In one of the most widely anticipated decisions in recent history, the U.S. Supreme Court today ruled that the sweeping federal law overhauling the nation's health care system is constitutional.
Chief Justice John Roberts said the requirement that individuals have health coverage or pay a penalty — known as the individual mandate — is within Congress' power to impose taxes. On the issue of Medicaid expansion, a majority of the court said Congress can expand Medicaid, but it can't strip states of all their Medicaid funds if they fail to participate in that expansion.
The conservative Roberts surprised court watchers by joining the four liberal justices to form a 5-4 majority. The decision came after three days of historic arguments in late March that hinged on whether the government can require people to purchase health insurance, if they're not otherwise covered. (You can read the opinions here.)
Republican leaders were quick to claim that the decision was bad news for individual choice and the economy. "Obamacare puts the federal government between you and your doctor," GOP presidential hopeful Mitt Romney said in a press conference after the ruling. In what's sure to become a campaign theme, Romney added, "If we want good jobs and a bright economic future for ourselves and for our kids, we must replace Obamacare."
House Speaker John Boehner echoed that argument. "The president's health care law is hurting our economy by driving up health costs and making it harder for small businesses to hire," he said in a statement. "Today's ruling underscores the urgency of repealing this harmful law in its entirety."
But President Obama, who surely was one of the day's big winners, called the decision "a victory for people all over this country whose lives will be more secure because of this law." And he urged lawmakers to move on: "What the country can't afford to do is refight the political battles of two years ago. ... Now is the time to keep our focus on the most urgent challenges of our time" – the economy and job creation.
The individual mandate drew the ire of Republicans and tested the legal flexibility of the Commerce Clause of the Constitution, which supporters of the law had argued was on their side.
But that didn't turn out to be the crucial test after all. Instead, it came down to a finding that the penalty for not buying insurance is a tax, something Congress can levy under the Constitution.
The lawyers at SCOTUSblog summarized the ruling this way:
The Affordable Care Act, including its individual mandate that virtually all Americans buy health insurance, is constitutional. There were not five votes to uphold it on the ground that Congress could use its power to regulate commerce between the states to require everyone to buy health insurance. However, five Justices agreed that the penalty that someone must pay if he refuses to buy insurance is a kind of tax that Congress can impose using its taxing power. That is all that matters. 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 mandate, set to take effect in 2014, was seen by advocates of the law as a crucial tool in making possible a broad expansion of health coverage. It would help spread the costs across more people and would directly ensure that millions of uninsured people get insurance.
But the mandate got compared unfavorably to the government ordering people to buy broccoli. Good for their health, probably. But mandatory? Justice Antonin Scalia pressed Solicitor General Donald Verrilli on the administration's argument that everyone is in the health care market, like it or not.
"Scalia: Could you define the market — everybody has to buy food sooner or later, so you define the market as food, therefore, everybody is in the market; therefore, you can make people buy broccoli.
Verrilli: That's quite different. The food market, while it shares that trait that everybody's in it, it is not a market in which your participation is often unpredictable and often involuntary."
Opponents saw the requirement as an unbridled intrusion on personal liberty. A brief filed by Paul Clement, the lawyer who argued the challenge to the law brought by 26 states, said the mandate was an overreach. He crystallized the argument this way in a legal brief:
"The individual mandate rests on a claim of federal power that is both unprecedented and unbounded: the power to compel individuals to engage in commerce in order more effectively to regulate commerce. This asserted power does not exist."
The Obama administration and supporters of the law had argued, essentially, that everyone is already taking part in the market for health services. It's pretty much inevitable that you'll use health care services at various points in your life. It's only a question of when and how big a bill you'll ring up.
Ultimately, a Supreme Court majority agreed with opponents who argued that the Commerce Clause wasn't broad enough to include the insurance mandate. But that didn't turn out to be necessary for the law to survive.