In a stunning, historic ruling expected to create the largest overhaul of American health care in decades, the U.S. Supreme Court today ruled constitutional President Barack Obama's landmark health reform law that requires most Americans to have health insurance beginning in 2014 or pay a penalty.
The 5-4 ruling gave Obama an election-year victory but surprised even many proponents of the two-year-old Affordable Care Act. It sets up a blazing duel in the fall presidential elections between the president and Republican contender Mitt Romney over health care changes.
In reaching the decision, the court ruled that the controversial insurance requirement is constitutional under Congress' power to tax. It also let stand a major expansion of the Medicaid program, though the court said the federal government could not penalize states that chose not to expand by withhold existing Medicaid funds from those states. The extension could add a half-million uninsured people in Michigan who might meet expanded eligibility criteria.
Chief Justice John Roberts, considered a conservative member of the court, sided with the court's more liberal justices, Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan. Justices Antonin Scalia, Anthony Kennedy, Clarence Thomas and Samuel Alito dissented -- as did conservative groups across the nation.
"The values that should have determined our course today are caution, minimalism, and the understanding that the federal government is one of limited powers," the dissenting justices wrote. "But the court's ruling undermines those values at every turn. In the name of restraint, it overreaches. In the name of constitutional avoidance, it creates new constitutional questions. In the name of cooperative federalism, it undermines state sovereignty."
From the White House, Obama said with the court's decision in hand, "it's time for us to move forward -- to implement and, where necessary, improve on this law."
Michigan, which challenged the law and declined to accept $10 million in federal funds to implement a key piece of the legislation while waiting for the decision, now has to scramble to meet the law's deadlines. The biggest comes January 1, 2013, when states must have set up the initial framework for health insurance exchanges where consumers and small businesses could purchase insurance, beginning in 2014.
In a statement, Michigan Gov. Rick Snyder said the law "misses the point on the most important reforms needed in our health care system." Without more cost controls, the nation's and the state's economic recovery is in jeopardy, he said.
Snyder's statement did not precisely address whether Michigan may need to ask the federal government to help Michigan run the exchange, but he has indicated he prefers to have Michigan run one.
"While I may not agree with everything in the law, now that the Supreme Court has essentially upheld the act, we must act quickly to avoid an undue burden on Michigan residents and job providers," he said.
"Implementing this law will require an immense amount of coordination between the public and private sectors," Snyder's statement said. "We plan on working closely with Michigan consumers, businesses and health providers to ensure that the decisions we make have as much of a positive impact on Michigan as possible."
Michigan has received $999,772 to start the exchange but the Legislature last year decided not to accept nearly $10 million in federal funds awarded to the state for further work. Legislators said they preferred to wait for the Supreme Court ruling.
Michigan is unlikely to meet a deadline today to apply for money for the exchanges but new grant opportunities will be announced soon, according to a spokesman for the U.S. Department of Health and Human Services.
Both Marianne Udow-Phillips, director of the Center for Healthcare Research & Transformation and one of Michigan's leading health policy specialists, and Kirk Roy, who oversees implementation of the law for Blue Cross Blue Shield of Michigan, said Michigan risks having the federal government run an exchange for it if the state doesn't move quickly to implement the law.
Opponents, such as Michigan Attorney General Bill Schuette, one of 26 state attorneys' general who sued to overturn the law, said he and his counterparts will review the decision to determine what actions may be necessary, if any, to comply. He said he was disappointed in the ruling and "extremely concerned as well about the impact of the decision on the personal liberties and basic constitutional rights of Americans."
Proponents and opponents agree on one fact: The Affordable Care Act is the biggest overhaul of America's health care and insurance industries since 1965, when the Medicare and Medicaid public insurance programs were created.
In Michigan, the ruling means that as many as 900,000 of the state's 1.1 million uninsured people will have insurance starting in 2014, when the law's major benefits begin.
About half of those would gain Medicaid coverage; the rest could buy insurance on their own through the statewide exchange.
In Detroit alone, some 100,000 people are expected to be eligible for Medicaid under expanded eligibility rules the law provides, according to Mike Duggan, CEO of the Detroit Medical Center.
Early today, Duggan announced plans for DMC buy its own Medicaid HMO plan in anticipation of expanding coverage to low-income Detroiters. "Americans love a winner," said Duggan, who believes the verdict will boost Obama's election chances. Others say it will be a boon for Republican presidential contender Mitt Romney, who said he'd work to scrap the law if he is elected.
The ruling upholds a law that the Obama administration says is designed to end inequities in America's health insurance system, such as policies through which people with pre-existing conditions could be rejected by most insurers. It also aims to make health insurance more affordable and attainable through expansion of Medicaid or subsidies to help lower-earning families get help to buy insurance.
Michigan is expected to add as many as a half-million people in Medicaid through expanded eligibility criteria that will cover people who earn up to 133% of the federal poverty level, or $10,890 for a single adult or $22,350 for a family of four, for example. Many will be working, low-income adults without children -- those who are traditionally cut out of Medicaid.
While states and the federal government share costs for Medicaid now, more of the cost will be picked up by the federal government -- 90% of the costs by 2020 for new enrollees after 2014.
Sharon Donovan, 53, of Ann Arbor, looks forward to finally being able to buy insurance in 2014.
She is a self-employed jewelry artist who has been uninsured for 30 years. She usually delays her care until it's so bad she needs attention because she can't afford to pay for it. Earlier this summer, one of the fingers on her hand became so painful that she went twice to the doctor for steroid injections, for a total $270 bill, she said. She had just paid off a dental debt from extensive dental work she needed a couple years ago, problems aggravated by not going regularly.
Besides the cost of insurance, Donovan said she hasn't purchased coverage because "if I paid for insurance it might not cover" many services she needs, such as eye and dental care.
"This has been so politicized," she said of the Affordable Care Act.
"It's incredible that in one of the wealthiest countries in the world, people die for lack of medical care in the United States," she said.
Scott Hagerstrom, state director of the Americans For Prosperity Michigan, which vehemently opposed the health care reform law, predicted future challenges to the law.
"This doesn't improve the system at all," Hagerstrom said after today's ruling. "This is a massive new tax on the middle class. This is not the way forward."
He said the fight now returns to the political realm and this fall's elections: "There is another court here and that's the court of the public opinion. That court is opposed to this law."
Hagerstrom's organization and others already are planning meetings with lawmakers -- both state and federal.
"It's going to be full court press in defending the liberty and freedoms for all Americans and keeping taxes down for all Americans. We will do everything we can do get this repealed."
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