U.S. Supreme Court Upholds Patient Protection and Affordable Care Act Under Taxation Clause in Nat'l. Fed'n. of Independent Business v. Sebelius

In a history-making decision, the Supreme Court today ruled that the Patient Protection and Affordable Care Act (PPACA) is constitutional under the taxation clause of the Constitution. The most controversial provision was the individual mandate or "minimum essential" coverage provision that establishes the requirement that nearly all Americans secure health insurance (26 U.S.C. §5000A).

In an extremely fractured opinion, authored by Chief Justice John G. Roberts Jr., the Court upheld this central component of the PPACA, finding that that a penalty for refusing to buy health insurance amounts to a tax and is therefore within Congressional power to impose. The Court also noted that another key provision of the law, involving existing Medicaid funding from the Federal government to the states, cannot be implemented by withdrawing this funding entirely from states that decide not to participate in a broad expansion of Medicaid eligibility. The ruling comes as a bit of a surprise for many who have been tracking the progression of the case. Following oral arguments on March 26-28, the general feeling was that the PPACA would be substantially modified by the Supreme Court, and since the PPACA lacks a severability clause, the bill in its entirety was at risk of being struck down.

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