Supreme Court Rules Health Care Reform Law Constitutional

The Supreme Court’s decision on June 28, 2012  to uphold President Obama’s health care reform law will go down in the history books as a crucial point for health care access in the United States.   In a 5-4 decision, Chief Justice Roberts stated that the taxing clause of the Constitution allows Congress to impose the individual mandate penalty payment requirement.

 

Here is a summary of the Supreme Court’s decision

 

1.) Anti-Injunction Act - The Anti-Injunction Act states that “no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person.”  In simplified terms, people who object to taxes must pay them first and go to court later to dispute them.  The health care reform law states that in 2014, individuals must purchase health insurance to avoid paying a penalty.  The Obama administration has tried to position the penalty as a fine instead of a tax.  Chief Justice Roberts stated that the Anti-Injunction Act was inapplicable here because Congress did not describe the penalty as a tax.

 

2.) Individual Mandate - Even though he said that the individual mandate is not a tax for the purposes of the Anti-Injunction Act, Chief Roberts said that the individual mandate was constitutional as a valid use of Congress’ taxing power.  Roberts continued by saying that neither the Commerce Clause nor the Necessary and Proper Clause of the Constitution permit Congress to impose an individual health insurance mandate.  He also stated that the individual mandate is a tax and that the Taxing Clause of the  Constitution does allow Congress to impose the individual mandate penalty payment requirement.

 

3.) Severability - If the Supreme Court had decided that the individual mandate was unconstitutional, the Court then would have had to determine if the mandate could have been  “severed” or disconnected from the rest of the health care reform law.  Since the Court ruled that the individual mandate was constitutional, the severability clause became irrelevant.

 

4.) Medicaid Expansion - The Court heard arguments about whether the health care law’s expansion of the Medicaid Program for the poor unjustly forces the states to participate in the Medicaid Program.  The Court stated that Congress cannot penalize states that choose not to participate in a new program by taking away their existing Medicaid funding.

 

 

The information contained in this Focus Benefits Flash is for informational purposes only and is not intended to be legal or other professional advice.  The provisions with health care reform are constantly changing and guidelines may change as updates are issued by the federal government.


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