BREAKING NEWS: Supreme Court upholds Affordable Care Act | Behavioral Healthcare Executive Skip to content Skip to navigation

BREAKING NEWS: Supreme Court upholds Affordable Care Act

June 28, 2012
by Dennis Grantham, Editor-in-Chief, with Mark Hagland, Contributing Editor
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Individual mandate upheld as a tax; Medicaid expansion survives, but federal penalty powers with states are limited

Shortly after 10:15 AM today, the Supreme Court has ruled 5-4 to affirm the Affordable Care Act, President Obama's signature domestic act. According to information we are receiving live at this moment, Chief Justice John Roberts wrote the majority opinion. The individual mandate for the purchase of health insurance was affirmed not under the Commerce Clause of the U.S. Constitution, but in the form of a tax. We will bring our readers more information throughout the day, as more information becomes available, and will bring reactions from heatlhcare leaders.

With regard to the individual mandate, the court ruled that the federal government cannot use the Commerce Clause to justify the individual mandate, as the government cannot force people to purchase services. However, it sustained the mandate under the concept of its being a tax, as there is no criminal or civil penalty for not purchasing health insurance under the ACA.

Ruling on another significant element of the ACA, the nation's high court ruled that the Medicaid expansion provided for in the act is constitutional, but that it would be unconstitutional for the federal government to withhold Medicaid funding for non-compliance with the expansion provisions. Chief Justice Roberts wrote: "Nothing in our opinion precludes Congress from offering funds under the ACA to expand the availability of healthcare, and requiring that states accepting such funds comply with the conditions on their use. What Congress is not free to do is to penalize states that choose not to participate in that new program by taking away their existing Medicaid funding."

The news is cause for celebration among ACA advocates. One longtime advocate, Ron Manderscheid, predicted that because the insurance requirement and the Medicaid expansion will, by 2014, extend healthcare insurance coverage to nearly all Americans, the expensive burden of uncompensated and charity care long borne by the nation's hospital emergency rooms--and by taxpayers and policyholders alike--might in the not-too-distant future be a thing of the past. The ACA will promote routine primary and preventive care for nearly everyone, enabling them to manage health conditions with routine doctor visits instead of expensive, unplanned hospital visits.  

When fully implemented, the ACA also means an end to risk-avoidance practices by insurers that long sought to exclude those with health conditions from access to affordable coverage.  ACA provisions will require insurers to utilize "community ratings" that base the costs of coverage for individuals on the prevailing costs of medical services within their localities and regions, rather than setting rates based on the individual health of the patient. 

More updates throughout the day . . .