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Updated: July 30, 2012 6:03AM



WASHINGTON — President Barack Obama learned the Supreme Court upheld his signature health care plan Thursday morning about the same time as the nation, watching a television outside the Oval Office — split into four screens, all on cable channels.

Some of the earliest on-the-fly reporting about the 193-page decision had it that the court struck down the individual mandate — the linchpin to making the massive law work. But in short order White House counsel Kathy Ruemmler walked into his office and told Obama his law — derisively call “Obamacare” by critics — was valid on a 5-4 vote.

The ruling settled the legality of the hotly-contested, controversial law that will be a major part of Obama’s domestic policy legacy, whether he is re-elected in November or not.

The decision on the Affordable Care Act hands the president an election year victory in rejecting arguments that Congress did not have the power to order most people to have health insurance or pay a penalty — which five justices found to be a permissible tax.

While legal issues are settled, political wars over Obamacare will still be waged, especially with the election so close. GOP presidential candidate Mitt Romney in Washington said in reaction to the ruling, “What the court did today was say that ‘Obamacare’ does not violate the Constitution. What they did not do was say that ‘Obamacare’ is good law or that it’s good policy. ‘Obamacare’ was bad policy yesterday. It’s bad policy today.”

After the ruling, Obama said it “reaffirmed a fundamental principle: that here in America, in the wealthiest nation on earth, no illness or accident should lead to any family’s financial ruin.

“I know there will be a lot of discussion today about the politics of all this, about who won and who lost. That’s how these things tend to be viewed here in Washington.

“But that discussion completely misses the point. Whatever the politics, today’s decision was a victory for people all over this country, whose lives will be more secure because of this law and the Supreme Court’s decision to uphold it.”

The mandate ruling

In a surprise move, Chief Justice John Roberts sided with the court’s liberal wing, providing the critical swing vote in the ruling and authoring the opinion.

The justices concluded the most controversial part of the law — the individual mandate — is legal. The mandate is the provision in the law that says everyone has to buy a health insurance policy by 2014 or pay a penalty. The main challengers to the mandate were 26 states — mainly GOP dominated — and the National Federation of Independent Business.

Most people in the U.S. get health insurance through their employer or have to buy more expensive individual policies. After age 65, people switch to the government-run Medicare plans. Millions of people are uninsured — they are either unemployed, work for bosses who do not offer insurance, can’t afford it or have pre-existing conditions that had made them uninsurable.

Obama installed the mandate to pressure people to buy into a plan and to get more businesses to offer insurance. States would set up marketplaces, called exchanges, to make it easier for an individual to buy a policy. Tax breaks and other subsidies would flow to people and businesses needing financial help. By having more people insured, insurance companies would be able to spread out risks.

Roberts rejected the Obama argument that the penalty was a proper use of the Commerce provisions in the Constitution. Roberts, a conservative, was joined by the four liberal justices — Elena Kagan, Sonia Sotomayor, Ruth Bader Ginsburg and Stephen Breyer — in embracing an alternative argument by the government: that the penalty was a permissible use of Congressional taxing power.

In saving Obama’s most important domestic piece of legislation, Roberts, writing for the majority, determined that the penalty for not buying insurance — a “shared responsibility payment” — was a reasonable tax.

“The payment is not so high that there is really no choice but to buy health insurance; the payment is not limited to willful violations, as penalties for unlawful acts often are; and the payment is collected solely by the IRS through the normal means of taxation,” Roberts wrote.

“…Neither the Affordable Care Act nor any other law attaches negative legal consequences to not buying health insurance, beyond requiring a payment to the IRS. And Congress’s choice of language — stating that individuals “shall” obtain insurance or pay a “penalty” is not unlawful conduct.

Roberts made a point of not saying whether the health insurance plan was sound public policy.

“We do not consider whether the Act embodies sound policies. That judgment is entrusted to the Nation’s elected leaders. We ask only whether Congress has the power under the Constitution to enact the challenged provisions,” Roberts wrote.

The minimum tax penalty for not buying health insurance would be phased in for people: $95 in 2014, $325 in 2015 and $695 in 2016. There would be financial hardship exemptions.

The Medicaid Challenge

The other key challenge was to the authority of Congress to expand Medicaid under the Obama health law. Medicaid is the federal/state program providing insurance to the low-income medically needy and people with some specific medical problems.

The law made more people eligible for Medicaid by setting a higher income level — up to 133 percent of the federal poverty level — at a time when many states have lower income limits. While more federal funds would flow to states, if a state decided to not comply with the expanded coverage requirements, it could have lost all its existing federal Medicaid funding.

“The States claim that this threat serves no purpose other than to force unwilling States to sign up for the dramatic expansion in health care coverage effected by the Act. Given the nature of the threat and the programs at issue here, we must agree,” Roberts wrote. The ruling means a state could not participate in Medicaid expansion and not risk losing its existing funding.

Reaction

Obama signed the health care law on March 23, 2010, after it passed with Democratic votes and after a monumental battle with congressional Republicans. Obama’s reaction on Thursday was muted when he spoke from the White House.

Romney repeated his call to repeal the health law and replace it. He was mindful in his comments that one of the benefits of the law already in effect — providing coverage for people with pre-existing conditions — is one of the laws’ most popular provisions.

In re-doing health care, Romney said, “we’ve got to make sure that those people who have pre-existing conditions know that they will be able to be insured and they will not lose their insurance.

“We also have to assure that we do our very best to help each state in their effort to assure that every American has access to affordable health care.

“And something that ‘Obamacare’ does not do that must be done in real reform is helping lower the cost of health care and health insurance. It’s becoming prohibitively expensive.”

Republicans quickly seized on the court finding the Obama mandate coverage penalty is a tax, accusing Obama of breaking a pledge not to raise taxes on middle-class earners. The irony for Obama is that the court only found his mandate permissible because it is a tax.

House Speaker John Boehner (D-Ohio) said, “the president’s health care law is hurting our economy. It’s driving up health care costs and it’s making it harder for small businesses to hire new workers. I think today’s ruling underscores the urgency of repealing this harmful law in its entirety.”

House Democratic Leader Nancy Pelosi (D-Calif.) decided to just take the legal victory, no matter how the court got there. “Call it what you will; it is a step forward for America’s families. And you know what? Take yes for an answer. This is a very good thing for the American people.”



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