Supreme Court Votes 5-4 to Uphold Healthcare Reform

The Supreme Court has handed down its highly anticipated decision upholding the 2010 Patient Protection and Affordable Care Act. Touted as one of the most significant Supreme Court decisions of this century, the Court’s 5 to 4 ruling to uphold the Law could have repercussions throughout the U.S. for corporations, individuals, healthcare and the political system.

The biggest issue was the constitutionality of the individual mandate and some anticipated that the provision could be thrown out. However, the Court decided to uphold the entire Act, including the individual mandate provision of the health care reform law. This mandate requires most Americans to maintain “minimal essential” health care coverage. For individuals who are not exempt, and who do not receive health insurance through an employer or government program, the means of satisfying the requirement is to purchase insurance from a private company. Beginning in 2014, those who do not comply with the mandate must make a “shared responsibility payment” to the Fed­eral Government. The Act provides that this “penalty” will be paid to the Internal Revenue Service with an individual’s tax­es, and “shall be assessed and collected in the same manner” as tax penalties.

Also at issue was the expansion of Medicaid. The Act increases federal aid to the states for Medicaid, but puts their current funding at risk if states fail to comply with the new requirements.

With Chief Justice John Roberts siding with the majority, the individual mandate survives as a tax. Without it, the rest of the law was considered unworkable, due to the reliance on the individual mandate to finance it. “Our precedent demonstrates that Congress had the power to impose the exaction in Section 5000A under the taxing power, and that Section 5000A need not be read to do more than impose a tax,” said the court. “This is sufficient to sustain it.”

Sources: Accounting Today, Health Capital Topics and MSNBC.