(Adds Obama, Romney comments, details, stocks)
* Insurance coverage requirement upheld by taxing power
* Romney vows to repeal Obama healthcare law
* Chief Justice Roberts joined four liberals in ruling
* Obama calls ruling a victory to American people
By James Vicini and Jonathan Stempel
WASHINGTON, June 28 The U.S. Supreme Court
upheld President Barack Obama's healthcare law on Thursday in an
election-year triumph for him and fellow Democrats and a
stinging setback for Republican opponents of the most sweeping
overhaul of the unwieldy U.S. healthcare system in about a half
In a 5-4 ruling based on the power of Congress to impose
taxes, the court preserved the law's "individual mandate"
requiring that most Americans obtain health insurance by 2014 or
pay a tax.
Opponents of the law had argued the mandate was an overreach
by the federal government into the private lives of citizens.
The court was deeply divided on this issue, but the majority
ruled that Congress' taxing power was more important.
The law's "requirement that certain individuals pay a
financial penalty for not obtaining health insurance may
reasonably be characterized as a tax," Chief Justice John
Roberts wrote for the court's majority.
"Because the Constitution permits such a tax, it is not our
role to forbid it, or to pass upon its wisdom or fairness,"
wrote Roberts, who was joined by the four most liberal members -
Justices Ruth Bader Ginsburg, Stephen Breyer, Elena Kagan and
Sonia Sotomayor - in upholding the law's key provision.
The four dissenters, all from the court's conservative wing,
were Justices Antonin Scalia, Anthony Kennedy, Clarence Thomas
and Samuel Alito. They would have struck down the entire law.
Obama said the ruling was a victory for the American people,
and promised to implement it and improve upon it going forward.
"The highest court in the land has now spoken. We will
continue to implement this law and we'll work together to
improve on it where we can," Obama said at the White House.
"What we won't do - what the country can't afford to do - is
re-fight the political battles of two years ago or go back to
the way things were. With today's announcement, it's time for us
to move forward."
In another part of the decision, the court said Congress
went too far in a part of the law that requires states to expand
the government's Medicaid health insurance program for the poor
in order to extend coverage to many uninsured people.
The court said this problem was addressed by precluding the
federal government from withdrawing existing Medicaid funds from
states that do not comply with the expansion, but that this did
not require striking down other parts of the law.
The healthcare law, known formally as the Patient Protection
and Affordable Care Act, is the biggest overhaul of the $2.6
trillion healthcare system since the 1960s. It was signed by
Obama in March 2010 and immediately put to the test in the
courts by 26 of the 50 states and a trade group for small
The court's decision largely vindicates a sweeping attempt
to fix a system that, while representing nearly 18 percent of
the economy, leaves 16 percent of Americans uninsured, a failure
that sets the United States apart in the industrialized world.
The U.S. system, unlike other rich countries, is a patchwork
of private insurance and restrictive government programs. The
United States pays more for healthcare than any other country
but tens of millions of people remain with no insurance at all.
The court's ruling could figure prominently in the run-up to
the Nov. 6 election. Obama, seeking a second four-year term, is
being challenged by Republican Mitt Romney, who had called for
scrapping the law and replacing it with other measures even
though he championed a similar approach at the state level as
The ruling produced a day of drama at the Supreme Court, as
the justices read various parts of the opinions from the bench
on the last day of the court's term.
Roberts concluded his 59-page opinion by writing: "The
Framers (of the U.S. Constitution) created a federal government
of limited powers and assigned to this court the duty of
enforcing those limits.
"The court does so today. But the court does not express any
opinion on the wisdom of the Affordable Care Act. Under the
Constitution, that judgment is reserved to the people," he said.
The Obama overhaul is designed to bring health insurance to
more than 30 million previously uninsured Americans and to slow
down soaring medical costs.
Romney and other Republicans had hoped the Supreme Court
would gut a law they deride as "Obamacare." Deprived of that,
they can now continue pressing the attack on Obama on the
campaign trail, but their hopes for a rollback or repeal will
hang on legislation, unlikely before the elections, and on the
voting public, whose views are muddled.
Romney said after the ruling that the American people must
defeat Obama in the election in order to overturn the law.
"This is a time of choice for the American people. If we're
going get rid of 'Obamacare' we're going to have to replace
President Obama. My mission is to make sure we do exactly that,"
said Romney, speaking with the U.S. Capitol as a backdrop.
About 56 percent of Americans said they opposed the law in a
Reuters/Ipsos poll released on Sunday. When asked about its
individual provisions, however, most respondents said they
strongly supported them, except for the individual mandate,
which was opposed by 61 percent of those surveyed.
Most respondents in the survey favored banning insurers from
denying coverage to people with pre-existing conditions; letting
children stay on their parents' insurance plans until age 26;
and making companies with more than 50 workers offer insurance
to their employees. All are parts of the law.
So are the creation of state-based exchanges to offer health
insurance; insurance premium assistance to poor people; and
insurance tax credits for those just above the poverty line.
U.S. House of Representatives Speaker John Boehner,
immediately following the court decision, renewed his vow to try
to repeal the healthcare law.
"Today's ruling underscores the urgency of repealing this
harmful law in its entirety," Boehner said in a statement.
His Republican-led House may vote to repeal the law, but
Obama's fellow Democrats in the Senate likely would block that.
Democrats hailed the court ruling as vindication for a
longtime healthcare reform champion, the late Senator Ted
Kennedy. House Democratic leader Nancy Pelosi said she called
his widow Vicki Kennedy to say: "Now, Teddy can rest."
Shares of hospital chains jumped, while large health insurer
stocks fell after the ruling. Widening the pool of paying
patients stands to benefit hospital companies, which are often
left to cover the high medical bills of the sick who have no
Shares of HCA Holdings Inc and Community Health
Systems Inc, the two largest hospital companies, each
rose sharply. HCA was up 8.8 percent at $28.95 and Community
Health Systems was up 9.3 percent $27.87 around midday.
Shares of large, diversified health insurers such as Aetna
Inc and WellPoint Inc were off about 4 percent
and 6 percent, respectively. Investors might have viewed
overturning the law as a better outcome for the companies,
Goldman Sachs analysts said, leading to the selling pressure.
(Addititonal reporting by David Morgan, Joan Biskupic; Writing
by Kevin Drawbaugh; Editing by Howard Goller and Will Dunham)