On June 28, 2012, the U.S. Supreme Court upheld the Patient Protection and Affordable Care Act (ACA), landmark legislation that will significantly increase the number of Americans covered by health insurance starting in 2014, and make many improvements to Medicare, among other things. The decision is also a significant victory for people over age 50 for whom lack of health insurance - or affordable coverage - has been a serious challenge.
The Court's Rulings
The Minimum Coverage Provision:
The most controversial question before the Court was whether the ACA's requirement that all Americans, with certain exceptions, obtain minimum health insurance (the so-called individual mandate) by 2014 or pay a tax penalty is constitutional. In a 5-4 decision, the Court held that the minimum coverage provision was constitutional under Congress's taxing powers. A majority of the Court, however, rejected the federal government's main defense of the law, namely that Congress had the authority to enact the mandate under the Commerce Clause. Chief Justice John Roberts found that a person's failure to buy insurance is not an "activity" that can be regulated.
Another critically important issue the Court addressed is whether the ACA's provisions expanding Medicaid coverage to all adults under 65 with incomes below 133 percent of the poverty level unconstitutionally coerces states to participate in the expansion. Medicaid is a state- and federal-run program that provides health coverage for people with lower incomes, older people, people with disabilities, and some families and children. The Court held that the federal government may place restrictions upon states when enacting laws, such as the ACA, under Congress's spending powers, but that the federal government cannot threaten to withdraw all of a state's existing Medicaid funds if a state chooses not to expand Medicaid eligibility in its state. If, however, a state accepts federal funds for the new Medicaid expansion, the state must comply with the requirements associated with the expansion. Thus, states have a choice whether to expand their Medicaid programs.
Background and AARP's Friend of the Court Briefs
At enactment of the ACA, 45 million Americans did not have health insurance. Health care costs were outpacing the rate of inflation. People were falling into financial ruin and/or foregoing critical medical care when faced with health care needs they could not afford to address. The problem was particularly acute among older people, who have a higher incidence of chronic health conditions and often live on fixed or limited incomes, making an unanticipated expense a significant problem.
Challenges to the ACA were filed in numerous federal courts and the cases quickly worked their way through the lower courts, reaching the U.S. Supreme Court on four issues: (1) whether the law's requirement that people obtain minimum coverage either from the government or through the private market is constitutional; (2) whether the law's expansion of the Medicaid program ( a federal-state run health insurance program for low income people) to help provide coverage for at-risk populations is constitutional; (3) if either of those provisions is unconstitutional, whether the offending provisions can be severed and the remainder of the law - which includes important Medicare provisions - can stand; and (4) whether challengers to the minimum coverage provision, which does not go into effect until 2014, have standing to sue if the penalty is a tax that pursuant to the Anti-Injunction Act cannot be challenged until collected.