Supreme Court in 5-4 Decision Upholds Healthcare Reform

Arjun Dave
28 Jun, 2012
New York City

U.S. Supreme Court upheld in a landmark decision by a 5-4 vote most of the key provisions of the healthcare reform that divided the nation for the last two years. The decision will not allow the law to be implemented as early as 2014.

[R]1:25 PM New York – U.S. Supreme Court upheld in a landmark decision by a 5-4 vote most of the key provisions of the healthcare reform that divided the nation for the last two years. The decision will now allow the law to be implemented as early as 2014 though several Republican governors vowed to resist.[/R]

The Supreme Court voted in a favor of President Obama’s healthcare reform that includes individual mandate. The decision pushes forward universal care long sought by lawmakers and presidents as far back as seven centuries and will provide millions with insurance coverage that many lack.

The high court ruled on several key issues from the legality of the mandate to if the Congress overstepped its authority to the disbursements of funding to states by the Federal government.

Chief Justice John G. Roberts Jr. wrote the majority opinion and surprised most court observers by siding with the four liberal judges announced the court’s decision that permits the law to go forward with its target of covering more than 30 million uninsured Americans.

The decision is likely to cast a long shadow on the upcoming Presidential election that will allow sweeping policy changes that are likely to touch every American regardless of his age or economic status.

The court’s decision is expected to accelerate the march towards universal coverage long sought by several presidents and lawmakers dating back six centuries and take a root in one of the most advanced nations in the world where a large number of people are uninsured.

The court ruled 5-4 to uphold the individual mandate and most of the provisions in the law and Chief Justice Roberts surprised many by offering the fifth swing vote need to uphold the law.

Four liberal justices, Stephen Breyer, Elena Kagan, Ruth Bader Ginsburg and Sonia Sotomayor agreed with Chief Justice John Roberts.

Justices Clarence Thomas, Anthony Kennedy, Antonin Scalia and Samuel Alito write dissenting opinion.

Twenty-six States, several individuals, and the National Federation of Independent Business brought suit in Federal District Court, challenging the constitutionality of the individual mandate and the Medicaid expansion.

The Court of Appeals for the Eleventh Circuit upheld the Medicaid expansion as a valid exercise of Congress’s spending authority, but concluded that Congress lacked power to enact the individual mandate.

The Supreme Court in a majority ruling affirmed the power of the office of the President and the Congress but also said that the requirement for all to have a insurance is a tax and is constitutional.

Court had to decide whether the “penalty” the law imposes on people who are uninsured amounts to a “tax” and whether the court can issue a verdict now until the implementation of the law or has to wait for a ruling when the taxes are due.

Chief Justice John Roberts wrote that the commerce clause did not apply to the mandate but the mandate stands under the taxing clause.

The high court also clarified its position on Medicare expansion and its funding by the federal government. The court instructed the federal government that the Medicaid expansion could proceed as long as the federal government does not withhold entire funding if states do not take part in the law’s expansion.

The law, Affordable Act as passed by the Congress requires states to offer Medicaid coverage to adults with income up to 133% of federal poverty level whereas many States now cover adults with children only if their income is considerably lower and do not cover adults at all.

Chief Justice Robert wrote the following in the opinion delivered today about the Congress’ authority to regulate commerce.

“The individual mandate, however, does not regulate existing commercial activity. It instead compels individuals to become active in commerce by purchasing a product, on the ground that their failure to do so affects interstate commerce.

Construing the Commerce Clause to permit Congress to regulate individuals precisely because they are doing nothing would open a new and potentially vast domain to congressional authority. Congress already possesses expansive power to regulate what people do.

Upholding the Affordable Care Act under the Commerce Clause would give Congress the same license to regulate what people do not do.”

“The individual mandate thus cannot be sustained under Congress’s power to “regulate Commerce.”

Chief Justice Roberts delivered the opinion of the Court with respect to Congress’ ability to “lay and collect tax” concluding that the individual mandate may be upheld as within Congress’s power under the Taxing Clause.

The court agreed to a major expansion of Medicaid that will bring at least 26 million more into insurance coverage as early as 2014, but limited the power of the federal government to enforce this provision by restricting or penalizing states that refuse the expansion.

Chief Justice Roberts in the majority opinion explained that the federal government and states work in a cooperative stance and federal government cannot compel states to comply by cutting off the entire funding if they resist the expansion. The payment for medical budgets is more than 10% of state budgets.

Roberts added in his opinion that the Congress can attach conditions for the release of Medicaid payments but it is not “free to penalize states choose not to participate” in the expansion by withholding the entire Medicaid funding.

In the opinion Roberts wrote the following.

“The threatened loss of over 10 percent of a State’s overall budget is economic dragooning that leaves the States with no real option but to acquiesce in the Medicaid expansion.”

“The Government claims that the expansion is properly viewed as only a modification of the existing program, and that this modification is permissible because Congress reserved the “right to alter, amend, or repeal any provision” of Medicaid.

But the expansion accomplishes a shift in kind, not merely degree.”

Republicans vowed to repeal the act and Presidential candidate Mitt Romney said he will work to revoke the act if he is elected. The posturing by the Republican candidate only adds to non-stop campaign by the Republican Party members who prefer the private care and support the expensive care that is only available to those who are employed.

Healthcare insurers were sharply lower after the Supreme Court ruled in favor of Obama healthcare reform and upheld by a 5-4 vote the individual mandate.

Aetna Inc ((AET)) dropped 4% to $39.35, United Health Group ((UNH)) dropped 3% to $57.61, Cigna Corp ((CI)) dropped 3.5% to $43.81, Humana Inc ((HUM)) dropped 2.8% to $77.38 and WellPoint, Inc plunged 6% to $65.59.

Drug makers and medical devices makers were generally lower. Johnson & Johnson, Pfizer, GlaxoSmithKline and Merck declined between 0.5% and 1.2%.