Supreme Court Lets Health Law Largely Stand, in Victory for Obama

The decision was a victory for President Obama and Congressional Democrats, affirming the central legislative pillar of Mr. Obama’s presidency. The ruling upheld the individual mandate requiring nearly all Americans to obtain health insurance or pay a penalty.

“The Affordable Care Act’s requirement that certain in­dividuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax,” Chief Justice Roberts wrote in the majority opinion. “Be­cause the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness.”

The justices rejected the argument that the administration had pressed most vigorously in support of the law, that its individual mandate was justified by Congress’s power to regulate interstate commerce. The vote was again 5 to 4, but here Chief Justice Roberts was joined by the court’s four more conservative members.

The court did substantially limit a major piece of the law, one that expanded Medicaid, the joint federal-state program that provides health care to poor and disabled people. Seven justices agreed that Congress had exceeded its constitutional authority by coercing states into participating in the expansion by threatening them with the loss of existing federal payments.

Justice Anthony M. Kennedy, frequently the swing vote, joined three more conservative members in an unusual jointly written dissent. He read from the bench that the minority viewed the law as “invalid in its entirety” and that the court’s interpretation “amounts to a vast judicial overreaching.”

The court’s ruling, seen as one of the most significant in decades, is a crucial milestone for the law, allowing almost all of its far-reaching changes to roll forward. Several of its notable provisions have already been put in place in the past two years, and more are imminent. Ultimately, it is intended to end the United States’ status as the only rich country with large numbers of uninsured people, by expanding both the private market and Medicaid.

President Obama spoke from the White House shortly after the decision was handed down. “Whatever the politics, today’s decision was a victory for people all over this country whose lives are more secure because of this law,” he said.

Republicans, who have made repeal of the law a priority, once again bashed the measure.

“Obamacare was bad policy yesterday; it’s bad policy today,” said Mitt Romney, the presumptive Republican presidential nominee, in remarks before the Capitol building. “Obamacare was bad law yesterday; it’s bad law today.”

In the Republican-controlled House of Representatives, a largely symbolic vote to repeal the measure was scheduled for next month.

"The real outcome of today's decision is to strengthen our resolve, to make sure that this law is in fact repealed," House Speaker John A. Boehner of Ohio said.

Although many conservatives were stung that the law will stand, the court’s ruling did have the potential to restrain Congress in the longer term. The restriction of the Medicaid expansion could limit the federal government’s ability to alter other federally financed state programs.

The commerce clause ruling revised the constitutional structure, handing a victory to conservative legal scholars who say Congress’s power to regulate interstate commerce must have defined limits. New challenges to federal laws on commerce clause grounds are likely to follow.

In the opinion, Chief Justice Roberts wrote that the decision offers no endorsement of the law’s wisdom, and that letting it survive reflects “a general reticence to invalidate the acts of the nation’s elected leaders.”

“It is not our job to protect the people from the consequences of their political choices,” he wrote.

The law was challenged by 26 states, with the individual mandate the most contested issue.

Many conservatives considered the mandate unconstitutional under the commerce clause, arguing that if the federal government could compel people to buy health insurance, it could compel them to buy almost anything -- even broccoli, the archetypal example debated during the oral arguments three months ago.

A majority of the court reasoned that the individual mandate penalty, to be collected by the Internal Revenue Service starting in 2015, is a tax and is not unconstitutional.

The court’s four liberals made it clear that they disagreed with the view of Chief Justice Roberts on the commerce clause.

In a separate dissent from the bench, Justice Ruth Bader Ginsburg, speaking for herself and Justices Stephen G. Breyer, Sonia Sotomayor and Elena Kagan, said the court’s commerce clause ruling was "a stunning step back that should not have staying power.”

“In the end,” she said, summarizing her position near the end of a nearly hourlong court session, “the Affordable Care Act survives largely unscathed. But the court’s commerce and spending clause jurisprudence has been set awry.”

The Obama administration has argued that the mandate was necessary because it allowed other provisions of the health care law to function: those overhauling the way insurance is sold, and those preventing sick people from being denied or charged extra for insurance.

The mandate’s advocates said it was necessary to ensure that not only sick people but also healthy individuals would sign up for coverage, keeping insurance premiums more affordable. The law offers subsidies to poorer and middle-class households, varying with their incomes. It also provides subsidies to some businesses for insuring their workers.

The court upheld a major expansion of Medicaid intended to add millions of low-income people to its rolls, but limited the power of the federal government to enforce this provision by penalizing states that refuse to go along.

Chief Justice Roberts said the federal government could not compel states to comply by cutting off all the federal money they receive for existing Medicaid programs. That aid is more than 10 percent of state budgets.

The threatened loss of so much federal money “is economic dragooning that leaves the states with no real option but to acquiesce in the Medicaid expansion,'’ the chief justice said. “A state could hardly anticipate that Congress’s reservation of the right to ‘alter’ or ‘amend’ the Medicaid program included the power to transform it so dramatically.'’

Congress can offer money to the states to expand Medicaid and can attach conditions to such grants, the chief justice said. But, he added, “What Congress is not free to do is to penalize states that choose not to participate in that new program by taking away their existing Medicaid funding.'’

Rulings by appeals courts on the health care law had split on the main questions, with two courts upholding the law, one striking down the mandate and another deferring consideration of the law until 2015, reasoning that the courts lacked jurisdiction until the first penalties enforcing the mandate came due.

The Supreme Court’s decision came on the last day of the term, which the justices extended by three days to deal with the crush of major issues. On Monday, the court overturned several parts of an Arizona law intended to crack down on illegal immigrants, which the Obama administration opposed, while allowing one notable provision to stand. In the Arizona immigration case, Justice Kennedy joined Chief Justice Roberts and the liberal justices in throwing out portions of the law.

Robert Pear and Adeshina Emmanuel contributed reporting.