Prior to today, the case brought by twenty-six states (including Ohio), several individuals, and the National Federation of Independent Business challenging the constitutionality of the individual mandate portion of the Patient Protection and Affordable Care Act had been decided by the Court of Appeals for the Eleventh Circuit stating that Congress lacked authority to enact the individual mandate. Based on this ruling, and a feeling that the U.S. Supreme Court would follow suit, many thought that the Act would become meaningless without this “penalty” for individuals failing to purchase health insurance. 

The Supreme Court changed all of that with one hundred plus pages of text that essentially takes a completely opposite position from the Court of Appeals. The opinion, released today, states that the individual mandate is a constitutional act of Congress when construed under Congress’s powers to lay and collect taxes, and not pursuant to the Commerce Clause (as has been the position of the President since the inception of the law). In declining to approve the individual mandate under the Commerce Clause, but approving it under the power to tax, the Court stated that “Congress already possesses exclusive power to regulate what people do.” “Upholding the Affordable Care Act under the Commerce Clause would give Congress the same license to regulate what people do not do.” The Court went on to say that despite the Act calling the payment a “penalty,” and not a “tax,” the payment was functionally a tax, which will be paid to and collect by the IRS. 

While the fallout from this decision will continue for months to come, it would appear the country should continue to prepare for implementation of those portions of the Act that become effective in 2014.