Supreme Court upholds health care reform law

By the narrowest possible margin, the U.S. Supreme Court on Thursday upheld virtually all of the Affordable Care Act, the health care reform law considered the central achievement of President Barack Obama.

Chief Justice John Roberts, writing for the 5-4 majority, said the requirement that almost all Americans purchase health insurance is constitutional. The penalty for failing to obtain insurance, he said, is a tax — and Congress has broad authority to levy taxes.

“Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness,” Roberts wrote.

The court also upheld the law’s expansion of Medicaid, the health care program for the poor, but said it can’t require states to either join that expansion or drop out of Medicaid. Instead, the court ruled, states choosing not to expand Medicaid must continue to get existing federal Medicaid funds.

The decision ends a two-year legal battle over the most controversial aspects of the health reform law, which touches virtually every American. But it did not end the political battle.

Republicans vowed to step up efforts to repeal the law. Democrats claimed vindication from the court.

“Today’s decision was a victory for people all over this country,” Obama said in remarks from the White House. “I know the debate over this law has been divisive. ... I did this because I believed it was good for the country.”

Missouri Democrats were more cautious in their reactions. Gov. Jay Nixon, who repeated his opposition to the mandate this week, said he was reviewing the opinion.

A spokesman for Sen. Claire McCaskill said her goal remains “affordable, accessible health care for Missouri” but made no specific reference to the decision.

Republicans, who call the law Obamacare, were aggressive in their criticism.

Likely GOP presidential nominee Mitt Romney said the ruling increased the importance of replacing Obama. “Obamacare was bad policy yesterday. It’s bad policy today,” he said.

Other Republicans vowed to make repeal of the law a central issue in this fall’s campaign.

“Stopping Obamacare is now in the hands of the American people,” said Kansas Gov. Sam Brownback.

House Republicans are scheduled to take another repeal vote in July, but it has no chance in the Senate, which is controlled by Democrats.

While politicians bickered over the ruling, the court’s decision provided some clarity for insurers, health care providers and patients — at least for now. Popular parts of the law, such as the rule allowing young adults to stay on their parents’ policies or help for seniors with drug costs, will remain intact.

“It’s a huge relief,” said Chris Davids, a 24-year-old Kansas City graduate student who is covered under his mother’s policy. “It’s very nerve-wracking coming out of college without insurance.”

Some health care providers were also pleased the law remains largely in place.

“Actually, I’m ecstatic,” said Sharon Lee, a physician and CEO of Southwest Boulevard Family Health Care, a safety net clinic in Kansas City, Kan. “I see the struggle patients have every day being excluded from the mainstream health care system.”

Most health insurers were particularly relieved the so-called individual mandate was upheld. They would go bankrupt, they said, if the law required them to cover people with pre-existing medical conditions but healthy people weren’t required to buy coverage.

“Everyone in the health care industry is sighing in relief that this part of it, the individual mandate question, is over,” said Tom O’Donnell, a Kansas City attorney who represents doctors and hospitals.

While much of the attention Thursday focused on the individual mandate, the court’s ruling on Medicaid may be equally significant over the long term, experts said.

Expanded Medicaid coverage is considered essential in providing health care for millions of Americans who lack insurance now. The proposed expansion in the law would make it easier for lower- and middle-class families to qualify for Medicaid, and improves the benefits from it.

The Urban Institute estimates that 118,000 non-elderly Kansans and 272,000 non-elderly Missourians would be eligible for coverage under the Medicaid expansion.

But states, which share the cost of Medicaid with the federal government, have resisted, claiming the expansion eventually would cost them billions of dollars. And some bitterly accused the federal government of blackmailing states by threatening to cut off all Medicaid funds if they chose not to expand the program.

The court’s ruling that such a cutoff would violate the Constitution may make it easier for states to avoid the expansion, potentially leaving millions still uninsured.

States now have “very little” incentive to expand Medicaid, outgoing Kansas state Sen. John Vratil said. “I think you’ll see a lot of states just sticking with their current programs.”

John Bluford, CEO of Truman Medical Centers in Kansas City, called the Medicaid decision a glitch.

“Our patients were going to be the beneficiaries,” Bluford said. “There’s a high degree of likelihood that several states, including ours, won’t participate.”

At the same time, the federal government has promised to pick up much of the cost of the expansion, which may convince some states to take part, said Thomas McAuliffe of the Missouri Foundation for Health.

“Lots of states are going to jump at this. I don’t think Missouri is,” he said. “We’re going to have a long protracted discussion about Medicaid.”

Advocates for health care recipients said they hope states will pursue the expansion.

“We support the federal law as it pertains to the expansion of Medicaid, and hope that Missouri and Kansas will comply with the provisions,” said Steve Roling, president and CEO of the Health Care Foundation of Greater Kansas City.

While states will have to wrestle with Medicaid, they also now face quick decisions on setting up health insurance exchanges, where residents can compare policies and buy coverage.

The law requires states to establish a framework for their exchanges by the end of the year or face a federal takeover of the process.

Missouri and Kansas, like many other states, have delayed implementation of the exchanges, which they see as a tacit endorsement of Obamacare.

On the final day of the Missouri General Assembly session last month, Republican lawmakers pushed through a measure that will appear on the Nov. 6 ballot allowing voters to decide whether to prohibit the governor from establishing a state health insurance exchange.

Nixon has repeatedly said he would not try to create an exchange on his own.

In Kansas, state Insurance Commissioner Sandy Praeger said Thursday that it’s probably too late now for the state to meet deadlines to retain full control over its health insurance exchange.

But Praeger held out hope that an exchange jointly operated by the state and federal governments was still feasible. For that to happen, the state must send the Department of Health and Human Services a letter of intent before a Nov. 16 deadline. Praeger said it would be in the state’s best interest to retain as much authority as possible over its exchange.

Praeger, a Republican, said she probably could send the letter to HHS on her own authority, but wouldn’t do it without Brownback’s approval.

“To move ahead without the governor’s support, I do not think would be politically smart,” she said.

Brownback told reporters Thursday that he wanted to wait until after the November election before pursuing any exchange in the state.

The court’s decision could mean changes locally, too. Kansas City Mayor Sly James said more insured patients might reduce the need for taxpayer support for the Truman Medical Center. And, he said, “I’m happy my kids will continue to be covered.”

Businesses and insurers, meanwhile, spent the day determining their next steps. Many had waited until the court ruled to examine their own policies and procedures regarding employees’ health care.

While repeal remains a possibility, the court’s ruling provides some certainty for business, experts said.

“Employers are behind the curve now if they’re not already planning for the 2013 benefit year,” said insurance broker Ed Fensholt.

Some conservatives took heart in the court’s decision that Congress did not have the power to impose the individual mandate through its power to regulate commerce. That decision, they said, would make it harder to use the commerce power in future legislation.

“Had Obamacare been upheld under the Commerce Clause, then our Constitution would have been a dead letter without limits on congressional power,” wrote James Barton for National Review Online.

Some observers were surprised at Roberts’ role in providing the deciding vote for the law. The chief justice most often sides with the conservatives on the court.

“I think this reflects pretty favorably on Roberts,” said Kansas City lawyer Brian Finucane. “He’s a smart guy, aware of the political controversy, but rendered his decision on a principled legal ground, that Congress has the authority to tax.”

While the decision ends the legal battle over the individual mandate and Medicaid, other legal challenges to parts of the law are still underway. Several groups are suing over the government’s requirement that private insurance policies include contraception coverage, even from some religiously affiliated organizations.

In the dissenting opinion, four justices said the entire health care law was unconstitutional.

“The values that should have determined our course today are caution, minimalism, and the understanding that the Federal Government is one of limited powers,” the dissent said.

“But the Court’s ruling undermines those values at every turn. In the name of restraint, it overreaches. In the name of constitutional avoidance, it creates new constitutional questions. In the name of cooperative federalism, it undermines state sovereignty.”

This story was originally published June 29, 2012 at 12:00 AM with the headline "Supreme Court upholds health care reform law."