Posted June 28th, 2012 in Top Stories

U.S. Supreme Court Upholds Obamacare

By Careen Martin

In a 5-4 vote, the United States Supreme Court today held that The Affordable Care Act, including its individual mandate that virtually all Americans must buy health insurance, is constitutional. Five Justices agreed that the penalty that someone must pay if they refuse to buy health insurance is the kind of tax that Congress can impose using its taxing power. As the Court noted, those subject to the individual mandate may lawfully forgo health insurance and pay higher taxes, or buy health insurance and pay lower taxes. Thus, the individual mandate is not a command for Americans to buy health insurance, but a tax if they do not.

The Court’s decision to uphold the individual mandate on the basis of Congress’ taxing power came as a surprise to some observers, as many believed the Court would base its ruling on the Government’s primary argument, which was that Congress could use its power to regulate commerce between the states to require everyone to buy health insurance. However, the Court found that the individual mandate would be unconstitutional under the commerce clause, as well as the “necessary and proper” component of the insurance reforms.

But at the end of the day all that matters is that the Court upheld the individual mandate, whatever the legal basis. Because the mandate survives, the Court did not need to decide what other parts of the statute were constitutional, except for a provision that required states to comply with new eligibility requirements for Medicaid or risk losing their funding. On that question, the Court held that the provision is constitutional as long as states would only lose new funds if they didn’t comply with the new requirements, rather than all of their funding. The tax for not complying with the Affordable Care Act’s individual mandate first becomes enforceable in 2014.