The Supreme Court case National Federation of Independent Business v. Sebelius examined the constitutionality of the individual mandate and Medicaid expansion in the Affordable Care Act. The Court held that Congress lacked constitutional power to enact the individual mandate and held it to be unconstitutional. The individual mandate could set a precedent for government interference in personal choices based on inaction, which goes beyond the scope of the Commerce Clause authority established in Wickard v. Filburn and could lead to unconstitutional mandates. The Necessary and Proper Clause does not allow Congress to exercise any great substantive and independent power beyond those specifically enumerated. The individual mandate cannot be sustained under the Necessary and Proper Clause as an essential component of the insurance reforms because it expands federal authority beyond its natural limit. However, the individual mandate is constitutional as a tax, not under the commerce power. The Medicaid expansion falls under the Spending Clause, but Congress's power to secure state compliance is limited. The ACA's minimum coverage provision is constitutional under the Commerce Clause as Congress has the power to regulate economic activities that substantially affect interstate commerce.

The Affordable Care Act (ACA) is constitutional, including the individual mandate and Medicaid expansion. The Court upheld the constitutionality of the ACA's Medicaid expansion and minimum coverage provision, but prohibited the Secretary's authority to withhold Medicaid funds from non-compliant states. The dissenting opinion argues that the ACA goes beyond Congress' powers and is unconstitutional. The federal government's power is limited and subject to judicial review. The lower court's decision not to strike down the Medicaid expansion provision of the ACA was erroneous. The Court's decision to save the ACA by interpreting the Individual Mandate as an option subject to a tax and changing the Medicaid Expansion sanction is a vast judicial overreaching that creates a version of health care regulation that Congress did not enact and makes sensible health care regulation more difficult.

The Supreme Court's ruling on the Individual Mandate and Medicaid Expansion has constitutional and federalism implications, reducing state sovereignty and limiting federal government powers. Justice Thomas disagrees with the Court's decision, stating that the Commerce Clause does not allow Congress to regulate inactivity that affects interstate commerce.