Supreme Court Upholds Health Care Law 5-4, Calling Individual Mandate a Tax

WASHINGTON, June 28 - The Supreme Court on Thursday upheld most of President Obama's health care law, ruling 5-4 that the requirement for nearly every American to carry health insurance is allowed because it works as a tax.

Chief Justice John Roberts wrote the controlling opinion. He was joined by Justices Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan.

Roberts and the four more liberal justices did not agree on why. Roberts wrote that the Commerce Clause, which Congress had cited for the mandate, does not cover it. The clause, he wrote, "authorizes Congress to regulate interstate commerce, not to order individuals to engage in it." But he and the other four found that Congress can reach the same result through its power to tax. The penalty for going without insurance is collected by the Internal Revenue Service and based on income.

Justices Antonin Scalia, Anthony Kennedy, Clarence Thomas and Samuel Alito said they would have struck down the entire law. Their joint dissent argued the majority had gone too far, writing that "in the name of restraint, it overreaches."

The ruling also covered the law's Medicaid expansion. Seven justices found that the threat to cut off all of a state's Medicaid money for refusing to expand the program was too coercive. The expansion itself was left standing for states that take part.

The decision came with confusion. At 10:08 a.m. Eastern, minutes after Roberts began announcing the judgment, CNN sent a breaking alert saying the court had "struck down the individual mandate for health care." A Fox News ticker said the court had found the mandate unconstitutional. Both appear to have read Roberts's early remarks on the Commerce Clause as the final word. At 10:21, CNN corrected itself on Twitter, saying the court backs all parts of the law. Fox changed its headline to say the court had upheld parts and invalidated parts.

Why it matters: The mandate is the part of the law meant to help pay for rules that bar insurers from denying coverage or charging more over pre-existing conditions. The law aims to extend coverage to about 32 million more Americans. The ruling is a major election-year win for Obama, and Republicans and other critics are expected to keep working to limit or repeal the law.

Questions remain about how the changes will be paid for and whether they will lower costs. States now have to decide whether to expand Medicaid.