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Supreme Court upholds core of Obama health care law

An exterior view of the U.S. Supreme Court is seen on June 21, 2012 in Washington, D.C.

In a decision with massive political and economic implications, the U.S. Supreme Court has upheld the individual mandate and most of President Obama's Affordable Care Act.

The decision finds that forcing most Americans to buy health insurance is a tax, and therefore constitutional.

In the ruling, Chief Justice Roberts says:

Nothing in our opinion precludes Congress from offering funds under the ACA to expand the availability of health care, and requiring that states accepting such funds comply with the conditions on their use. 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.

A clause in the law regarding Medicaid payments to states was not affirmed, and complicates the impact of the decision.

Marketplace's John Dimsdale joined us live from Washington following the ruling.

"At least half the states challenged the reform law," he said, "and if they’re allowed to opt out, that would have the opposite effect on what the individual mandate confirmation would do. Some states may not provide the addition income from the mandated premiums that insurance companies can use to expand health insurance coverage."

We followed up with some analysis from Frank Newport, editor-in-chief at Gallup.

He was quick to point out that "most polling has shown at least a tilt against the health care act in general," and that some Americans might not be happy with the results.

Jeff Horwich: In a 5-4 decision -- with Chief Justice Roberts the key vote -- the U.S. Supreme Court has upheld president Obama's Patient Protection and Affordable Care Act. The U.S. economy that's been preparing can carry on, basically.

Marketplace's John Dimsdale is live with me in Washington. Hello John.

John Dimsdale: Hello Jeff.

Horwich: The key question is the individual mandate to hold insurance. By what essential reasoning did the court say the individual mandate is constitutional?

Dimsdale: Well, not under the Interstate Commerce Clause, which was the original reasoning that Congress used as a justification – but under Congress’ taxing authority, the justices said the mandate is OK. And by affirming that mandate – that requires to people to buy insurance or pay a penalty – it means that the rest of the requirements in the law, which includes limits on dropping people who have pre-existing or chronic illness; or the caps on out-of-pocket co-payments; and covering young people until they’re 26 years old. The individual mandate is how the insurance companies can afford to expand health coverage like that – so this basically upholds the law.

Horwich: Well, the court also said – this gets a little bit more complicated -- states cannot be forced to enforce the mandate by the federal Government by threatening to withhold their existing Medicaid money. Is that right?

Dimsdale: That’s right. And many states had argued that the federal government can’t do that. The court says that the feds can do it, but they can’t punish the states by withholding the federal government’s share of Medicaid reimbursements. You know, at least half the states challenged the reform law, and if they’re allowed to opt out, that would have the opposite effect on what the individual mandate confirmation would do. Some states may not provide the addition income from the mandated premiums that insurance companies can use to expand health insurance coverage. So it is nuanced.

Horwich: Marketplace’s John Dimsdale in Washington. Thank you very much, John.

Dimsdale: You’re welcome.

Horwich: Well, it is a perfect time for a little Attitude Check. This is our weekly partnership with Gallup. Editor-in-chief Frank Newport has been standing by and is with me now as always. Quite a day, huh Frank?

Frank Newport: Quite a day indeed.

Horwich: So is this a decision, based on your polling, that is in tune with the American public?

Newport: No it's not. Most polling has shown at least a tilt against the health care act in general, so the decision which will be interpreted in the headlines as supporting it will not be. A couple of recent polls: by a seven point margin in a NBC/Wall Street Journal poll found people would be more disappointed than pleased if it was upheld. This was prior to today, but that's what the polling showed.

A Pew research poll found that be a 12 point margin, people would be unhappy, rather than happy, if the Supreme Court upheld the entire law. So that pre-polling certainly indicates that the reaction by the American public is going to tilt more positive -- although, we're going to have to wait and see what happens.

Horwich: Americans have been glued to this, certainly, for political reasons; it's very interesting as politics. Did they think the outcome was going to affect their lives directly?

Newport: I don't think so, because the polling has shown that Americans don't think the entire 2010 Affordable Care Act is affecting them in its entirety, regardless of this decision. So it's upheld, but our polling and others has shown that Americans say so far it hasn't affected them. And we've asked Americans to project: do you think, when all the provisions are put in place, it will have a major impact on your life? And a lot of Americans say, no, it won't.

So I think personally Americans are saying this would be something like the threat of taking Social Security away. A lot of Americans think this act isn't going to affect them personally.

Horwich: Very glad to have you with us as always. Frank Newport is editor-in-chief of Gallup.

About the author

As head of Marketplace’s Washington, D.C. bureau, John Dimsdale provides insightful commentary on the intersection of government and money for the entire Marketplace portfolio.
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This means to me one step forward fixing a system that cost $4.5T to provide $1T in health care. Now if we can just get the idiots making law to not retract it taking a step backwards and come to a compromise that might move us forward perhaps one half a step.

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