The Supreme Court has ruled that the mandate that all Americans purchase health insurance is constitutional because it is a kind of tax that Congress has the right to levy. The justices rejected the idea that it falls under the power of Congress to regulate commerce between the states.
If everyone has to purchase health insurance or pay a penalty (what the court deemed a tax), an estimated 31 million formerly uninsured people will join the ranks of the insured. This could increase imaging use nationally by 13.6%, with the largest growth likely happening in the states of Texas, New Mexico, Georgia, Nevada, and California, a Regents Health Resources report in the Radiology Business Journal predicts.
The court also ruled that it is not unconstitutional coercion for the Federal government to require the states to comply with new eligibility requirements for Medicaid or risk losing their Federal funding if the only funds they would lose were the new funds granted to expand Medicaid.
The Associated press reported that after the decision was announced, stocks of hospital companies rose sharply and insurance companies fell.
The stock of private hospital chains Hospital Corp. of America and Tenet Healthcare Corporation both jumped up more than 7 percent. Diagnostic imaging provider RadNet's stock rose more than 2.5 percent immediately after the ruling.
At the same time, the market fell overall and insurance companies in particular took a hit. After the ruling, WellPoint stock fell 6 percent, Aetna fell 3.6 percent, and UnitedHealth Group fell nearly 3 percent.
On the Supreme Court blog, the ruling was explained in plain language as follows:
The Affordable Care Act, including its individual mandate that virtually all Americans buy health insurance, is constitutional. There were not five votes to uphold it on the ground that Congress could use its power to regulate commerce between the states to require everyone to buy health insurance. However, five Justices agreed that the penalty that someone must pay if he refuses to buy insurance is a kind of tax that Congress can impose using its taxing power. That is all that matters. Because the mandate survives, the Court did not need to decide what other parts of the statute were constitutional, except for a provision that required states to comply with new eligibility requirements for Medicaid or risk losing their funding. On that question, the Court held that the provision is constitutional as long as states would only lose new funds if they didn’t comply with the new requirements, rather than all of their funding.
The ruling was tight, 5-4, with Justice John Roberts joining the court's more politically liberal members as a swing vote. Justice Anthony Kennedy joined the court's conservative majority in voting against.
The full decision is available as a PDF here.
House Majority Leader Eric Cantor (R-Va.) released a statement saying House Republicans will continue efforts to overturn the Affordable Care Act in Congress.
The American Medical Association's president, Jeremy A. Lazarus, MD, also released a statement voicing his and the AMA's support for the decision.
Meanwhile, the ACR sounded a cautious note, pointing out that although the individual mandate has been upheld, there are still other cases pending, including a challenge to the legality of the Independent Payment Advisory Board (IPAB) in the U.S. District Court for the District of Arizona.
"ACR will continue to monitor PPACA implementation efforts, as well as subsequent legislative developments that are likely to follow the Supreme Court’s ruling," it noted in its statement.