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27-06-2012 | Article

Supreme Court upholds Patient Protection and Affordable Care Act


Supreme Court opinion

MedWire News: The Supreme Court has ruled that the controversial "individual mandate" provision of the Patient Protection and Affordable Care Act (PPACA) passes constitutional muster as a tax, and that the law itself is constitutional.

The ruling allows the law to be implemented largely intact, and is expected to substantially reduce the number of US citizens without health insurance, currently estimated to be between 45 and 50 million.

"Our precedent demonstrates that Congress had the power to impose the exaction in Section 5000A [of the Federal code] under the taxing power, and that Section 5000A need not be read to do more than impose a tax. This is sufficient to sustain it," the justices wrote in the majority opinion.

Chief Justice John Roberts joined Associate Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor, and Elena Kagan in the majority.

Although the Obama administration had argued that the individual mandate provision was enforceable under the interstate commerce clause of the constitution, the five justices in the majority - three of whom were appointed by President Obama - agreed that the law treats failure to buy health insurance as a tax, and that Congress has the power under the constitution to impose taxes.

"Under the mandate, if an individual does not maintain health insurance, the only consequence is that he must make an additional payment to the IRS when he pays his taxes," writes Roberts, in an opinion separate from that of other justices in the majority.

"That, according to the Government, means the mandate can be regarded as establishing a condition - not owning health insurance - that triggers a tax - the required payment to the IRS. Under that theory, the mandate is not a legal command to buy insurance. Rather, it makes going without insurance just another thing the Government taxes, like buying gasoline or earning income. And if the mandate is in effect just a tax hike on certain taxpayers who do not have health insurance, it may be within Congress's constitutional power to tax."

The court has also held that the law's provisions governing the expansion of Medicaid, a federally funded program administered by individual states, is valid, but added that neither Congress nor the President has the power to punish states that do not comply with the law by withholding all Medicaid funding.

The Court did rule, however, that the federal government may withhold new Medicaid funds from states that are not in compliance with the law, when it is fully enacted in 2014.

All other provisions of the PPACA are understood to remain intact, including currently enforceable provisions allowing young adults to remain on their parents' health insurance and preventing insurance companies from refusing to insure children with "pre-existing conditions." The pre-existing condition protection will be expanded to adults in 2014.

By Neil Osterweil