Supreme Court Ruling on the Affordable Care Act

Today the Supreme Court announced its decision on the constitutionality of the Affordable Care Act, or health care reform, in a case officially entitled National Federation of Independent Businesses et al. v. Sebelius, Secretary of Health and Human Services, et al. As was discussed in a previous NCSD Weekly Update, the court took up four separate issues regarding the law:

• • Should the court even be ruling on the law, considering the law is not fully implemented until 2014.
  • The constitutionality of the requirement for most citizens to have insurance, referred to as the individual mandate.
  • Whether or not the individual mandate can be “severed” from the rest of the law—meaning if the individual mandate was struck down, should all or part of the rest of the law be struck down as well?
  • And the constitutionality of the expansion of the Medicaid program, which requires states to increase their Medicaid coverage to 133% of the federal poverty level (FPL) or lose all Medicaid funding from the federal government.

In a 5-4 decision with Chief Justice John Roberts writing the majority opinion, the Supreme Court upheld the Affordable Care Act, including the individual mandate, as constitutional. Specifically, the Court read the mandate that most Americans have health care coverage as a tax, deeming the individual mandate as constitutional due to Congress’ taxing power.

The Court also upheld the expansion of the Medicaid program as constitutional, but limited Congress’ ability to withhold all federal Medicaid funds from states that do not comply with the new eligibility requirements. On that question, the Court held that the Medicaid expansion was constitutional as long as states would only lose new funds if they did not comply with the new requirements, rather than all of their federal Medicaid funding. Said another way, the Court found that states could choose to not expand its Medicaid program to 133% of FPL (as currently required in the law) and still keep their existing Medicaid funds, only losing out on the federal funds to expand Medicaid coverage.

Additional analysis from NCSD on the ruling will be coming as staff continues to wade through all the judicial arguments. Please stay tuned for additional updates as part of the NCSD Weekly Update.

As always, if you have questions or concerns, please contact Stephanie Arnold Pang, NCSD’s Manager, Policy and Communications at sarnold@ncsddc.org or 202-715-3865.