US Supreme Court Upholds The Majority Of The Affordable Care Act

This morning, the United States Supreme Court (the "Court") issued its long-awaited decision regarding the constitutionality of President Obama's health care reform law, the Affordable Care Act.

In today's ruling regarding Obama's signature domestic policy achievement, authored by Chief Justice John Roberts in a 5-4 decision, the Court declared that the majority of the law was constitutional, a major victory for President Obama and congressional Democrats and a ruling that ensures continued implementation of the law.

Interestingly, the Court did not rule that the individual mandate was constitutional under the Commerce Clause of the Constitution, but under the taxing authority vested by the Constitution to Congress. A different 7-2 majority of the Court did find that the Medicaid expansion as written would have been unconstitutionally coercive, but the Court remedied that problem by removing the ability of the federal government to take away existing Medicaid funding if states do not expand their programs in accordance with the Affordable Care Act's requirements. The decision thus could impact the ability of nearly 16 million individuals expected to receive health insurance coverage under the Medicaid program if individual States choose not to expand their Medicaid programs. These individuals might be able to obtain coverage through the health insurance exchanges.

The Court's decision will have far-reaching impacts on the US health care system, employers, businesses, and consumers, and the upcoming November 6 elections.

The Court ruled on the following issues:

Anti-Injunction Act. The statutory construction of the penalty imposed on those who do not have insurance did not render it a "tax" for purposes of the Anti-Injunction Act Individual Mandate. The Court upheld the penalty for failure to obtain health insurance as a constitutional use of Congress's taxing powers, effectively upholding the individual mandate. Severability. The Court did not need to rule on the issue of severability due to upholding the individual mandate. Medicaid Expansion. The Court found the Medicaid expansion to be constitutionally coercive of states but invalidated the federal government's ability to withhold existing Medicaid funds for states that choose not to comply with the Affordable Care Act's Medicaid expansion. Background on Lawsuit

On March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act (Pub. L. No. 111-148). One week later, the Health Care and Education Reconciliation Act of 2010 (Pub. L. No. 111-152) was enacted. Together, these two laws comprise the Affordable Care Act. Twenty six states brought suit against the Department of Health and Human Services ("HHS") challenging the constitutionality of the law, among dozens of other lawsuits that were filed across the country. Over three days this March, the Court heard an unprecedented six and a half hours of oral argument to determine the constitutionality of the law. The following reviews the key issues debated before the Court and their final disposition.

Anti-Injunction Act

The Anti-Injunction Act prevents a taxpayer from challenging a tax in court before the taxpayer has been assessed the tax. The individual mandate becomes effective in 2014 and penalty payments will not be collected by the Internal Revenue Service until 2015. Both the Obama Administration and the states agreed that the Anti-Injunction Act does not...