• Key Points from U.S. Supreme Court Ruling Upholding Health Care Reform
  • July 3, 2012 | Authors: Steven "Steve" D. Gravely; Stephen "Steve" D. Rosenthal; Erin S. Whaley
  • Law Firm: Troutman Sanders LLP - Richmond Office
  • The United States Supreme Court has upheld the constitutionality of the Patient Protection and Affordable Care Act. The key “takeaways” from the Court’s ruling are:

    • The Court ruled that the “individual mandate” was within the power of Congress to tax and was, therefore, constitutional. Chief Justice Roberts, writing the majority opinion, concluded, “The Affordable Care Act’s requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax. 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 specifically rejected the constitutionality of the individual mandate under both the Commerce Clause and the Necessary and Proper Clause of the Constitution. The implications of this will have to be evaluated since the Taxing Clause is much more limited in scope than the Commerce Clause of the Constitution.
    • The Medicaid expansion provisions of the Affordable Care Act were upheld, meaning that the federal government may award funds to the states to enroll the previously uninsured into the State Medicaid Programs and, if a state accepts the funding, it must use that funding for the expansion. However, the Court struck down the portion of the ACA which allowed the federal government to withdraw all Medicaid funding to a state that refused to accept the Medicaid expansion funding. The provision is constitutional only to the extent that states would lose new funding, rather than all funding. This opens the door for states to make individual decisions about whether to participate in the Medicaid expansion program.

    The specific practical implications of the Court’s ruling will unfold over the next few weeks and months.