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SCOTUS Rules Federal Health Reform Constitutional

Todd Wiseman / Eddie Codel, Texas Tribune

The Patient Protection and Affordable Care Act, President Obama’s signature health care legislation, is constitutional — including the individual mandate that forces Americans to carry health insurance, the U.S. Supreme Court ruled Thursday.

The decision has far-reaching implications for Texas, where leaders have ardently opposed “Obamacare” even though the state has the country’s highest percent of uninsured residents. In addition to requiring all citizens to purchase health insurance, the law dramatically expands Medicaid, which already makes up close to a quarter of Texas’ state budget.

The Supreme Court ruled 5-4 to uphold the individual mandate, saying it is constitutional under the federal government's taxing power: The only effect of not carrying insurance is paying a tax. The court also held that the Medicaid expansion is constitutional, but that the federal government may not withhold Medicaid funds from states that fail to comply with the expansion. (Read the ruling here.)

In Texas, Medicaid, the state health plan for the disabled and very poor, mostly covers children. Under federal health reform, the program will expand to cover many poor adults, like the parents of children already covered. The Texas Health and Human Services Commission has not yet begun working to enact the Medicaid expansion, and will need guidance from the federal government to do so, agency spokeswoman Stephanie Goodman has said.

The law also requires states to set up health insurance exchanges — marketplaces for consumers to shop for the best deal on health plans. The federal government will establish them for states that don’t do it themselves. Texas, which was one of 26 states to join the lawsuit against federal health reform, has not yet established an exchange, but officials have said the state is in a position to do it quickly.

The Affordable Care Act will eventually cost Texas big money — especially once the state starts footing the bill for part of the Medicaid expansion. But it has also already resulted in increased funding for the state. The Health Care Innovation Awards, which have granted more than $40 million to Texas-based health care projects, were funded under the law. Earlier this month, the U.S. Department Health and Human Services awarded about $5.3 million to health centers in Texas under the act.

But don’t expect the court’s decision to mean the end of health reform debate. Texas Attorney General Greg Abbott has said he expects new lawsuits at the state and federal level challenging the law’s other components.