Previous posts dealt with the health care case before the US Supreme Court. Amy Howe writes at SCOTUSblog:
The most important part of the Court’s opinion on the mandate came from the Chief Justice, John Roberts. He acknowledged that Congress has a broad power under the Commerce Clause, but he emphasized that Congress’s power to regulate commerce assumes that there is commerce to regulate. In his view, the mandate creates commerce, rather than regulating it. If the Court were to interpret the Commerce Clause the way that the government does, he contended, it would allow Congress to regulate all kinds of new things – including forcing people to buy vegetables (with no specific reference to broccoli, however). “That is not the country” the Founding Fathers envisioned, he proclaimed.
Although the Chief Justice rejected the government’s Commerce Clause argument, he agreed with one of the government’s alternative arguments: the mandate imposes a tax on people who do not buy health insurance, and that tax is something that Congress can impose using its constitutional taxing power. He acknowledged that the mandate (and its accompanying penalty) is primarily intended to get people to buy insurance, rather than to raise money, but it is, he explained, still a tax. If someone who does not want to buy health insurance is willing to pay the tax, that’s the end of the matter; the government cannot do anything else.
Justice Ginsburg (joined by Justices Breyer, Sotomayor, and Kagan) agreed with the Chief Justice’s bottom line – that the mandate is constitutional under Congress’s ability to tax – even while disagreeing with his Commerce Clause conclusion; those four Justices would have also held that Congress could use its power to regulate commerce to pass the mandate.
The Court acknowledged that Congress can put strings on the money that it gives to the states. However, it explained that this was not the kind of “relatively mild encouragement” that the Court had approved in earlier cases involving this “coercion” theory – for example, in a 1987 case in which it had held that Congress could threaten to withhold five percent of federal highway funds from states that did not raise their drinking age to twenty-one. Instead, the Medicaid provision goes too far and is more like a “gun to the head.” Having said that, however, the Court made clear that Congress could still attach some strings to the Medicaid funds. Specifically, even if it can’t take away all of the funding for states that don’t comply with the new eligibility requirements, it can still withhold the new Medicaid funds if states don’t comply. So although the Obama Administration lost on this issue, it’s probably a loss that it is willing to live with for now, as few states (if any) are ultimately expected to turn down the new Medicaid money, even with the strings.