In one of the most anticipated rulings of the century, the Supreme Court has ruled 5-4 to largely uphold the Patient Protection and Affordable Care Act of 2010.

The text of the opinion, in National Federation of Business vs. Sebelius, Case Number 11-393, is available here.

In the 90-page opinion, the court states that Congress has no authority under the Commerce Clause of the U.S. Constitution to require individuals to own a minimum level of insurance, but does have the authority to use its taxation authority to impose a coverage mandate.

However, the decision does allow states the option to not to go along with the expansion of the Medicaid insurance program for low-income people.

George Patton, an appellate lawyer with Bose McKinney & Evans LLP, of Washington, D.C. and Indianapolis, said under the decision, states can choose to expand Medicaid to 133 percent, but they are not required to.

Congress cannot “penalize States that choose not to participate in that new program by taking away their existing Medicaid funding,” Roberts said in the majority opinion.

Regarding the individual mandate, state attorneys general and others have been arguing that the provision in PPACA calling for most individuals to own a minimum level of health insurance starting in 2014 or else pay a penalty is unconstitutional, stating that Congress has no authority to make individuals buy a commercial insurance product.

Chief Justice John Roberts has written in an opinion for the majority that the Commerce Clause of the Constitution gives Congress no more authority to require the purchase of health insurance than to require the purchase of broccoli.

According to the Obama administration, a requirement that citizens buy health insurance is different from a requirement that they buy broccoli because “[h]ealth insurance is not purchased for its own sake like a car or broccoli; it is a means of financing health-care consumption and covering universal risks,” Roberts writes.

The connection between mandated insurance purchases and future use of insured health care is too remote for the goverment to use the Commerce Clause to justify the PPACA mandate, Roberts says.

But, Roberts says, “[B]roccoli are no more purchased for their 'own sake' than health insurance. They are purchased to cover the need for transportation and food.”

But the Constitution does give Congress the authority to “lay and collect Taxes,” Roberts says.

The Obama administration and congressional PPACA supporters have avoided calling the penalty to be imposed on taxpayers who fail to meet individual health insurance ownership requirements a tax, but, under one Obama administration theory, “the mandate is not a legal command to buy insurance,” Roberts says. “Rather, it makes going without insurance just another thing the Government taxes, like buying gasoline or earning income. And if the mandate is in effect just a tax hike on certain taxpayers who do not have health insurance, it may be within Congress's constitutional power to tax. The question is not whether that is the most natural interpretation of the mandate, but only whether it is a 'fairly possible' one.”

Imposition of a tax “leaves an individual with a lawful choice to do or not do a certain act, so long as he is willing to pay a tax levied on that choice,” Roberts says. “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. Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness.”

Justices Clarence Thomas, Antonin Scalia, Samuel Alito and Anthony Kennedy opposed the ruling and joined to write a dissenting opinion.

INDUSTRY, ANALYSTS REACT

Industry officials and analysts caution that the ultimate decision will be left to the voters. They also caution that even if President Obama wins re-election, implementation of the health exchanges, a key component of the law, could be delayed, perhaps a year.

The National Association of Insurance Commissioners weighed in with a pledge to “continue to work to give regulators the tools they need to ensure a stable health-insurance marketplace in the states.”

The statement adds, “Where the ACA provides states with latitude, regulators will continue to work with insurers, consumer groups and the public to provide the best regulatory framework going forward.”

However, while signing on to the NAIC statement, NAIC president Kevin McCarty implied that he might have difficulty getting the Florida legislature to act to implement the exchanges and other provisions of the law.

The state was a hotbed of opposition to the decision, and a federal court in Pensacola was the only federal court to declare the law unconstitutional, a decision which today's Supreme Court decision reversed.

McCarty says, “With the affirmation of the Affordable Care Act, I remain concerned about the potential for increased health insurance premiums and continued disruption to the stability of the marketplace for many Floridians.

“Nevertheless, we will work with the Florida Legislature and Gov. Scott to implement the Supreme Court's decision and develop an implementation strategy that minimizes market disruption and allows Florida's health insurers and HMOs to continue to provide coverage in our state.”

Ken Crerar, president of the Council of Insurance Agents and Brokers, says, the “ruling appears to limit the ability of the federal government to withhold Medicaid funding to states; it is somewhat unclear at this moment what the implications of this will be. However, it is clear that the architecture of the Affordable Care Act is not going to be overturned by the Supreme Court.”

Andrew C. Harris, president of the National Association of Professional Insurance Agents, called the decision “unfortunate,” saying the bill “has been widely criticized by the public and the insurance industry.”

But he adds, “We urge all states to now deal with the issue of insurance exchanges in a manner that guarantees the right of insurance consumers to rely on the expertise of licensed professionals as they make important decisions about their health insurance coverage.”

Elizabeth Festa contributed to this report.

This story originally appeared on LifeHealthPro, a sister site of PC360.

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Supreme Court Upholds Healthcare Law; Industry Reacts

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