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U.S. Supreme Court Decision on the Affordable Care Act

June 29, 2012

Yesterday, the Supreme Court announced its decision to uphold the Affordable Care Act.  Specifically, the Court considered two aspects of the ACA: the individual mandate and the expansion of Medicaid coverage in include all individuals whose income falls below 133% of the poverty level.

With respect to the individual mandate, Chief Justice Roberts, in writing for the majority, concluded that, although Congress does not have the authority to require individuals to have health insurance, it does have the authority to tax individuals who do not.  This means that most Americans will be required to maintain minimum essential health coverage.  If individuals choose not to do so, they will be required to make a "shared responsibility payment" to the IRS. 

Additionally, the Court ruled that the Medicaid expansion under the ACA violates the Constitution.  The ACA gives the Secretary of Health and Human Services the authority to threaten states with the loss of existing Medicaid funding if they choose not to comply with the Medicaid expansion.  The Court explained that Congress may not require states to regulate in this way.  The Court concluded, though, that this Constitutional violation is remedied by eliminating the provision that gives the Secretary the ability to withdraw existing Medicaid funds.  The Medicaid expansion otherwise stands.

A link to the full text of the opinion is below.  Watch for Varnum's upcoming detailed analysis of what this opinion means for your business.

Supreme Court Decision to uphold the Affordable Care Act

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