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Supreme Court upholds healthcare law as tax measure

Demonstrators+for+and+against+the+Patient+Protection+and+Affordable+Care+Act+march+and+chant+outside+the+U.S.+Supreme+Court+Building+on+March+27%2C+2012+in+Washington%2C+DC.++The+Supreme+Court+digs+deep+into+health+care+this+morning%2C+as+the+justices+consider+the+most+important+challenge+to+the+law%3A+compelling+individuals+to+buy+insurance+or+pay+a+fine.+%28Olivier+Douliery%2FAbaca+Press%2FMCT%29
Olivier Douliery
Demonstrators for and against the Patient Protection and Affordable Care Act march and chant outside the U.S. Supreme Court Building on March 27, 2012 in Washington, DC. The Supreme Court digs deep into health care this morning, as the justices consider the most important challenge to the law: compelling individuals to buy insurance or pay a fine. (Olivier Douliery/Abaca Press/MCT)

WASHINGTON — The U.S. Supreme Court upheld the constitutionality of President Obama’s healthcare law Thursday, ruling the government may impose tax penalties on people who do not have health insurance.
The court’s long-awaited ruling rejected a broad legal attack on the Patient Protection and Affordable Care Act brought by Republican state officials and the National Federation of Independent Business.
The legal challenge focused on the law’s so-called mandate that all must have insurance by 2014 or pay a tax penalty.

The administration defended this requirement under Congress’s power to regulate inter-state commerce. The challengers insisted the mandate was unprecedented and unconstitutional because the federal government would be forcing Americans to buy a private product.

“We do not make light of the severe burden that taxation, especially taxation imposed by a regulatory purpose, can impose,” Chief Justice John Roberts Jr. wrote for the 5-4 majority. “But imposition of a tax nonetheless leaves an individual with a lawful choice to do or not do a certain act so long as he is willing to pay a tax levied on that choice.”

The ruling was not a total victory for the Obama administration. Chief Justice Roberts also said the required expansion of Medicaid violates states’ rights and may be unconstitutional.

“The states are given no choice in this case. They must either accept a basic change in the nature of Medicaid or risk losing all Medicaid funding,” he wrote.

He said the federal government cannot require the states to follow this part of the law.

Robert’s opinion was joined by Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan.

Justice Anthony Kennedy delivered a dissent for Justices Antonin Scalia, Clarence Thomas and Samuel A. Alito Jr.

“In the case of the Affordable Care Act, Congress went to great lengths to structure the mandate as a penalty, not a tax,” Kennedy wrote for the dissenters. “But the majority now says that it is a tax, at least for the purpose of sustaining it.”

Several parts of the healthcare law are intimately tied to the mandate. In particular, the so-called “guaranteed issue” and “community rating” requirements. By roping in healthy customers, the mandate helps keep premiums down and insurance companies stable in the face of new requirements that they sell insurance to anyone who asks for it. The healthcare law prohibits companies from charging more for or denying coverage to those with pre-existing medical conditions.

Twenty-six provisions took effect in 2010, the law’s first year, and 17 went on the books last year, according to the Kaiser Family Foundation. Nine new provisions have taken effect this year.

The much-anticipated ruling came on the last day of the court’s 2011 term, which began last October, and it lands amid tangled political turf. Forty-four percent of U.S. residents surveyed in May expressed unfavorable views of the law and 37 percent have favorable views, the Kaiser Family Foundation found.

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