Supreme Court Upholds ACA Coverage Mandate, Takes Narrow Interpretation of Medicaid Expansion

by Rebecca Farley on June 29, 2012

Supreme Court of the U.S.In a 5-4 ruling on Thursday, the Supreme Court voted to uphold the Affordable Care Act’s coverage mandate, with Chief Justice John Roberts joining the court’s four liberal justices in what was seen as a major victory for President Obama and congressional Democrats.

The decision came as a surprise to many court watchers, who expected that Justice Anthony Kennedy would be the swing vote in the health reform case. Instead, Kennedy sided with Justices Scalia, Alito, and Thomas in a dissenting opinion.

The majority decision of the Court held that although Congress does not have the power under the Commerce Clause of the Constitution to require individuals to purchase insurance (as the government’s lawyers had argued), the mandate is actually a type of tax. Therefore, it is constitutional under Congress’ power to tax and spend.

The Court also held that while the Medicaid expansion is constitutional, the federal government cannot penalize states who do not participate by revoking all federal funding for their existing Medicaid programs. Speaking for the majority, Chief Justice Roberts wrote that “the threatened loss of over 10 percent of a State’s overall budget … is economic dragooning that leaves the States with no real option but to acquiesce in the Medicaid expansion.” By removing the federal government’s primary mechanism for inducing participation, the decision effectively makes the Medicaid expansion optional for states, raising questions about whether some of the 26 states that sued to stop the Medicaid provisions of the law from going into effect will decline to participate.

In a statement on the Court’s decision, National Council President and CEO Linda Rosenberg wrote:

“Today, the National Council for Community Behavioral Healthcare (National Council) — the nation’s voice for mental health and addictions providers — celebrates the reassurance that 16 million Americans will be newly granted access to America’s healthcare safety net in 2014. The Supreme Court’s 5-4 ruling to uphold the Affordable Care Act of 2010 is particularly critical for people with serious, chronic conditions such as mental illnesses and addictions, many of whom are currently uninsured.

The Supreme Court decision upholds several critical ACA components, including:

  • The Medicaid expansion to up to 16 million Americans who are currently uninsured
  • The Prevention and Public Health Fund, which finances primary care and behavioral healthcare integration efforts to help improve deplorable mortality rates among Americans with behavioral health disorders and other chronic conditions
  • Access to preventive services that ward off higher healthcare costs and unnecessary suffering
  • Health exchanges
  • Essential health benefits
    • The Medicaid expansion and insurance offered through the exchanges will dramatically affect coverage for substance use disorders, enabling healthcare providers to identify and better treat drug and alcohol misuse
    • Newly insured individuals will have coverage that includes mental health and substance use treatment at parity with medical/surgical benefits

However, we are concerned with the weakening of the Medicaid expansion. This could leave 16 million vulnerable Americans without an affordable healthcare alternative and countless others without the security of coverage for their behavioral health problems. The National Council looks forward to realizing the promises in the ACA by working to ensure states optimize the Medicaid expansion, as well as by working with Congress to ward off threats to America’s health and behavioral health.”

Stay tuned to the Public Policy Update and our blog,, for further analyses about how the Court’s decision will affect individuals with mental illness and addictions and the providers who serve them.

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