interpretation of the phrase” “the general welfare.” Butler ,
297 U. S., at 65. Madison, it has been said, thought that the
phrase “amounted to no more than a reference to the other powers
enumerated in the subsequent clauses of the same section,” while
Hamilton “maintained the clause confers a power separate and
distinct from those later enumerated [and] is not restricted in
meaning by the grant of them.” Ibid .

															The Court resolved this dispute in Butler . Writing for the Court, Justice Roberts opined that
the Madisonian view would make Article I’s grant of the spending
power a “mere tautology.” Ibid . To avoid that, he adopted
Hamilton’s approach and found that “the power of Congress to
authorize expenditure of public moneys for public purposes is not
limited by the direct grants of legislative power found in the
Constitution.” Id., at 66. Instead, he wrote, the spending
power’s “confines are set in the clause which confers it, and not
in those of section 8 which bestow and define the legislative
powers of the Congress.” Ibid. ; see also Steward Machine
Co. v. Davis , 301 U.S.
548 , 586–587 (1937); Helvering v. Davis , 301 U.S.
619 , 640 (1937).

															The power to make any expenditure that furthers
“the general welfare” is obviously very broad, and shortly after Butler was decided the Court gave Congress wide leeway to
decide whether an expenditure qualifies. See Helvering , 301
U. S., at 640–641. “The discretion belongs to Congress,” the
Court wrote, “unless the choice is clearly wrong, a display of
arbitrary power, not an exercise of judgment.” Id. , at 640.
Since that time, the Court has never held that a federal
expenditure was not for “the general welfare.”

															B

															One way in which Congress may spend to promote
the general welfare is by making grants to the States. Monetary
grants, so-called grants-in-aid, became more frequent during the
1930’s, G. Stephens & N. Wikstrom, Ameri- can Intergovernmental
Relations—A Fragmented Federal Polity 83 (2007), and by 1950 they
had reached $20 billion[ 8 ] or
11.6% of state and local government expenditures from their own
sources.[ 9 ] By 1970 this number
had grown to $123.7 billion[ 10 ] or 29.1% of state and local government expenditures
from their own sources.[ 11 ]
As of 2010, fed- eral outlays to state and local governments came
to over $608 billion or 37.5% of state and local government
expenditures.[ 12 ]

															When Congress makes grants to the States, it
customarily attaches conditions, and this Court has long held that
the Constitution generally permits Congress to do this. See Pennhurst State School and Hospital v . Halderman , 451 U.S.
1 , 17 (1981); South Dakota v . Dole , 483 U.S.
203 , 206 (1987); Fullilove v . Klutznick , 448 U.S.
448 , 474 (1980) (opinion of Burger, C. J.); Steward
Machine, supra, at 593.

															C

															This practice of attaching conditions to
federal funds greatly increases federal power. “[O]bjectives not
thought to be within Article I’s enumerated legislative fields, may
nevertheless be attained through the use of the spending power and
the conditional grant of federal funds.” Dole , supra ,
at 207 (internal quotation marks and citation omitted); see also College Savings Bank v. Florida Prepaid Postsecondary Ed.
Expense Bd. , 527 U.S.
666 , 686 (1999) (by attaching conditions to federal funds,
Congress may induce the States to “tak[e] certain actions that
Congress could not require them to take”).

															This formidable power, if not checked in any
way, would present a grave threat to the system of federalism
created by our Constitution. If Congress’ “Spending Clause power to
pursue objectives outside of Article I’s enumerated legislative
fields,” Davis v. Monroe County Bd. of Ed. , 526 U.S.
629 , 654 (1999) (Kennedy, J., dissenting) (internal quotation
marks omitted), is “limited only by Congress’ notion of the general
welfare, the reality, given the vast financial resources of the
Federal Government, is that the Spending Clause gives ‘power to the
Congress to tear down the barriers, to invade the states’
jurisdiction, and to become a parliament of the whole people,
subject to no restrictions save such as are self-imposed,’ ” Dole , supra , at 217 (O’Connor, J., dissenting)
(quoting Butler , 297 U. S., at 78). “[T]he Spending
Clause power, if wielded without concern for the federal balance,
has the potential to obliterate distinctions between national and
local spheres of interest and power by permitting the Federal
Government to set policy in the most sensitive areas of traditional
state concern, areas which otherwise would lie outside its reach.” Davis , supra, at 654–655 (Kennedy, J.,
dissenting).

															Recognizing this potential for abuse, our cases
have long held that the power to attach conditions to grants to the
States has limits. See, e.g., Dole , supra , at
207–208; id ., at 207 (spending power is “subject to several
general re- strictions articulated in our cases”). For one thing,
any such conditions must be unambiguous so that a State at least
knows what it is getting into. See Pennhurst , supra, at 17. Conditions must also be related “to the federal interest in
particular national projects or programs,” Massachusetts v. United States , 435 U.S.
444 , 461 (1978), and the conditional grant of federal funds may
not “induce the States to engage in activities that would
themselves be unconstitutional,” Dole , supra, at 210;
see Lawrence County v. Lead-Deadwood School Dist.
No. 40–1 , 469 U.S.
256 , 269–270 (1985). Finally, while Congress may seek to induce
States to accept conditional grants, Congress may not cross the
“point at which pressure turns into compulsion, and ceases to be
inducement.” Steward Machine , 301 U. S., at 590.
Accord, College Savings Bank, supra, at 687; Metropolitan
Washington Airports Authority v. Citizens for Abatement of
Aircraft Noise, Inc. , 501 U.S.
252 , 285 (1991) (White, J., dissenting); Dole , supra , at 211.

															When federal legislation gives the States a real
choice whether to accept or decline a federal aid package, the
federal-state relationship is in the nature of a contractual
relationship. See Barnes v . Gorman , 536 U.S.
181 , 186 (2002); Pennhurst , 451 U. S., at 17. And
just as a contract is voidable if coerced, “[t]he legitimacy of
Congress’ power to legislate under the spending power . . . rests
on whether the State voluntarily and knowingly accepts the
terms of the ‘contract.’ ” Ibid. (emphasis added). If a
federal spending program coerces participation the States have not
“exercise[d] their choice”—let alone made an “informed choice.” Id ., at 17, 25.

															Coercing States to accept conditions risks the
destruction of the “unique role of the States in our system.” Davis , supra , at 685 (Kennedy, J., dissenting).
“[T]he Constitution has never been understood to confer upon
Congress the ability to require the States to govern according to
Congress’ instructions.” New York , 505 U. S., at 162.
Congress may not “simply commandeer the legislative processes of
the States by directly compelling them to enact and enforce a
federal regulatory program.” Id. , at 161 (internal quotation
marks and brackets omitted). Congress effectively engages in this
impermissible compulsion when state participation in a federal
spending program is coerced, so that the States’ choice whether to
enact or administer a federal regulatory program is rendered
illusory.

															Where all Congress has done is to “encourag[e]
state regulation rather than compe[l] it, state governments remain
responsive to the local electorate’s preferences; state officials
remain accountable to the people. [But] where the Federal
Government compels States to regulate, the accountability of both
state and federal officials is diminished.” New York , supra, at 168. Amici who support the Government argue
that forcing state employees to implement a federal program is more
respectful of federalism than using federal workers to implement
that program. See, e.g. , Brief for Service Employees
International Union et al. as Amici Curiae in No.
11–398, pp. 25–26. They note that Congress, instead of expanding
Medicaid, could have established an entirely federal program to
provide coverage for the same group of people. By choosing to
structure Medicaid as a cooperative federal-state program, they
contend, Congress allows for more state control. Ibid .

															This argument reflects a view of federalism that
our cases have rejected—and with good reason. When Congress compels
the States to do its bidding, it blurs the lines of political
accountability. If the Federal Government makes a controversial
decision while acting on its own, “it is the Federal Government
that makes the decision in full view of the public, and it will be
federal officials that suffer the consequences if the decision
turns out to be detrimental or unpopular.” New York , 505
U. S., at 168. But when the Federal Government compels the
States to take unpopular actions, “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; see Printz , supra, at 930. For this reason,
federal officeholders may view this “departur[e] from the federal
structure to be in their personal interests . . . as a
means of shifting responsibility for the eventual decision.” New
York , 505 U. S., at 182–183. And even state officials may
favor such a “departure from the constitutional plan,” since
uncertainty concerning responsibility may also permit them to
escape accountability. Id ., at 182. If a program is popular,
state officials may claim credit; if it is unpopular, they may
protest that they were merely responding to a federal
directive.

															Once it is recognized that spending-power
legislation cannot coerce state participation, two questions
remain: (1) What is the meaning of coercion in this context? (2) Is
the ACA’s expanded Medicaid coverage coercive? We now turn to those
questions.

															D

															1

															The answer to the first of these questions—the
meaning of coercion in the present context—is straightforward. As
we have explained, the legitimacy of attaching conditions to
federal grants to the States depends on the voluntariness of the
States’ choice to accept or decline the offered package. Therefore,
if States really have no choice other than to accept the package,
the offer is coercive, and the conditions cannot be sustained under
the spending power. And as our decision in South Dakota v . Dole makes clear, theoretical voluntariness is not
enough.

															In South Dakota v . Dole , we
considered whether the spending power permitted Congress to
condition 5% of the State’s federal highway funds on the State’s
adoption of a minimum drinking age of 21 years. South Dakota argued
that the program was impermissibly coercive, but we disagreed,
reasoning that “Congress ha[d] directed only that a State desiring
to establish a minimum drinking age lower than 21 lose a relatively
small percentage of certain federal highway funds.” 483 U. S.,
at 211. Because “all South Dakota would lose if she adhere[d] to
her chosen course as to a suitable minimum drinking age [was] 5% of
the funds otherwise obtainable under specified high- way grant
programs,” we found that “Congress ha[d] of- fered relatively mild
encouragement to the States to enact higher minimum drinking ages
than they would otherwise choose.” Ibid . Thus, the decision
whether to comply with the federal condition “remain[ed] the
prerogative of the States not merely in theory but in fact ,”
and so the program at issue did not exceed Congress’ power. Id ., at 211–212 (emphasis added).

															The question whether a law enacted under the
spending power is coercive in fact will sometimes be difficult, but
where Congress has plainly “crossed the line distinguishing
encouragement from coercion,” New York , supra, at
175, a federal program that coopts the States’ political processes
must be declared unconstitutional. “[T]he federal balance is too
essential a part of our constitutional structure and plays too
vital a role in securing freedom for us to admit inability to
intervene.” Lopez , 514 U. S., at 578 (Kennedy, J.,
concurring).

															2

															The Federal Government’s argument in this case
at best pays lip service to the anticoercion principle. The Federal
Government suggests that it is sufficient if States are “free, as a matter of law , to turn down” federal funds. Brief for
Respondents in No. 11–400, p. 17 (emphasis added); see also id ., at 25. According to the Federal Government, neither the
amount of the offered federal funds nor the amount of the federal
taxes extracted from the taxpayers of a State to pay for the
program in question is relevant in determining whether there is
impermissible coercion. Id ., at 41–46.

															This argument ignores reality. When a heavy
federal tax is levied to support a federal program that offers
large grants to the States, States may, as a practical matter, be
unable to refuse to participate in the federal program and to
substitute a state alternative. Even if a State believes that the
federal program is ineffective and inefficient, withdrawal would
likely force the State to impose a huge tax increase on its
residents, and this new state tax would come on top of the federal
taxes already paid by residents to support subsidies to
participating States.[ 13 ]

															Acceptance of the Federal Government’s
interpreta- tion of the anticoercion rule would permit Congress to
dic- tate policy in areas traditionally governed primarily at the
state or local level. Suppose, for example, that Congress enacted
legislation offering each State a grant equal to the State’s entire
annual expenditures for primary and secondary education. Suppose
also that this funding came with conditions governing such things
as school curriculum, the hiring and tenure of teachers, the
drawing of school districts, the length and hours of the school
day, the school calendar, a dress code for students, and rules for
student discipline. As a matter of law , a State could turn
down that offer, but if it did so, its residents would not only be
required to pay the federal taxes needed to support this expensive
new program, but they would also be forced to pay an equivalent
amount in state taxes. And if the State gave in to the federal law,
the State and its subdivisions would surrender their traditional
authority in the field of education. Asked at oral argument whether
such a law would be allowed under the spending power, the Solicitor
General responded that it would. Tr. of Oral Arg. 44–45 (Mar. 28,
2012).

															E

															Whether federal spending legislation crosses
the line from enticement to coercion is often difficult to
determine, and courts should not conclude that legislation is
unconstitutional on this ground unless the coercive nature of an
offer is unmistakably clear. In this case, however, there can be no
doubt. In structuring the ACA, Congress unambiguously signaled its
belief that every State would have no real choice but to go along
with the Medicaid Expansion. If the anticoercion rule does not
apply in this case, then there is no such rule.

															1

															The dimensions of the Medicaid program lend
strong support to the petitioner States’ argument that refusing to
accede to the conditions set out in the ACA is not a realistic
option. Before the ACA’s enactment, Medicaid funded medical care
for pregnant women, families with dependents, children, the blind,
the elderly, and the disabled. See 42 U. S. C.
§1396a(a)(10) (2006 ed., Supp. IV). The ACA greatly expands the
program’s reach, making new funds available to States that agree to
extend coverage to all individuals who are under age 65 and have
incomes below 133% of the federal poverty line. See §1396a(a)
(10)(A)(i)(VIII). Any State that refuses to expand its Medicaid
programs in this way is threatened with a severe sanction: the loss
of all its federal Medicaid funds. See §1396c (2006 ed.).

															Medicaid has long been the largest federal
program of grants to the States. See Brief for Respondents in No.
11–400, at 37. In 2010, the Federal Government directed more than
$552 billion in federal funds to the States. See Nat. Assn. of
State Budget Officers, 2010 State Expenditure Report: Examining
Fiscal 2009–2011 State Spending, p. 7 (2011) (NASBO Report).
Of this, more than $233 billion went to pre-expansion Medicaid. See id. , at 47.[ 14 ] This amount equals nearly 22% of all state expenditures
combined . See id ., at 7.

															The States devote a larger percentage of their
budgets to Medicaid than to any other item. Id., at 5.
Federal funds account for anywhere from 50% to 83% of each State’s
total Medicaid expenditures, see §1396d(b) (2006 ed., Supp. IV);
most States receive more than $1 billion in federal Medicaid
funding; and a quarter receive more than $5 billion, NASBO Report
47. These federal dollars total nearly two thirds—64.6%—of all
Medicaid expenditures nationwide.[ 15 ] Id., at 46.

															The Court of Appeals concluded that the States
failed to establish coercion in this case in part because the
“states have the power to tax and raise revenue, and therefore can
create and fund programs of their own if they do not like
Congress’s terms.” 648 F.3d 1235, 1268 (CA11 2011); see Brief for
Sen. Harry Reid et al. as Amici Curiae in No.
11–400, p. 21 (“States may always choose to decrease
expenditures on other programs or to raise revenues”). But the
sheer size of this federal spending program in relation to state
expenditures means that a State would be very hard pressed to
compensate for the loss of federal funds by cutting other spending
or raising additional revenue. Arizona, for example, commits 12% of
its state expenditures to Medicaid, and relies on the Federal
Government to provide the rest: $5.6 billion, equaling roughly
one-third of Arizona’s annual state expenditures of $17 billion.
See NASBO Report 7, 47. Therefore, if Arizona lost federal Medicaid
funding, the State would have to commit an additional 33% of all
its state expenditures to fund an equivalent state program along
the lines of pre-expansion Medicaid. This means that the State
would have to allocate 45% of its annual expenditures for that one
purpose. See ibid .

															The States are far less reliant on federal
funding for any other program. After Medicaid, the next biggest
federal funding item is aid to support elementary and secondary
education, which amounts to 12.8% of total federal outlays to the
States, see id ., at 7, 16, and equals only 6.6% of all state
expenditures combined. See ibid . In Arizona, for example,
although federal Medicaid expenditures are equal to 33% of all
state expenditures, federal education funds amount to only 9.8% of
all state expenditures. See ibid . And even in States with
less than average federal Medicaid funding, that funding is at
least twice the size of federal education funding as a percentage
of state expenditures. Id ., at 7, 16, 47.

															A State forced out of the Medicaid program would
face burdens in addition to the loss of federal Medicaid funding.
For example, a nonparticipating State might be found to be
ineligible for other major federal funding sources, such as
Temporary Assistance for Needy Families (TANF), which is premised
on the expectation that States will participate in Medicaid. See 42
U. S. C. §602(a)(3) (2006 ed.) (requiring that certain
beneficiaries of TANF funds be “eligible for medical assistance
under the State[’s Medicaid] plan”). And withdrawal or expulsion
from the Medicaid program would not relieve a State’s hospitals of
their obligation under federal law to provide care for patients who
are unable to pay for medical services. The Emer- gency Medical
Treatment and Active Labor Act, §1395dd, requires hospitals that
receive any federal funding to provide stabilization care for
indigent patients but does not offer federal funding to assist
facilities in carrying out its mandate. Many of these patients are
now covered by Medicaid. If providers could not look to the
Medicaid program to pay for this care, they would find it exceed-
ingly difficult to comply with federal law unless they were given
substantial state support. See, e.g. , Brief for Economists
as Amici Curiae in No 11–400, p. 11.

															For these reasons, the offer that the ACA makes
to the States—go along with a dramatic expansion of Medicaid or
potentially lose all federal Medicaid funding—is quite unlike
anything that we have seen in a prior spending-power case. In South Dakota v. Dole , the total amount that the
States would have lost if every single State had refused to comply
with the 21-year-old drinking age was approximately $614.7
million—or about 0.19% of all state expenditures combined. See Nat.
Assn. of State Budget Officers, 1989 (Fiscal Years 1987– 1989 Data)
State Expenditure Report 10, 84 (1989),
http://www.nasbo.org/publications-data/state-expenditure-report/archives.
South Dakota stood to lose, at most, funding that amounted to less
than 1% of its annual state expenditures. See ibid . Under
the ACA, by contrast, the Federal Government has threatened to
withhold 42.3% of all federal outlays to the states, or
approximately $233 billion. See NASBO Report 7, 10, 47. South
Dakota stands to lose federal funding equaling 28.9% of its annual
state expenditures. See id ., at 7, 47. Withholding $614.7
million, equaling only 0.19% of all state expenditures combined, is
aptly characterized as “relatively mild encouragement,” but
threatening to withhold $233 billion, equaling 21.86% of all state
expenditures combined, is a different matter.

															2

															What the statistics suggest is confirmed by
the goal and structure of the ACA. In crafting the ACA, Congress
clearly expressed its informed view that no State could possibly
refuse the offer that the ACA extends.

															The stated goal of the ACA is near-universal
health care coverage. To achieve this goal, the ACA mandates that
every person obtain a minimum level of coverage. It attempts to
reach this goal in several different ways. The guaranteed issue and
community-rating provisions are designed to make qualifying
insurance available and affordable for persons with medical
conditions that may require expensive care. Other ACA provisions
seek to make such policies more affordable for people of modest
means. Finally, for low-income individuals who are simply not able
to obtain insurance, Congress expanded Medicaid, transforming it
from a program covering only members of a limited list of
vulnerable groups into a program that provides at least the
requisite minimum level of coverage for the poor. See 42
U. S. C. §§1396a(a) (10)(A)(i)(VIII) (2006 ed., Supp.
IV), 1396u–7(a), (b)(5), 18022(a). This design was intended to
provide at least a specified minimum level of coverage for all
Americans, but the achievement of that goal obviously depends on
participation by every single State. If any State—not to mention
all of the 26 States that brought this suit—chose to decline the
federal offer, there would be a gaping hole in the ACA’s
coverage.

															It is true that some persons who are eligible
for Medicaid coverage under the ACA may be able to secure private
insurance, either through their employers or by obtain- ing
subsidized insurance through an exchange. See 26 U. S. C.
§36B(a) (2006 ed., Supp. IV); Brief for Respondents in No. 11–400,
at 12. But the new federal subsidies are not available to those
whose income is below the federal poverty level, and the ACA
provides no means, other than Medicaid, for these individuals to
obtain coverage and comply with the Mandate. The Government
counters that these people will not have to pay the penalty, see, e.g. , Tr. of Oral Arg. 68 (Mar. 28, 2012); Brief for
Respondents in No. 11–400, at 49–50, but that argument misses the
point: Without Medicaid, these individuals will not have coverage
and the ACA’s goal of near-universal coverage will be severely
frustrated.

															If Congress had thought that States might
actually refuse to go along with the expansion of Medicaid,
Congress would surely have devised a backup scheme so that the most
vulnerable groups in our society, those previously eligible for
Medicaid, would not be left out in the cold. But nowhere in the
over 900-page Act is such a scheme to be found. By contrast,
because Congress thought that some States might decline federal
funding for the operation of a “health benefit exchange,” Congress
provided a backup scheme; if a State declines to participate in the
operation of an exchange, the Federal Government will step in and
operate an exchange in that State. See 42 U. S. C.
§18041(c)(1). Likewise, knowing that States would not necessarily
provide affordable health insurance for aliens lawfully present in
the United States—because Medicaid does not require States to
provide such coverage—Con- gress extended the availability of the
new federal insurance subsidies to all aliens. See 26
U. S. C. §36B(c) (1)(B)(ii) (excepting from the income
limit individuals who are “not eligible for the medicaid program
. . . by reason of [their] alien status”). Congress did
not make these subsidies available for citizens with incomes below
the poverty level because Congress obviously assumed that they
would be covered by Medicaid. If Congress had contemplated that
some of these citizens would be left without Medicaid coverage as a
result of a State’s withdrawal or expulsion from the program,
Congress surely would have made them eligible for the tax subsidies
provided for low-income aliens.

															These features of the ACA convey an unmistakable
message: Congress never dreamed that any State would refuse to go
along with the expansion of Medicaid. Congress well understood that
refusal was not a practical option.

															The Federal Government does not dispute the
inference that Congress anticipated 100% state participation, but
it argues that this assumption was based on the fact that ACA’s
offer was an “exceedingly generous” gift. Brief for Respondents in
No. 11–400, at 50. As the Federal Government sees things, Congress
is like the generous benefactor who offers $1 million with few
strings attached to 50 randomly selected individuals. Just as this
benefactor might assume that all of these 50 individuals would snap
up his offer, so Congress assumed that every State would gratefully
accept the federal funds (and conditions) to go with the expansion
of Medicaid.

															This characterization of the ACA’s offer raises
obvious questions. If that offer is “exceedingly generous,” as the
Federal Government maintains, why have more than half the States
brought this lawsuit, contending that the offer is coercive? And
why did Congress find it necessary to threaten that any State
refusing to accept this “exceed- ingly generous” gift would risk
losing all Medicaid funds? Congress could have made just the new funding provided under the ACA contingent on acceptance
of the terms of the Medicaid Expansion. Congress took such an
approach in some earlier amendments to Medicaid, separating new
coverage requirements and funding from the rest of the program so
that only new funding was conditioned on new eligibility
extensions. See, e.g. , Social Security Amendments of 1972,
86Stat. 1465.

															Congress’ decision to do otherwise here reflects
its understanding that the ACA offer is not an “exceedingly
generous” gift that no State in its right mind would decline.
Instead, acceptance of the offer will impose very substantial costs
on participating States. It is true that the Federal Government
will bear most of the initial costs associated with the Medicaid
Expansion, first paying 100% of the costs of covering newly
eligible individuals between 2014 and 2016. 42 U. S. C.
§1396d(y). But that is just part of the picture. Participating
States will be forced to shoulder substantial costs as well,
because after 2019 the Federal Government will cover only 90% of
the costs associated with the Expansion, see ibid. , with
state spending projected to increase by at least $20 billion by
2020 as a consequence. Statement of Douglas W. Elmendorf, CBO’s
Analysis of the Major Health Care Legislation Enacted in March
2010, p. 24 (Mar. 30, 2011); see also R. Bovbjerg, B. Ormond,
& V. Chen, Kaiser Commission on Medicaid and the Uninsured,
State Budgets under Federal Health Reform: The Extent and Causes of
Variations in Estimated Impacts 4, n. 27 (Feb. 2011)
(estimating new state spending at $43.2 billion through 2019).
After 2019, state spending is expected to increase at a faster
rate; the CBO estimates new state spending at $60 billion through
2021. Statement of Douglas W. Elmendorf, supra, at 24. And
these costs may increase in the future because of the very real
possibility that the Federal Government will change funding terms
and reduce the percentage of funds it will cover. This would leave
the States to bear an increasingly large percentage of the bill.
See Tr. of Oral Arg. 74–76 (Mar. 28, 2012). Finally, after 2015,
the States will have to pick up the tab for 50% of all
administrative costs associated with implementing the new program,
see §§1396b(a)(2)–(5), (7) (2006 ed., Supp. IV), costs that could
approach $12 billion between fiscal years 2014 and 2020, see Dept.
of Health and Human Services, Center for Medicaid and Medicare
Services, 2010 Actuarial Report on the Financial Outlook for
Medicaid 30.

															In sum, it is perfectly clear from the goal and
structure of the ACA that the offer of the Medicaid Expansion was
one that Congress understood no State could refuse. The Medicaid
Expansion therefore exceeds Congress’ spending power and cannot be
implemented.

															F

															Seven Members of the Court agree that the
Medicaid Expansion, as enacted by Congress, is unconstitutional.
See Part IV–A to IV–E, supra ; Part IV–A, ante, at
45–55 (opinion of Roberts, C. J., joined by Breyer and Kagan,
JJ.). Because the Medicaid Expansion is unconstitutional, the
question of remedy arises. The most natural remedy would be to
invalidate the Medicaid Expansion. However, the Government
proposes—in two cursory sentences at the very end of its
brief—preserving the Expansion. Under its proposal, States would
receive the additional Medi- caid funds if they expand eligibility,
but States would keep their pre-existing Medicaid funds if they do
not expand eligibility. We cannot accept the Government’s
suggestion.

															The reality that States were given no real
choice but to expand Medicaid was not an accident. Congress assumed
States would have no choice, and the ACA depends on States’ having
no choice, because its Mandate requires low-income individuals to
obtain insurance many of them can afford only through the Medicaid
Expansion. Furthermore, a State’s withdrawal might subject everyone
in the State to much higher insurance premiums. That is because the
Medicaid Expansion will no longer offset the cost to the insurance
industry imposed by the ACA’s insurance regulations and taxes, a
point that is explained in more detail in the severability section
below. To make the Medicaid Expansion optional despite the ACA’s
structure and design “ ‘would be to make a new law, not to
enforce an old one. This is no part of our duty.’ ” Trade-Mark Cases , 100 U.S.
82 , 99 (1879).

															Worse, the Government’s proposed remedy
introduces a new dynamic: States must choose between expanding
Medicaid or paying huge tax sums to the federal fisc for the sole
benefit of expanding Medicaid in other States. If this divisive
dynamic between and among States can be introduced at all, it
should be by conscious congressional choice, not by Court-invented
interpretation. We do not doubt that States are capable of making
decisions when put in a tight spot. We do doubt the authority of
this Court to put them there.

															The Government cites a severability clause
codified with Medicaid in Chapter 7 of the United States Code
stating that if “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.” 42
U. S. C. §1303 (2006 ed.). But that clause tells us only that other
provisions in Chapter 7 should not be invalidated if §1396c, the
authorization for the cut-off of all Medicaid funds, is
unconstitutional. It does not tell us that §1396c can be judicially
revised, to say what it does not say. Such a judicial power would
not be called the doctrine of severability but perhaps the doctrine
of amendatory invalidation—similar to the amendatory veto that
permits the Governors of some States to reduce the amounts
appropriated in legislation. The proof that such a power does not
exist is the fact that it would not preserve other congressional
dispositions, but would leave it up to the Court what the
“validated” legislation will contain. The Court today opts for
permitting the cut-off of only incremental Medicaid funding, but it
might just as well have permitted, say, the cut-off of funds that
represent no more than x percent of the State’s bud- get.
The Court severs nothing, but simply revises §1396c to read as the
Court would desire.

															We should not accept the Government’s invitation
to attempt to solve a constitutional problem by rewriting the
Medicaid Expansion so as to allow States that reject it to retain
their pre-existing Medicaid funds. Worse, the Government’s remedy,
now adopted by the Court, takes the ACA and this Nation in a new
direction and charts a course for federalism that the Court, not
the Congress, has chosen; but under the Constitution, that power
and authority do not rest with this Court.

															V Severability The Affordable Care Act seeks to achieve
“near-universal” health insurance coverage. §18091(2)(D) (2006 ed.,
Supp. IV). The two pillars of the Act are the Individ- ual Mandate
and the expansion of coverage under Medicaid. In our view, both
these central provisions of the Act—the Individual Mandate and
Medicaid Expansion—are invalid. It follows, as some of the parties
urge, that all other provisions of the Act must fall as well. The
following section explains the severability principles that require
this conclusion. This analysis also shows how closely interrelated
the Act is, and this is all the more reason why it is judicial
usurpation to impose an entirely new mechanism for withdrawal of
Medicaid funding, see Part IV–F, supra , which is one of many
examples of how rewriting the Act alters its dynamics.

															A

															When an unconstitutional provision is but a
part of a more comprehensive statute, the question arises as to the
validity of the remaining provisions. The Court’s authority to
declare a statute partially unconstitutional has been well
established since Marbury v. Madison , 1 Cranch 137
(1803), when the Court severed an unconstitutional provision from
the Judiciary Act of 1789. And while the Court has sometimes
applied “at least a modest presumption in favor of . . .
severability,” C. Nelson, Statutory Interpretation 144 (2010), it
has not always done so, see, e.g., Minnesota v. Mille
Lacs Band of Chippewa Indians , 526 U.S.
172 , 190–195 (1999).

															An automatic or too cursory severance of
statutory provisions risks “rewrit[ing] a statute and giv[ing] it
an effect altogether different from that sought by the measure
viewed as a whole.” Railroad Retirement Bd. v. Alton
R. Co. , 295 U.S.
330 , 362 (1935). The Judiciary, if it orders uncritical
severance, then assumes the legislative function; for it imposes on
the Nation, by the Court’s decree, its own new statutory regime,
consisting of policies, risks, and duties that Congress did not
enact. That can be a more extreme exercise of the judicial power
than striking the whole statute and allowing Congress to address
the conditions that pertained when the statute was considered at
the outset.

															The Court has applied a two-part guide as the
framework for severability analysis. The test has been deemed “well
established.” Alaska Airlines, Inc. v. Brock , 480 U.S.
678 , 684 (1987). First, if the Court holds a statutory
provision unconstitutional, it then determines whether the now
truncated statute will operate in the manner Con- gress intended.
If not, the remaining provisions must be invalidated. See id., at 685 . In Alaska Airlines , the Court
clarified that this first inquiry requires more than ask- ing
whether “the balance of the legislation is incapable of functioning
independently.” Id., at 684 . Even if the remaining
provisions will operate in some coherent way, that alone does not
save the statute. The question is whether the provisions will work
as Congress intended. The “relevant inquiry in evaluating
severability is whether the statute will function in a manner consistent with the intent of Congress.” Id., at 685 (emphasis in original). See also Free Enterprise Fund v. Public Company Accounting Oversight Bd. , 561 U. S.
___, ___ (2010) (slip op., at 28) (the Act “remains fully operative
as a law with these tenure restrictions excised”) (internal
quotation marks omitted); United States v. Booker , 543 U.S.
220 , 227 (2005) (“[T]wo provisions . . . must be
invalidated in order to allow the statute to operate in a manner
consistent with congressional intent”); Mille Lacs , supra , at 194 (“[E]m- bodying as it did one coherent policy,
[the entire order] is inseverable”).

															Second, even if the remaining provisions can
operate as Congress designed them to operate, the Court must
determine if Congress would have enacted them standing alone and
without the unconstitutional portion. If Congress would not, those
provisions, too, must be invalidated. See Alaska Airlines , supra, at 685 (“[T]he unconstitu- tional provision must be
severed unless the statute cre- ated in its absence is legislation
that Congress would not have enacted”); see also Free Enterprise
Fund , supra, at ___ (slip op., at 29) (“[N]othing in the
statute’s text or historical context makes it ‘evident’ that
Congress, faced with the limitations imposed by the Constitution,
would have preferred no Board at all to a Board whose members are
removable at will”); Ayotte v. Planned Parenthood of
Northern New Eng. , 546 U.S.
320 , 330 (2006) (“Would the legislature have preferred what is
left of its statute to no statute at all”); Denver Area Ed.
Telecommunications Consortium, Inc. v. FCC , 518 U.S.
727 , 767 (1996) (plurality opinion) (“Would Congress still have
passed §10(a) had it known that the remaining provisions were
invalid” (internal quotation marks and brackets omitted)).

															The two inquiries—whether the remaining
provisions will operate as Congress designed them, and whether
Congress would have enacted the remaining provisions standing
alone—often are interrelated. In the ordinary course, if the
remaining provisions cannot operate according to the congressional
design (the first inquiry), it almost necessarily follows that
Congress would not have enacted them (the second inquiry). This
close interaction may explain why the Court has not always been
precise in distinguishing between the two. There are, however,
occasions in which the severability standard’s first inquiry
(statutory functionality) is not a proxy for the second inquiry
(whether the Legislature intended the remaining provisions to stand
alone).

															B

															The Act was passed to enable affordable,
“near-universal” health insurance coverage. 42 U. S. C.
§18091(2)(D). The resulting, complex statute consists of mandates
and other requirements; comprehensive regulation and penalties;
some undoubted taxes; and increases in some governmental
expenditures, decreases in others. Under the severability test set
out above, it must be determined if those provisions function in a
coherent way and as Congress would have intended, even when the
major provisions establishing the Individual Mandate and Medicaid
Expansion are themselves invalid.

															Congress did not intend to establish the goal of
near-universal coverage without regard to fiscal consequences. See, e.g., ACA §1563, 124Stat. 270 (“[T]his Act will reduce the
Federal deficit between 2010 and 2019”). And it did not intend to
impose the inevitable costs on any one industry or group of
individuals. The whole design of the Act is to balance the costs
and benefits affecting each set of regulated parties. Thus,
individuals are required to obtain health insurance. See 26
U. S. C. §5000A(a). Insur- ance companies are required to
sell them insurance regardless of patients’ pre-existing conditions
and to comply with a host of other regulations. And the companies
must pay new taxes. See §4980I (high-cost insurance plans); 42
U. S. C. §§300gg(a)(1), 300gg–4(b) (community rating);
§§300gg–1, 300gg–3, 300gg–4(a) (guaranteed issue); §300gg–11
(elimination of coverage limits); §300gg–14(a) (dependent children
up to age 26); ACA §§9010, 10905, 124Stat. 865, 1017 (excise tax);
Health Care and Education Reconciliation Act of 2010 (HCERA) §1401,
124Stat. 1059 (excise tax). States are expected to expand Medicaid
eligibility and to create regulated marketplaces called ex- changes
where individuals can purchase insurance. See 42 U. S. C.
§§1396a(a)(10)(A)(i)(VIII) (2006 ed., Supp. IV) (Medicaid
Expansion), 18031 (exchanges). Some persons who cannot afford
insurance are provided it through the Medicaid Expansion, and
others are aided in their purchase of insurance through federal
subsidies available on health-insurance exchanges. See 26
U. S. C. §36B (2006 ed., Supp. IV), 42 U. S. C.
§18071 (2006 ed., Supp. IV) (federal subsidies). The Federal
Government’s increased spending is offset by new taxes and cuts in
other federal expenditures, including reductions in Medicare and in
federal payments to hospitals. See, e.g., §1395ww(r)
(Medicare cuts); ACA Title IX, Subtitle A, 124Stat. 847 (“Rev- enue
Offset Provisions”). Employers with at least 50 employees must
either provide employees with adequate health benefits or pay a
financial exaction if an employee who qualifies for federal
subsidies purchases insurance through an exchange. See
26 U. S. C. §4980H (2006 ed., Supp. IV).

															In short, the Act attempts to achieve
near-universal health insurance coverage by spreading its costs to
individuals, insurers, governments, hospitals, and employers—while,
at the same time, offsetting significant portions of those costs
with new benefits to each group. For ex- ample, the Federal
Government bears the burden of paying billions for the new
entitlements mandated by the Medicaid Expansion and federal
subsidies for insurance purchases on the exchanges; but it benefits
from reductions in the reimbursements it pays to hospitals.
Hospitals lose those reimbursements; but they benefit from the
decrease in uncompensated care, for under the insurance regulations
it is easier for individuals with pre-existing conditions to
purchase coverage that increases payments to hospitals. Insurance
companies bear new costs imposed by a collection of insurance
regulations and taxes, including “guaranteed issue” and “community
rating” requirements to give coverage regardless of the insured’s
pre-existing conditions; but the insurers benefit from the new,
healthy purchasers who are forced by the Individual Mandate to buy
the insurers’ product and from the new low- income Medicaid
recipients who will enroll in insurance companies’ Medicaid-funded
managed care programs. In summary, the Individual Mandate and
Medicaid Expansion offset insurance regulations and taxes, which
offset reduced reimbursements to hospitals, which offset increases
in federal spending. So, the Act’s major provisions are
interdependent.

															The Act then refers to these interdependencies
as “shared responsibility.” See ACA Subtitle F, Title I, 124Stat.
242 (“Shared Responsibility”); ACA §1501, ibid. (same); ACA
§1513, id., at 253 (same); ACA §4980H, ibid. (same).
In at least six places, the Act describes the Individual Mandate as
working “together with the other pro- visions of this Act.” 42
U. S. C. §18091(2)(C) (2006 ed., Supp. IV) (working
“together” to “add millions of new consumers to the health
insurance market”); §18091(2)(E) (working “together” to
“significantly reduce” the economic cost of the poorer health and
shorter lifespan of the uninsured); §18091(2)(F) (working
“together” to “lower health insurance premiums”); §18091(2)(G)
(working “together” to “improve financial security for families”);
§18091(2)(I) (working “together” to minimize “adverse selection and
broaden the health insurance risk pool to include healthy
individuals”); §18091(2)(J) (working “together” to “signif- icantly
reduce administrative costs and lower health insurance premiums”).
The Act calls the Individual Mandate “an essential part” of federal
regulation of health insurance and warns that “the absence of the
requirement would undercut Federal regulation of the health
insurance market.” §18091(2)(H).

															C

															One preliminary point should be noted before
applying severability principles to the Act. To be sure, an
argument can be made that those portions of the Act that none of
the parties has standing to challenge cannot be held nonseverable.
The response to this argument is that our cases do not support it.
See, e.g., Williams v. Standard Oil Co. of La. , 278 U.S.
235 , 242–244 (1929) (holding nonseverable statutory provisions
that did not burden the parties). It would be particularly
destructive of sound government to apply such a rule with regard to
a multifaceted piece of legislation like the ACA. It would take
years, perhaps decades, for each of its provisions to be
adjudicated separately—and for some of them (those simply expending
federal funds) no one may have separate standing. The Federal
Government, the States, and private parties ought to know at once
whether the entire legislation fails.

															The opinion now explains in Part V–C–1, infra , why the Act’s major provisions are not severable from
the Mandate and Medicaid Expansion. It proceeds from the insurance
regulations and taxes (C–1–a), to the reductions in reimbursements
to hospitals and other Medicare reductions (C–1–b), the exchanges
and their federal subsidies (C–1–c), and the employer
responsibility assessment (C–1–d). Part V–C–2, infra ,
explains why the Act’s minor provisions also are not severable.

															1 The Act’s Major Provisions Major provisions of the Affordable Care
Act— i.e. , the insurance regulations and taxes, the
reductions in federal reimbursements to hospitals and other
Medicare spend- ing reductions, the exchanges and their federal
subsidies, and the employer responsibility assessment—cannot remain
once the Individual Mandate and Medicaid Expansion are invalid.
That result follows from the undoubted inability of the other major
provisions to operate as Congress intended without the Individual
Mandate and Medicaid Expansion. Absent the invalid portions, the
other major provisions could impose enormous risks of unexpected
bur- dens on patients, the health-care community, and the federal
budget. That consequence would be in absolute conflict with the
ACA’s design of “shared responsibility,” and would pose a threat to
the Nation that Congress did not intend.

															a Insurance Regulations and Taxes Without the Individual Mandate and Medicaid
Expansion, the Affordable Care Act’s insurance regulations and
insurance taxes impose risks on insurance companies and their
customers that this Court cannot measure. Those risks would
undermine Congress’ scheme of “shared responsibility.” See 26
U. S. C. §4980I (2006 ed., Supp. IV) (high-cost insurance
plans); 42 U. S. C. §§300gg(a)(1) (2006 ed., Supp. IV),
300gg–4(b) (community rating); §§300gg–1, 300gg–3, 300gg–4(a)
(guaranteed issue); §300gg–11 (elimination of coverage limits);
§300gg–14(a) (dependent children up to age 26); ACA §§9010, 10905,
124Stat. 865, 1017 (excise tax); HCERA §1401, 124Stat. 1059 (excise
tax).

															The Court has been informed by distinguished
economists that the Act’s Individual Mandate and Medicaid Expansion
would each increase revenues to the insurance industry by about
$350 billion over 10 years; that this combined figure of $700
billion is necessary to offset the approximately $700 billion in
new costs to the insurance industry imposed by the Act’s insurance
regulations and taxes; and that the new $700-billion burden would
otherwise dwarf the industry’s current profit margin. See Brief for
Economists as Amici Curiae in No. 11–393 etc.
(Severability), pp. 9–16, 10a.

															If that analysis is correct, the regulations and
taxes will mean higher costs for insurance companies. Higher costs
may mean higher premiums for consumers, despite the Act’s goal of
“lower[ing] health insurance premiums.” 42 U. S. C.
§18091(2)(F) (2006 ed., Supp. IV). Higher costs also could threaten
the survival of health-insurance companies, despite the Act’s goal
of “effective health insurance markets.” §18091(2)(J).

															The actual cost of the regulations and taxes may
be more or less than predicted. What is known, however, is that
severing other provisions from the Individual Mandate and Medicaid
Expansion necessarily would impose significant risks and real
uncertainties on insurance companies, their customers, all other
major actors in the sys- tem, and the government treasury. And what
also is known is this: Unnecessary risks and avoidable
uncertainties are hostile to economic progress and fiscal stability
and thus to the safety and welfare of the Nation and the Nation’s
freedom. If those risks and uncertainties are to be imposed, it
must not be by the Judiciary.

															b Reductions in Reimbursements to Hospitals and
Other Reductions in Medicare Expenditures The Affordable Care Act reduces payments by
the Federal Government to hospitals by more than $200 billion over
10 years. See 42 U. S. C. §1395ww(b)(3)(B)(xi)–(xii)
(2006 ed., Supp. IV); §1395ww(q); §1395ww(r); §1396r–4(f)(7).

															The concept is straightforward: Near-universal
coverage will reduce uncompensated care, which will increase
hospitals’ revenues, which will offset the government’s re-
ductions in Medicare and Medicaid reimbursements to hospitals.
Responsibility will be shared, as burdens and benefits balance each
other. This is typical of the whole dynamic of the Act.

															Invalidating the key mechanisms for expanding
insurance coverage, such as community rating and the Medicaid
Expansion, without invalidating the reductions in Medicare and
Medicaid, distorts the ACA’s design of “shared responsibility.”
Some hospitals may be forced to raise the cost of care in order to
offset the reductions in reimbursements, which could raise the cost
of insurance premiums, in contravention of the Act’s goal of
“lower[ing] health insurance premiums.” 42 U. S. C.
§18091(2)(F) (2006 ed., Supp. IV). See also §18091(2)(I) (goal of
“lower[ing] health insurance premiums”); §18091(2)(J) (same). Other
hospitals, particularly safety-net hospitals that serve a large
number of uninsured patients, may be forced to shut down. Cf.
National Assn. of Public Hospitals, 2009 Annual Survey: Safety Net
Hospitals and Health Systems Fulfill Mission in Uncertain Times 5–6
(Feb. 2011). Like the effect of preserving the insurance
regulations and taxes, the precise degree of risk to hospitals is
unknowable. It is not the proper role of the Court, by severing
part of a statute and allowing the rest to stand, to impose
unknowable risks that Congress could neither measure nor predict.
And Congress could not have intended that result in any event.

															There is a second, independent reason why the
reductions in reimbursements to hospitals and the ACA’s other
Medicare cuts must be invalidated. The ACA’s $455 billion in
Medicare and Medicaid savings offset the $434-billion cost of the
Medicaid Expansion. See CBO Estimate, Table 2 (Mar. 20, 2010). The
reductions allowed Congress to find that the ACA “will reduce the
Federal deficit between 2010 and 2019” and “will continue to reduce
budget deficits after 2019.” ACA §§1563(a)(1), (2), 124Stat.
270.

															That finding was critical to the ACA. The Act’s
“shared responsibility” concept extends to the federal budget.
Congress chose to offset new federal expenditures with budget cuts
and tax increases. That is why the United States has explained in
the course of this litigation that “[w]hen Congress passed the ACA,
it was careful to ensure that any increased spending, including on
Medicaid, was offset by other revenue-raising and cost-saving
provisions.” Memorandum in Support of Government’s Motion for
Summary Judgment in No. 3–10–cv–91, p. 41.

															If the Medicare and Medicaid reductions would no
longer be needed to offset the costs of the Medicaid Expansion, the
reductions would no longer operate in the manner Congress intended.
They would lose their justification and foundation. In addition, to
preserve them would be “to eliminate a significant quid pro
quo of the legislative com- promise” and create a statute
Congress did not enact. Legal Services Corporation v. Velazquez , 531 U.S.
533 , 561 (2001) (Scalia, J., dissenting). It is no secret that
cutting Medicare is unpopular; and it is most improbable Congress
would have done so without at least the assurance that it would
render the ACA deficit-neutral. See ACA §§1563(a)(1), (2), 124Stat.
270.

															c Health Insurance Exchanges and Their Federal
Subsidies The ACA requires each State to establish a
health-insurance “exchange.” Each exchange is a one-stop
marketplace for individuals and small businesses to compare
community-rated health insurance and purchase the policy of their
choice. The exchanges cannot operate in the manner Congress
intended if the Individual Mandate, Medicaid Expansion, and
insurance regulations cannot remain in force.

															The Act’s design is to allocate billions of
federal dollars to subsidize individuals’ purchases on the
exchanges. In- dividuals with incomes between 100 and 400 percent
of the poverty level receive tax credits to offset the cost of
insurance to the individual purchaser. 26 U. S. C. §36B
(2006 ed., Supp. IV); 42 U. S. C. §18071 (2006 ed., Supp.
IV). By 2019, 20 million of the 24 million people who will obtain
insurance through an exchange are expected to receive an average
federal subsidy of $6,460 per person. See CBO, Analysis of the
Major Health Care Legislation Enacted in March 2010, pp. 18–19
(Mar. 30, 2011). Without the community-rating insurance regulation,
however, the average federal subsidy could be much higher; for
community rating greatly lowers the enormous premiums unhealthy
individuals would otherwise pay. Federal subsidies would make up
much of the difference.

															The result would be an unintended boon to
insurance companies, an unintended harm to the federal fisc, and a
corresponding breakdown of the “shared responsibil- ity” between
the industry and the federal budget that Congress intended. Thus,
the federal subsidies must be invalidated.

															In the absence of federal subsidies to
purchasers, insurance companies will have little incentive to sell
insurance on the exchanges. Under the ACA’s scheme, few, if any,
individuals would want to buy individual insurance policies outside
of an exchange, because federal subsidies would be unavailable
outside of an exchange. Difficulty in attracting individuals
outside of the exchange would in turn motivate insurers to enter
exchanges, despite the exchanges’ onerous regulations. See 42
U. S. C. §18031. That system of incentives collapses if
the federal subsidies are invalidated. Without the federal
subsidies, individ- uals would lose the main incentive to purchase
insurance inside the exchanges, and some insurers may be unwilling
to offer insurance inside of exchanges. With fewer buyers and even
fewer sellers, the exchanges would not operate as Congress intended
and may not operate at all.

															There is a second reason why, if community
rating is invalidated by the Mandate and Medicaid Expansion’s
invalidity, exchanges cannot be implemented in a manner consistent
with the Act’s design. A key purpose of an exchange is to provide a
marketplace of insurance options where prices are standardized
regardless of the buy- er’s pre-existing conditions. See ibid . An individual who shops for insurance through an
exchange will evaluate different insurance products. The products
will offer different benefits and prices. Congress designed the
exchanges so the shopper can compare benefits and prices. But the
comparison cannot be made in the way Congress designed if the
prices depend on the shopper’s pre-existing health conditions. The
prices would vary from person to person. So without community
rating—which prohibits insurers from basing the price of insurance
on pre-existing conditions—the exchanges cannot operate in the
manner Congress intended.

															d Employer-Responsibility Assessment The employer responsibility assessment
provides an incentive for employers with at least 50 employees to
provide their employees with health insurance options that meet
minimum criteria. See 26 U. S. C. §4980H (2006 ed., Supp.
IV). Unlike the Individual Mandate, the employer-responsibility
assessment does not require employers to provide an insurance
option. Instead, it re- quires them to make a payment to the
Federal Government if they do not offer insurance to employees and
if insurance is bought on an exchange by an employee who qualifies
for the exchange’s federal subsidies. See ibid .

															For two reasons, the employer-responsibility
assessment must be invalidated. First, the ACA makes a direct link
between the employer-responsibility assessment and the exchanges.
The financial assessment against employers occurs only under
certain conditions. One of them is the purchase of insurance by an
employee on an exchange. With no exchanges, there are no purchases
on the exchanges; and with no purchases on the exchanges, there is
nothing to trigger the employer-responsibility assessment.

															Second, after the invalidation of burdens on
individuals (the Individual Mandate), insurers (the insurance regu-
lations and taxes), States (the Medicaid Expansion), the Federal
Government (the federal subsidies for exchanges and for the
Medicaid Expansion), and hospitals (the reductions in
reimbursements), the preservation of the employer-responsibility
assessment would upset the ACA’s design of “shared responsibility.”
It would leave employers as the only parties bearing any
significant responsibility. That was not the congressional
intent.

															2 The Act’s Minor Provisions The next question is whether the invalidation
of the ACA’s major provisions requires the Court to invalidate the
ACA’s other provisions. It does.

															The ACA is over 900 pages long. Its regulations
include requirements ranging from a break time and secluded place
at work for nursing mothers, see 29 U. S. C. §207(r)(1)
(2006 ed., Supp. IV), to displays of nutritional content at chain
restaurants, see 21 U. S. C. §343(q)(5)(H). The Act
raises billions of dollars in taxes and fees, including exactions
imposed on high-income taxpayers, see ACA §§9015, 10906; HCERA
§1402, medical devices, see 26 U. S. C. §4191 (2006 ed.,
Supp. IV), and tanning booths, see §5000B. It spends government
money on, among other things, the study of how to spend less
government money. 42 U. S. C. §1315a. And it includes a
number of provisions that provide benefits to the State of a
particular legislator. For example, §10323, 124Stat. 954, extends
Medicare coverage to individuals exposed to asbestos from a mine in
Libby, Montana. Another provision, §2006, id., at 284,
increases Medicaid payments only in Louisiana.

															Such provisions validate the Senate Majority
Leader’s statement, “ ‘I don’t know if there is a senator that
doesn’t have something in this bill that was important to them.
. . . [And] if they don’t have something in it important
to them, then it doesn’t speak well of them. That’s what this
legislation is all about: It’s the art of compromise.’ ” Pear,
In Health Bill for Everyone, Provisions for a Few, N. Y.
Times, Jan. 4, 2010, p. A10 (quoting Sen. Reid). Often, a minor
provision will be the price paid for support of a major provision.
So, if the major provision were unconstitutional, Congress would
not have passed the minor one.

															Without the ACA’s major provisions, many of
these minor provisions will not operate in the manner Congress
intended. For example, the tax increases are “Revenue Offset
Provisions” designed to help offset the cost to the Federal
Government of programs like the Medicaid Expansion and the
exchanges’ federal subsidies. See Title IX, Subtitle A—Revenue
Offset Provisions, 124Stat. 847. With the Medicaid Expansion and
the exchanges invalidated, the tax increases no longer operate to
offset costs, and they no longer serve the purpose in the Act’s
scheme of “shared responsibility” that Congress intended.

															Some provisions, such as requiring chain
restaurants to display nutritional content, appear likely to
operate as Congress intended, but they fail the second test for
severability. There is no reason to believe that Congress would
have enacted them independently. The Court has not previously had
occasion to consider severability in the con- text of an omnibus
enactment like the ACA, which includes not only many provisions
that are ancillary to its central provisions but also many that are
entirely unre- lated—hitched on because it was a quick way to get
them passed despite opposition, or because their proponents could
exact their enactment as the quid pro quo for their needed
support. When we are confronted with such a so-called “Christmas
tree,” a law to which many nongermane ornaments have been attached,
we think the proper rule must be that when the tree no longer
exists the ornaments are superfluous. We have no reliable basis for
knowing which pieces of the Act would have passed on their own. It
is certain that many of them would not have, and it is not a proper
function of this Court to guess which. To sever the statute in that
manner “ ‘would be to make a new law, not to enforce an old
one. This is not part of our duty.’ ” Trade-Mark Cases ,
100 U. S., at 99.

															This Court must not impose risks unintended by
Congress or produce legislation Congress may have lacked the
support to enact. For those reasons, the unconstitutionality of
both the Individual Mandate and the Medicaid Expansion requires the
invalidation of the Affordable Care Act’s other provisions.

															*  *  *

															The Court today decides to save a statute
Congress did not write. It rules that what the statute declares to
be a requirement with a penalty is instead an option subject to a
tax. And it changes the intentionally coercive sanction of a total
cut-off of Medicaid funds to a supposedly noncoercive cut-off of
only the incremental funds that the Act makes available.

															The Court regards its strained statutory
interpretation as judicial modesty. It is not. It amounts instead
to a vast judicial overreaching. It creates a debilitated,
inoperable version of health-care regulation that Congress did not
enact and the public does not expect. It makes enactment of
sensible health-care regulation more difficult, since Congress
cannot start afresh but must take as its point of departure a
jumble of now senseless provisions, provisions that certain
interests favored under the Court’s new design will struggle to
retain. And it leaves the public and the States to expend vast sums
of money on requirements that may or may not survive the necessary
congressional revision.

															The Court’s disposition, invented and atextual
as it is, does not even have the merit of avoiding constitutional
difficulties. It creates them. The holding that the Individual
Mandate is a tax raises a difficult constitutional question (what
is a direct tax?) that the Court resolves with inadequate
deliberation. And the judgment on the Medicaid Expansion issue
ushers in new federalism concerns and places an unaccustomed strain
upon the Union. Those States that decline the Medicaid Expansion
must subsidize, by the federal tax dollars taken from their
citizens, vast grants to the States that accept the Medicaid
Expansion. If that destabilizing political dynamic, so antagonistic
to a harmonious Union, is to be introduced at all, it should be by
Congress, not by the Judiciary.

															The values that should have determined our
course today are caution, minimalism, and the understanding that
the Federal Government is one of limited powers. But the Court’s
ruling undermines those values at every turn. In the name of
restraint, it overreaches. In the name of constitutional avoidance,
it creates new constitutional questions. In the name of cooperative
federalism, it undermines state sovereignty.

															The Constitution, though it dates from the
founding of the Republic, has powerful meaning and vital relevance
to our own times. The constitutional protections that this case
involves are protections of structure. Structural
protections—notably, the restraints imposed by federalism and
separation of powers—are less romantic and have less obvious a
connection to personal freedom than the provisions of the Bill of
Rights or the Civil War Amendments. Hence they tend to be
undervalued or even forgotten by our citizens. It should be the
responsibility of the Court to teach otherwise, to remind our
people that the Framers considered structural protections of
freedom the most im- portant ones, for which reason they alone were
embod- ied in the original Constitution and not left to later
amendment. The fragmentation of power produced by the structure of
our Government is central to liberty, and when we destroy it, we
place liberty at peril. Today’s decision should have vindicated,
should have taught, this truth; instead, our judgment today has
disregarded it.

															For the reasons here stated, we would find the
Act invalid in its entirety. We respectfully dissent. Notes 1 The most authoritative
legal dictionaries of the founding era lack any definition for
“regulate” or “regulation,” suggesting that the term bears its
ordinary meaning (rather than some specialized legal meaning) in
the constitutional text. See R. Burn, A New Law Dictionary 281
(1792); G. Jacob, A New Law Dictionary (10th ed. 1782); 2 T.
Cunningham, A New and Complete Law Dictionary (2d ed.
1771). 2 Justice Ginsburg is
therefore right to note that Congress is “not mandating the
purchase of a discrete, unwanted product.” Ante, at 22
(opinion concurring in part, concurring in judgment in part, and
dis-senting in part). Instead, it is mandating the purchase of an
unwanted suite of products— e.g., physician office visits,
emergency room visits, hospital room and board, physical therapy,
durable medical equipment, mental health care, and substance abuse
detoxification. See Selected Medical Benefits: A Report from the
Dept. of Labor to the Dept. of Health & Human Services (April
15, 2011) (reporting that over two-thirds of private industry
health plans cover these goods and services), online at
http://www.bls.gov/ncs/ebs/sp/selmedbensreport.pdf (all Inter-net
materials as visited June 26, 2012, and available in Clerk of
Court’s case file). 3 In its effort to show the
contrary, Justice Ginsburg’s dissent comesup with nothing more than
two condemnation cases, which it says demonstrate “Congress’
authority under the commerce power to compel an ‘inactive’
landholder to submit to an unwanted sale.” Ante, at 24.
Wrong on both scores. As its name suggests, the condemnation power
does not “compel” anyone to do anything. It acts in rem , against the property that is condemned, and is
effective with or without a transfer of title from the former
owner. More important, the power to condemn for public use is a
separate sovereign power, explicitly acknowledged in the Fifth
Amendment, which provides that “private property [shall not] be
taken for public use, without just compensation.” Thus, the power
to condemn tends to refute rather than supportthe power to compel
purchase of unwanted goods at a prescribed price: The latter is
rather like the power to condemn cash for public use. If it
existed, why would it not (like the condemnation power) be
accompanied by a requirement of fair compensation for the portion
of the exacted price that exceeds the goods’ fair market value
(here, the difference between what the free market would charge for
a health-insurance policy on a young, healthy person with no
pre-existing conditions, and the government-exacted community-rated
premium)? 4 No one seriously contends
that any of Congress’ other enumerated powers gives it the
authority to enact §5000A as a regulation . 5 Of course it can be both
for statutory purposes, since Congress can define “tax” and
“penalty” in its enactments any way it wishes. That is why United States v. Sotelo , 436
U.S. 268 (1978), does not disprove our statement. That case
held that a “penalty” for willful failure to pay one’s taxes was
included among the “taxes” made non-dischargeable under the
Bankruptcy Code. 436 U. S., at 273–275. Whether the “penalty”
was a “tax” within the meaning of the Bankruptcy Code had
absolutely no bearing on whether it escaped the constitutional
limitations on penalties. 6 The amicus appointed to defend the proposition that the Anti-Injunction Act
deprives us of jurisdiction stresses that the penalty for failing
to comply with the mandate “shall be assessed and collectedin the
same manner as an assessable penalty under subchapter B of chapter
68,” 26 U. S. C. §5000A(g)(1) (2006 ed., Supp. IV), and
that such penalties “shall be assessed and collected in the same
manneras taxes,” §6671(a) (2006 ed.). But that point seems to us to
confirmthe inapplicability of the Anti-Injunction Act. That
the penalty is tobe “assessed and collected in the same manner
as taxes” refutes the proposition that it is a tax for
all statutory purposes, including with respect to the
Anti-Injunction Act. Moreover, elsewhere in the Internal Revenue
Code, Congress has provided both that a particular payment
shall be “assessed and collected” in the same manner as a tax and that no suit shall be maintained to restrain the
assessment or collection of the payment. See, e.g., §§7421(b)(1), §6901(a); §6305(a), (b). Thelatter directive would be
superfluous if the former invoked the Anti-Injunction Act. Amicus also suggests that the penalty should be treated as a
tax because it is an assessable penalty, and the Code’s assessment
provision authorizes the Secretary of the Treasury to assess “all
taxes (in-cluding interest, additional amounts, additions to the
tax, and as-sessable penalties) imposed by this title.” §6201(a)
(2006 ed., Supp.IV). But the fact that such items are included as
“taxes” for purposes of assessment does not establish that they are
included as “taxes” for purposes of other sections of the Code,
such as the Anti-Injunction Act, that do not contain similar
“including” language. 7 “State expenditures” is
used here to mean annual expenditures from the States’ own funding
sources, and it excludes federal grants unless otherwise
noted. 8 This number is expressed
in billions of Fiscal Year 2005 dollars. 9 See Office of Management
and Budget, Historical Tables, Budget of the U. S. Government,
Fiscal Year 2013, Table 12.1—Summary Comparison of Total Outlays
for Grants to State and Local Governments: 1940–2017 (hereinafter
Table 12.1), http://www.whitehouse.gov/omb/budget/Historicals; id ., Table 15.2—Total Government Expenditures: 1948–2011
(hereinafter Table 15.2). 10 This
number is expressed in billions of Fiscal Year 2005
dollars. 11 See
Table 12.1; Dept. of Commerce, Bureau of Census, Statistical
Abstract of the United States: 2001, p. 262 (Table 419, Federal
Grants-in-Aid Summary: 1970 to 2001). 12 See
Statistical Abstract of the United States: 2012, p. 268 (Table 431,
Federal Grants-in-Aid to State and Local Governments: 1990 to
2011). 13 Justice Ginsburg argues that “[a]
State . . . has no claim on the money its residents pay
in federal taxes.” Ante, at 59, n. 26. This is true as a
formal matter. “When the United States Government taxes United
States citizens, it taxes them ‘in their individual capacities’ as
‘the people of America’—not as residents of a particular State.” Ante, at 58, n. 26 (quoting U. S. Term Limits, Inc. v. Thornton , 514 U.S.
779 , 839 (1995) (Kennedy, J., concurring)). But unless Justice
Ginsburg thinks that there is no limit to the amount of money that
can be squeezed out of taxpayers, heavy federal taxation diminishes
the practical ability of States to collect their own
taxes. 14 The
Federal Government has a higher number for federal spending on
Medicaid. According to the Office of Management and Budget, federal
grants to the States for Medicaid amounted to nearly $273 billion
in Fiscal Year 2010. See Office of Management and Bud-get,
Historical Tables, Budget of the U. S. Government, Fiscal Year
2013, Table 12.3—Total Outlays for Grants to State and Local
Gov-ernments by Function, Agency, and Program: 1940–2013,
http://www.whitehouse.gov/omb/budget/Historicals. In that Fiscal
Year, total federal outlays for grants to state and local
governments amounted to over $608 billion, see Table 12.1, and
state and local government expenditures from their own sources
amounted to $1.6 trillion, see Table 15.2. Using these numbers,
44.8% of all federal outlays to both state and local governments
was allocated to Medicaid, amounting to 16.8% of all state and
local expenditures from their own sources. 15 The
Federal Government reports a higher percentage. Accordingto
Medicaid.gov, in Fiscal Year 2010, the Federal Government made
Medicaid payments in the amount of nearly $260 billion,
repre-senting 67.79% of total Medicaid payments of $383 billion.
See
www.medicaid.gov/Medicaid-CHIP-Program-Information/By-State/By-State.html. 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]

															Justice Thomas, dissenting.

															I dissent for the reasons stated in our joint
opinion, but I write separately to say a word about the Commerce
Clause. The joint dissent and The Chief Justice cor- rectly apply
our precedents to conclude that the Individual Mandate is beyond
the power granted to Congress un- der the Commerce Clause and the
Necessary and Proper Clause. Under those precedents, Congress may
regulate “economic activity [that] substantially affects interstate
commerce.” United States v. Lopez, 514 U.S.
549 , 560 (1995). I adhere to my view that “the very notion of a
‘substantial effects’ test under the Commerce Clause is
inconsistent with the original understanding of Congress’ powers
and with this Court’s early Commerce Clause cases.” United
States v. Morrison, 529 U.S.
598 , 627 (2000) (Thomas, J., concurring); see also Lopez,
supra, at 584–602 (Thomas, J., concurring); Gonzales v. Raich, 545 U.S.
1 , 67–69 (2005) (Thomas, J., dissenting). As I have explained,
the Court’s continued use of that test “has encouraged the Federal
Government to persist in its view that the Commerce Clause has
virtually no limits.” Morrison, supra, at 627. The
Government’s unprecedented claim in this suit that it may regulate
not only economic activity but also inactivity that
substantially affects interstate commerce is a case in point.

Summary: The Supreme Court ruled on the constitutionality of two provisions of the Patient Protection and Affordable Care Act: the individual mandate, requiring citizens to purchase health insurance, and the Medicaid expansion, which gives funds to states to provide healthcare to low-income citizens. The Court upheld the individual mandate as a valid exercise of Congress's taxing power, but struck down the Medicaid expansion as coercive to states.