The U.S. Supreme Court ruled 5-4 Thursday the federal health-care law's individual mandate survives as a tax, handing a major victory to President Obama.
Chief Justice John Roberts, who wrote the prevailing opinion, abandoned his fellow conservatives and said the mandate can't be upheld under Congress' broad power to regulate interstate commerce but can be upheld under its power to tax.
The ruling is an enormous legal and political victory for President Obama.
"Our precedent demonstrates that Congress had the power to impose the [penalty for failing to buy health insurance] under the taxing power, and that [the relevant section of the Affordable Care Act] need not be read to do more than impose a tax. This is sufficient to sustain it," Roberts wrote.
The individual mandate is set to be implemented in 2014. When it does come into play, anyone who can afford insurance and doesn't purchase it could be fined as much as 2.5 percent of income -- hence the tax.
But in a partial defeat for the administration, Roberts said the law cannot threaten to withhold Medicaid funds from states that do not participate in the ACA's expansion of that program. That part of the ruling was joined by a plurality, not a majority of the justices.
"Nothing in our opinion precludes Congress from offering funds under the ACA to expand the availability of healthcare, and requiring that states accepting such funds comply with the conditions on their use," Roberts wrote. "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."
In his dissent, Justice Anthony Kennedy said he would strike down the entire law.
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