In a dramatic victory for President Barack Obama, the Supreme Court upheld the 2010 health care law Thursday, preserving Obama's landmark legislative achievement.
The majority opinion was written by Chief Justice John Roberts, who held that the law was a valid exercise of Congress's power to tax.
Roberts re-framed the debate over health care as a debate over increasing taxes. Congress, he said, is "increasing taxes" on those who choose to go uninsured.
Click here for the text of the ruling
The 2010 law, the Affordable Care Act, requires non-exempted individuals to maintain a minimum level of health insurance or pay a tax penalty.
The essence of Roberts's ruling was:
- "The Affordable Care Act is constitutional in part and unconstitutional in part," Roberts wrote.
- "The individual mandate cannot be upheld as an exercise of Congress's power under the Commerce Clause. That Clause authorizes Congress to regulate interstate commerce, not to order individuals to engage in it."
- But "it is reasonable to construe what Congress has done as increasing taxes on those who have a certain amount of income, but (who) choose to go without health insurance. Such legislation is within Congress's power to tax."
The law, Roberts wrote, "makes going without insurance just another thing the Government taxes, like buying gasoline or earning income. And if the mandate is in effect just a tax hike on certain taxpayers who do not have health insurance, it may be within Congress's constitutional power to tax."
He said the Supreme Court precedent is that "every reasonable construction" of a law passed by Congress "must be resorted to, in order to save a statute from unconstitutionality."
Veteran Supreme Court lawyer Tom Goldstein told NBC's Pete Williams that "the Affordable Care Act was saved by Chief Justice John Roberts."
When he served in the Senate in 2005, Obama voted against confirming Roberts as chief justice, arguing that he lacked empathy for underdogs and "he has far more often used his formidable skills on behalf of the strong in opposition to the weak."
(Twenty-one other Democratic senators, including Joe Biden, also voted against confirming Roberts. Twenty-two Democratic senators voted to confirm him.)
Obama hailed his victory: "The highest court in the land has now spoken. We will continue to implement this law and we'll work together to improve on it where we can."
But he urged Americans to refrain from re-fighting "the political battles of two years ago" or trying to "go back to the way things were."
The four justices joining Roberts in upholding the law were Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan.
The dissenting justices were Justices Antonin Scalia, Anthony Kennedy, Clarence Thomas and Samuel Alito.
For individuals who choose to not comply with the individual insurance mandate, Congress deliberately chose to make the penalty fairly weak: only $95 for 2014; $325 for 2015; and $695 in 2016.
After 2016, that $695 amount is indexed to the consumer price index.
Congress specifically did not allow the use of liens and seizures of property as methods of enforcing the penalty.
Non-compliance with the mandate is also not subject to criminal or civil penalties under the Tax Code and interest does not accrue for failure to pay the penalty in a timely manner, according to the congressional Joint Committee on Taxation.
In his reaction to the court's decision, Republican presidential contender Mitt Romney said, "What the court did today was say that Obamacare does not violate the Constitution. What they did not do was say that Obamacare is good law or that it's good policy."
He said the ruling had made it clear "If we want to get rid of Obamacare, we're going to have replace President Obama."
But in a major victory for the states who challenged the law, the court said that the Obama administration cannot coerce states to go along with the Medicaid insurance program for low-income people.
The financial pressure which the federal government puts on the states in the expansion of Medicaid "is a gun to the head," Roberts wrote.
"A State that opts out of the Affordable Care Act's expansion in health care coverage thus stands to lose not merely 'a relatively small percentage' of its existing Medicaid funding, but all of it," Roberts said.
Congress cannot "penalize States that choose not to participate in that new program by taking away their existing Medicaid funding," Roberts said.
The Medicaid provision is projected to add nearly 30 million more people to the insurance program for low-income Americans -- but the court's decision left states free to opt out of the expansion if they choose.