In a landmark decision, the Supreme Court of the United States has upheld the individual mandate provisions of the Patient Protection and Affordable Care Act ("Affordable Care Act"). As a result, the individual mandate and other sweeping health care reform provisions that were passed in March 2010 will remain in effect, at least for the time being. The Supreme Court decision does, however, limit the federal government's power to terminate state Medicaid funds.

Impact of Decision

The Supreme Court's 5-4 ruling is expected to have far-reaching political, economic and legal implications for years to come. It is also expected to have a significant impact on many individuals, employers, insurers, health care providers and states. Here are some highlights of the decision's impact:

  • Individuals - Beginning in 2014, most individuals will be required to obtain health insurance coverage or pay a penalty.
  • Employers - Beginning in 2014, many employers will be required to offer minimum essential health benefits to employees or pay a penalty. Employers are also subject to other new coverage, reporting and disclosure and other provisions that have taken effect or will take effect in the near future.
  • Insurers - Insurers will continue to be prohibited from discriminating or charging different premiums on the basis of health status or imposing lifetime coverage limits or preexisting condition limitations. Insurers will be required to continue to provide preventive care without co-payment.
  • Health Care Providers - Health care providers will continue to prepare for the increased number of patients that may become insured as a result of the new law.
  • States - States will be required to establish health care exchanges to provide coverage to the uninsured.

Although the Supreme Court has upheld the individual mandate provisions of the Affordable Care Act, other provisions of the law remain subject to potential challenge or repeal on other grounds. Litigation over the health care reform law is likely to continue. Moreover, depending upon the outcome of this year's presidential election, the law could be repealed or replaced. The fate of health care reform remains uncertain. We will follow up shortly with an in-depth analysis of this landmark Supreme Court decision.