'A great victory'
"On the whole, this is a great victory," says Tim Jost, health law scholar and professor of law at Washington and Lee University. "I think this was a political case to begin with, has always been a political case, and the Supreme Court has decided this on the basis of law rather than politics, and that's a good thing for the United States."
The mandate was a focal point of the legal challenge by 26 states, the National Federation of Independent Business and several individuals that claimed the requirement to purchase insurance goes against the U.S. Constitution.
In the ruling Thursday, the court said the mandate was indeed constitutional, under Congress' authority to set taxes.
While most of the court agreed with arguments that Congress did not have the authority to require Americans to purchase health insurance under its power to regulate interstate commerce, known as the Commerce Clause, it upheld the federal government's right to impose a tax on those who fail to do so. That rendered the Commerce Clause argument moot.
The court added that individuals are free to ignore the "individual mandate" to purchase health insurance and pay the tax instead.
Medicaid provision gives some heartburn
The court also upheld the law's expansion of Medicaid to help the uninsured afford health insurance, but the justices cautioned that it would be unconstitutional for the federal government to withhold Medicaid to states that fail to abide by the expansion.
"Nothing in our opinion precludes Congress from offering funds under the ACA to expand the availability of health care, and requiring that states accepting such funds comply with the conditions on their use," Chief Justice John Roberts notes in the ruling. "What Congress is not free to do is to penalize states that choose not to participate in that new program by taking away their existing Medicaid funding."
"The biggest surprise for lawyers is probably the Medicaid provision, because I think the prevailing view was that the Medicaid expansion was clearly constitutional," says Kristin Madison, a law professor at Northeastern University.
"I find the Medicaid section a bit troubling in that they seem to be limiting the spending power of the United States. I think that is going to result in a lot of litigation in the future on all kinds of programs," he says. "But in the end, they did uphold the ability of the federal government to require (Medicaid) expansions from states that want to participate, and I would assume that there aren't too many states that are going to walk away from this much federal money and leave millions of their citizens uninsured."
Starting in 2014, states must set up marketplaces for comparing prices and buying insurance, or health exchanges, under the new law. While some states have started setting up an exchange, others waited on the Supreme Court's decision.
"It's now time for the states to move ahead with implementing the law," says Jost. "The questions are settled and we've got a lot of work to do."
Republican presidential candidate Mitt Romney and members of his party in Congress say their goal is to repeal the health care reform law.