Final answer:
The Supreme Court upheld the Affordable Care Act based on Congress's power to tax. The individual mandate requiring health insurance purchase or payment of a fine was ruled constitutional as a form of taxation, which is within federal government powers. This decision relied on taxation powers rather than the commerce clause.
Step-by-step explanation:
The constitutional reasoning that the Supreme Court used to uphold the Affordable Care Act (ACA), primarily centered around Congress's power to tax. In the landmark case of National Federation of Independent Business v. Sebelius in 2012, the court ruled that the individual mandate, which required citizens to purchase health insurance or pay a fine, fell within Congress's taxation powers. As the ACA is funded through additional taxes, including an increase in Medicare tax and taxes on high income taxpayers, health insurance providers, and certain medical device manufacturers, the Supreme Court found the individual mandate to be a constitutional exercise of the federal government's right to tax.
The ruling was significant because it upheld key components of the ACA, alluding to the fact that while some contested that the mandate violated an individual's freedom to choose to have insurance, the financial charge for not complying could be considered a tax. Consequently, because Congress has the power to impose taxes, the mandate was deemed constitutional. The Court did not base its decision on the commerce clause, which in the past had been a usual justification for Congress's regulatory powers, but instead on the enumerated power to tax, which affirmed the legitimacy of the ACA.