U.S. Supreme Court Upholds Health Care Law

Today, the United States Supreme Court issued an historic ruling, and upheld the Affordable Care Act (ACA) which became law on March 23, 2010. The ACA created sweeping reform to the health care system in the United States. The driving principles behind the ACA are to provide affordable health care to all Americans, reduce the growth of the health care costs and improve the health of our communities.

At the heart of the Court’s ruling was a determination that the individual mandate of the ACA is constitutional. The individual mandate requires nearly all Americans to purchase and maintain health insurance. The Court determined that the penalty associated with the individual mandate is a permissible tax that can be imposed by Congress under the taxing power.

The ACA required that States comply with new eligibility requirements for Medicaid or risk losing their federal funding. Specifically, the ACA expanded the Medicaid program from covering medical services for particular categories of vulnerable individuals to a program designed to meet the heath care needs of the entire non-elderly population with income below 133% of the poverty level. The Court determined that the States could hardly anticipate that Congress would transform the program so dramatically. As such, the Medicaid expansion violates the Constitution by threatening the States with the loss of their existing Medicaid funding if they decline to comply with the expansion. The Court’s solution to this issue was to strike down, as unconstitutional, the ability of the Secretary of Health and Human Services to withdraw existing Medicaid funds from a State that fails to comply with the requirements set out in the expansion.

It is important to note that with the ruling, the health care industry will have some relative certainty to go forward to implement plans they had drawn since the law was enacted. And the states will now move forward to implement those provisions they are obligated to undertake.

While there may be Congressional skirmishes and efforts to amend or repeal the law, for now the message is that Congress has spoken.

Fraser Trebilcock’s Health Care Practice Group will provide additional coverage and analysis of the Supreme Court’s ruling throughout the day.

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