Supreme Court Upholds Health Care Reform

In a victory for the Obama Administration, and despite initial media reports to the contrary, the Affordable Care Act has been upheld by the Supreme Court. The basic import here is that all litigation is done and that the law proceeds. Access the full text of the decision here: Supreme Court Upholds Health Care Reform

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The ruling was mixed, in that Chief Justice Roberts joined the left-leaning four justices in determining that the individual mandate is in fact a tax and within the powers of Congress. The ruling appears to limit the ability of the federal government to withhold Medicaid funding to states; it is somewhat unclear at this moment what the implications of this will be. However, it is clear that the architecture of the Affordable Care Act is not going to be overturned by the Supreme Court.

A quick observation by our legal advisors: On the very first day of the ACA arguments before the U.S. Supreme Court, Solicitor General Donald Verrilli stood before the Court and said “Today, I will argue that the individual mandate is not a tax for purposes of the anti-tax injunction act [which prohibits challenges to tax statutes before the tax is paid]; tomorrow I will argue that the mandate is a tax that may be imposed by Congress under its tax and spending powers under the United States Constitution.” Today – by a 5-4 vote with Chief Justice Roberts casting the deciding vote, the Court agreed with the Solicitor General and upheld the law. Here is the key quote from the majority opinion: “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. This is sufficient to sustain it.”

The decision today was extremely surprising to all insofar as Justice Kennedy was not in fact the deciding vote, and Chief Justice Roberts was. In the end, however, it is clear that the issues surrounding the Affordable Care Act will be resolved in the November elections.

A detailed analysis on the decision, its impact on clients and brokers, and how ACA moves forward with implementation will be emailed in the next 24 to 28 hours.

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