Updated: 6/28/2012 12:08 PM CDT
The Supreme Court has upheld the constitutionality of the health care law, saying that the individual mandate is valid as a tax.
In a 5-4 vote, the court said Congress was acting within its powers under the Constitution when it required most Americans to carry health insurance or pay a penalty—the provision at the center of the two-year legal battle. It upheld the mandate as a tax, in an opinion by Chief Justice John Roberts.
Even before the ruling, the administration moved ahead with implementing its provisions. It has been negotiating with states to set up exchanges where consumers can buy subsidized insurance policies and sign up millions of lower-income Americans for Medicaid. Some states, including Florida and Texas, refused to cooperate because they expected the law to be overturned.
Chief Justice John Roberts announced the court’s judgment that allows the law to go forward with its aim of covering more than 30 million uninsured Americans.
According to the Wall Street Journal, insurance exchanges are set to open in 2014, the same year insurers will have to accept all customers regardless of their medical histories. The insurance mandate will also take effect in 2014.
People must show when they file tax returns for 2014 that they had coverage during that year or pay a tax penalty. The size of the penalty will rise over time and eventually reach a maximum of several thousand dollars a year.
Also starting in 2014, companies with more than 50 workers will have to pay penalties starting at $2,000 per employee if they didn’t offer a set level of health benefits.
In another portion of the ruling, the Supreme Court determined that a piece of the Obama administration’s health care law that expanded Medicaid was unconstitutional but didn’t throw out the expansion. Instead, the court said that the federal government can’t threaten resistant states by threatening to pull all of their existing Medicaid funding.
Stephen Breyer, Ruth Bader Ginsburg, Elena Kagan and Sonia Sotomayor, joined Roberts in the outcome.
Justices Samuel Alito, Anthony Kennedy, Antonin Scalia and Clarence Thomas dissented.
Speaking on the court’s ruling, Senate Majority Leader Harry Reid (D-NV) said, “Democrats are very proud that we stood up for the right of every man, woman and child to life-saving medical care instead of insurance companies.”
House Speaker John Boehner (R-OH) said, “The president’s health care law is hurting our economy by driving up health costs and making it harder for small businesses to hire. Today’s ruling underscores the urgency of repealing this harmful law in its entirety. What Americans want is a common-sense, step-by-step approach to health care reform that will protect Americans’ access to the care they need, from the doctor they choose, at a lower cost. Republicans stand ready to work with a president who will listen to the people and will not repeat the mistakes that gave our country ObamaCare.”
President Obama has called his health care law “the right thing to do,” even as polling indicated the law was unpopular. Mitt Romney has vowed to repeal the law during his campaign for president.
Speaking on the Supreme Court ruling, Obama said it was “good for the American people” and added, “It is a fundamental principle here in America, the wealthiest nation on earth, no illness or accident should lead to any family’s financial ruin. I didn’t do this because it was good politics. I did this because I believed it was good for the country. I did it because it was good for the American people.”
Republican presidential candidate Mitt Romney reacted to the decision, saying, “Let’s make clear that we understand what the court did and did not do. What the court did do today is say that Obamacare does not violate the Constitution. What they did not do is to say that Obamacare is good law or that it is good policy. Obamacare was bad policy yesterday. It’s bad policy today. Obamacare was a bad law yesterday. It is bad law today.”