NFIB v. Sebelius

The Court upheld the Affordable Care Act's individual mandate as a tax but limited the Medicaid expansion.

Overview

Twenty-six states challenged the Affordable Care Act. Chief Justice Roberts, writing in part for a majority, held that the mandate exceeded the commerce power because it created rather than regulated commerce, but survived as a lawful exercise of the taxing power. The Court also held that conditioning all Medicaid funds on expansion was unconstitutionally coercive, making expansion effectively optional for states. NFIB preserved the national health reform while enforcing federalism limits and applied an anti-coercion principle to spending for the first time, demonstrating the stakes of judicial review over major legislation.