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In Landmark Decision U.S. Supreme Court Upholds Affordable Care Act

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U.S. Supreme Court upheld Affordable Care Act in landmark decision Paul Katz/Photodisc/Thinkstock

In a 5 to 4 vote, the U.S. Supreme Court today upheld the so-called “individual mandate,” the key funding provision and centerpiece in the 2010 Patient Protection and Affordable Care Act saying it was constitutional.

The individual mandate survives as a tax.

Writing for the majority opinion, Chief Justice John Roberts said, "We do not consider whether the Act embodies sound policies. That judgment is entrusted to the Nation's elected leaders. We ask only whether Congress has the power under the Constitution to enact the challenged provisions."

“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 Chief Justice wrote.

The Court however rejected the Government’s main argument that the Commerce Clause, which allows Congress to use its power to regulate commerce between the states, in this case, to require everyone to buy health insurance, was the Necessary and Proper Clause to uphold the mandate.

The court reinforced that individuals may pay the penalty tax and not comply with the mandate if they so choose, however, the law was found to violate the Commerce Clause.

Since the mandate survived, the Court did not need to decide what other parts of the statute were constitutional, except for a provision that required states to comply with new eligibility requirements for Medicaid or risk losing their funding.

The so-called Medicaid Coercion issue — whether Congress can require the states to comply with the law's new requirements for eligibility for Medicaid or risk losing all of their funding for Medicaid — a majority of the Court holds that the Medicaid expansion is constitutional, but that it is unconstitutional for the federal government to withhold Medicaid funds for non-compliance with the expansion provisions.

On that question, the Court held that the provision is constitutional as long as states would only lose new funds if they didn't comply with the new requirements, rather than all of their funding.

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