The Supreme Court, in a landmark ruling Thursday, upheld President Obama’s health care overhaul, including the controversial requirement that all Americans have health insurance.
The court on Thursday handed Obama a campaign-season victory in rejecting arguments that Congress went too far in requiring most Americans to have health insurance or pay a penalty.
Chief Justice John Roberts announced the court’s judgment that allows the law to go forward with its aim of covering more than 30 million uninsured Americans.
The court, however, found problems with the law’s expansion of Medicaid, but even there said the expansion could proceed as long as the federal government does not threaten to withhold states’ entire Medicaid allotment if they don’t take part in the law’s extension.
The court’s four liberal justices, Stephen Breyer, Ruth Bader Ginsburg, Elena Kagan and Sonia Sotomayor, joined Roberts in the outcome. Justices Samuel Alito, Anthony Kennedy, Antonin Scalia and Clarence Thomas dissented.
Stocks of hospital companies moved sharply higher on the decision, including HCA Holdings [HCA 28.48 1.87 (+7.03%) ] and Community Health Systems [CYH 27.39 1.90 (+7.45%) ].
Stocks of drug companies and medical device makers are slightly lower for the day as analysts sort through the Supreme Court’s ruling. Stocks of the biggest insurance companies are also lower.
“This gives us clarity, which is what markets needed,” said Todd Schoenberger, Managing Principal At The Blackbay Group In New York. “This resolved the uncertainty about healthcare.”
“However,” he added, “with that said, there seems to be some confusion on the ruling. I’m getting word that the mandate is looking like a tax, and if that is the case, that could hurt the economy and that won’t help at all. Who knows how this impacts the election?”
The markets overall were sharply lower, amid skepticism that European leaders would be able to form a solution to tackle the ongoing debt crisis.
The ruling on Obama’s sweeping federal health care law will shape the contours of the presidential campaign through the summer and fall. Both Obama and Republican rival Mitt Romney are primed to use the outcome for political gain.
Before the decision, Obama has expressed confidence the court will uphold his signature legislative initiative.
Obama recently avoided mentioning the impending court ruling directly, but he has vigorously defended the health-care overhaul as critical to the public’s health and well-being in campaign events this week.
“I think it was the right thing to do. I know it was the right thing to do,” he told supporters in Boston.