Supreme Court upholds individual mandate

In a long-awaited landmark decision, the U.S. Supreme Court today upheld a key provision of the federal health care reform law requiring individuals to buy health insurance or pay an annual penalty.

Though the insurance requirement is unconstitutional, the penalty payment for uninsured Americans is allowed as a federal tax, justices ruled.

The court struck down a section of the Affordable Care Act that empowers federal officials to withdraw existing Medicaid funding  to states that refuse to expand their Medicaid program coverage to comply with the controversial law. The law requires states to provide Medicaid coverage by 2014 to adults with incomes up to 133 percent of the federal poverty level.

Addressing the chief legal challenge to health care reforms, the court ruled that the mandate for individual health coverage is not a valid exercise of Congress”™s power to regulate commerce. Nor can it be upheld as necessary to other reforms in the Affordable Care Act, as government attorneys argued, U.S. Chief Justice John Roberts said in the 193-page ruling.

However, the financial penalty for persons who do not obtain insurance qualifies as a tax and can be levied by Congress. “The payment is not so high that there is really no choice but to buy health insurance; the payment is not limited to willful violations, as penalties for unlawful acts often are; and the payment is collected solely by the IRS through the normal means of taxation,” the court concluded.

“None of this is to say that payment is not intended to induce the purchase of health insurance. But the mandate need not be read to declare that failing to do so is unlawful.”

“Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness,” the court said in its ruling.

The legal appeal to the nation”™s highest court was brought by the National Federation of Independent Business, Florida and 25 other states and two private citizens. A federal appeals court had ruled that Congress lacked authority to impose the individual mandate but upheld the expansion of Medicaid coverage.

Check back for additional coverage as health care experts break down the ruling and its ramifications.