[Editress' Note: Read the Supreme Court's full decision here.]
The Supreme Court on Thursday upheld the individual health-insurance mandate that is at the heart of President Obama’s landmark health-care law, saying the mandate is permissible under Congress’s taxing authority.
The potentially game-changing decision — a major victory for the White House less than five months before the November elections –will help redefine the power of the national government and affect the health-care choices of millions of Americans.
Chief Justice John G. Roberts Jr. sided with the majority in voting to uphold the law, Obama’s signature domestic initiative. The court also upheld the federal government’s ability to expand Medicaid coverage, but said it could not withdraw existing Medicaid funding from states that opt out of the expansion.
Passage of the Patient Protection and Affordable Care Act by the Democratic-controlled Congress in 2010 capped decades of efforts to implement a national program of health care. The legislation is supposed to eventually extend health-care coverage to more than 30 million Americans who currently lack it.
Republicans in Congress and GOP presidential challenger Mitt Romney have vowed to try and repeal the measure after the November elections.
The health-care issue thrust the Supreme Court into the public spotlight unlike anything since its role in the 2000 presidential election. The court’s examination of the law received massive coverage — especially during three days of oral arguments in March — and its outcome remained Washington’s most closely guarded secret.
The court reviewed four questions: whether it was within Congress’s constitutional powers to impose an “individual mandate” to purchase health insurance; whether all or any additional parts of the law must be struck down if the mandate is rejected; whether an expansion of Medicaid was unduly coercive on the states and whether all of those questions can even be reviewed before the mandate takes effect.
On the Medicaid question, the judges found that the law’s expansion of Medicaid can move forward, but not its provision that threatens states with the loss of their existing Medicaid funding if the states declined to comply with the expansion.
The finding was unexpected—every lower court that has ruled on the issue has upheld the constitutionality of the Medicaid expansion. And it raises immediate questions as to how effectively the federal government will be able to implement a provision that is central to the law’s goal of substantially reducing the share of uninsured Americans.
Still, the most crucial issue before the court was considered to be the individual mandate, known technically as the “minimum coverage” provision, because striking it down would jeopardize the ability of insurers to comply with other, more popular elements of the health-care law without drastically raising premiums. Under those other provisions, for example, insurers can no longer limit or deny benefits to children because of a preexisting condition, and young adults to up age 26 are eligible for insurance coverage under their parents’ plans.
During oral arguments in March, conservative justices indicated they were skeptical about the individual mandate, the provision in the 2,700-page health-care law that requires nearly all Americans to obtain health insurance by 2014 or pay a financial penalty.
Arguing the case for the Obama administration, Solicitor General Donald B. Verrilli Jr. defended the law as a constitutional exercise of congressional power under the charter’s commerce clause to regulate interstate commerce. He said lawmakers were regulating health insurance to deal with the problem of millions of people who lack coverage and therefore shift costs to the insured when they cannot pay for their medical care.
Paul D. Clement, representing Florida and 25 other states objecting to the health-care law, argued that Congress exceeded its power in passing the law, which he said compels people to buy a product.
The court rejected Obama administration’s commerce-clause argument, but ruled 5-4 that Congress nevertheless “has the power to impose” the individual mandate under its taxing authority. The provision “need not be read to do more than impose a tax,” the opinion said. “This is sufficient to sustain it.”
Neither the plaintiffs in the case nor the Obama administration had argued before the court that the individual mandate was a tax. Instead, the court asked a Washington lawyer to present the argument that lawsuits against the health-care law were premature under an obscure 19th-century law, the Anti-Injunction Act, which bars suits against a tax until the tax is actually paid.
Under the health-care law, penalties for refusing to buy health insurance do not kick in until people pay their 2015 income tax returns.
In its ruling, the court did not accept that the Anti-Injunction Act precludes a decision on the health-care law, but it appeared to embrace the argument that the penalty amounts to a tax.