Like many of you this morning, I was anxiously awaiting word on the Supreme Court’s decision on the health care reform law. Health care reform has always been a waiting game and today we finally got some answers on the future of the health care system. These big questions have been looming for over two years, since the day the law was passed.

If you’re interested in reading 193 pages of complex legal analysis, you can dig into the Court’s opinion for yourself. However, this opinion is so complicated that at least one major news source got it wrong the first time around. So here is a plain English version of what the Court decided:

Individual mandate upheld

The Affordable Care Act, including the individual mandate, is constitutional and is upheld. The law’s individual mandate has been the main focus of legal challenges to the law. This provision requires that individuals purchase health insurance by 2014 or pay a penalty.

Decision-making process

The Court voted 5-4 that Congress had the authority to pass the individual mandate under its taxing power. The Court rejected the government’s arguments that Congress had the power to pass the mandate under the Constitution’s Commerce Clause and the Necessary and Proper Clause. However, that doesn’t matter. Congress only needed one justification for enacting the mandate and they got it with the taxing power.

The decision was as close as it gets. As expected, the Court’s four Democratic appointees voted to uphold the law. One of the wild cards, Chief Justice John Roberts, sided with the majority and also authored the official opinion of the Court. In his opinion, the Chief Justice emphasized the Court’s role, stating “We do not consider whether the Act embodies sound policies. That judgment is entrusted to the Nation’s elected leaders. We ask only whether Congress has the power under the Constitution to enact the challenged provisions.”

Justice Anthony Kennedy was another question mark. He joined the three more conservative members of the Court in disagreeing with the majority opinion. These justices viewed the law as “invalid in its entirety” and would have struck down the whole thing.

Implications to the health care reform law

Because the individual mandate is constitutional, the Court did not have to decide whether to strike down any other part of the law. So, the whole law stands and no portion of the law is struck down. This means that all provisions will take effect as scheduled and all provisions that are already effective will continue, unless Congress decides otherwise at some future date. One exception is an adjustment to how the law’s expanded Medicaid provision can be applied to the states.

What this means to us

So what happens next? We could fill volumes with what the effect of the decision and the law will be, and we will continue to analyze the Court’s opinion, but here are some immediate thoughts on how the decision affects different groups:

• Individuals: Most people in the U.S. will be subject to the individual mandate beginning in 2014. This means they will have to make a choice: get coverage or pay a penalty. Today, the court confirmed that it’s up to the individual to decide, saying that “Those subject to the individual mandate may lawfully forgo health insurance and pay higher taxes, or buy health insurance and pay lower taxes. The only thing that they may not lawfully do is not buy health insurance and not pay the resulting tax.”
• Employers: Employers must continue to comply with the parts of the health care reform law that apply to them and their health plans. This means that all of the insurance policy reforms due to health care reform will continue and employers will need to keep moving forward to implement upcoming changes.
• Brokers: I’ve heard from many brokers who are unhappy about the health care reform law and its potential impact on their business. It’s undeniable that the changes will affect everyone involved in the delivery of and payment for health care. However, your clients are dealing with uncertainty too and are going to continue to need expert guidance more than ever as we move forward.
• Voters: Health care reform will continue to be a key issue as we move toward the election in November. The Obama Administration gets to claim a big victory with its signature achievement upheld by the Court. However, the Court also labeled a big part of the law a tax, which may not go over well with voters. Also, while the law has its supporters, it is unpopular with others and Mitt Romney has seized on that. According to his campaign spokeswoman, he raised $300,000 in the first hour after the ruling was handed down. Republicans in Congress have also promised to continue attempts to repeal the law.

We will continue to assess the Court’s opinion and the impact it may have on our Partners and their clients. Broker Briefcase users should look at our document “Supreme Court Upholds Health Care Reform Law “ for information to provide to your clients. We will also monitor any Congressional activity related to health care reform in the event that either the election or future proposals change the health care game again.