Supreme Court Upholds Obamacare 5-4

WASHINGTON (CNN) -- The U.S. Supreme Court on Thursday upheld the controversial health care law championed by President Barack Obama in a landmark decision that will impact the November election and the lives of every American.

In a 5-4 ruling, the high court decided the individual mandate requiring people to have health insurance is valid as a tax, even though it is impermissible under the Constitution's commerce clause.

"In this case, however, it is reasonable to construe what Congress has done as increasing taxes on those who have a certain amount of income, but choose to go without health insurance," Chief Justice John Roberts wrote in the majority opinion. "Such legislation is within Congress's power to tax."

The importance of the decision cannot be overstated: It will have an immediate and long-term impact on all Americans, both in how they get medicine and health care, and also in vast, yet-unknown areas of "commerce."

The most anticipated Supreme Court ruling in years allows the government to continue implementing the health care law, which doesn't take full effect until 2014.

That means popular provisions that prohibit insurers from denying coverage for pre-existing conditions and allow parents to keep their children on family policies to the age of 26 will continue.

The opinion was a victory for Obama but also will serve as a rallying issue for Republicans calling for repeal of the Affordable Care Act .

Roberts joined the high court's liberal wing -- Justices Stephen Breyer, Ruth Bader Ginsburg, Sonia Sotomayor and Elena Kagan -- in upholding the law. Four conservative justices -- Samuel Alito, Antonin Scalia, Anthony Kennedy and Clarence Thomas -- dissented.

The polarizing law, dubbed "Obamacare" by many, is the signature legislation of Obama's time in office.

It helped spur the creation of the conservative tea party movement and will be a centerpiece of the presidential election campaign.

Roberts appeared to note the political divisions of the health care law, writing that "we do not consider whether the act embodies sound policies."

"That judgment is entrusted to the nation's elected leaders," the opinion said. "We ask only whether Congress has the power under the Constitution to enact the challenged provisions."

The narrow focus of the ruling on key issues such as the individual mandate -- limiting it to taxing powers rather than general commerce -- represented the court's effort to limit the government's authority.

"The framers created a federal government of limited powers and assigned to this court the duty of enforcing those limits," Roberts wrote. "The court does so today."

On the individual mandate, the opinion said that "the Affordable Care Act's requirement that certain individual's pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax."

"Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness," Roberts wrote.

Both Obama and his presumptive Republican challenger, Mitt Romney, have been firing up supporters this week by staking out their positions.

Speaking to supporters in Atlanta on Tuesday, Obama defended his health care law as the way forward for the American people.

"They understand we don't need to refight this battle over health care," he said. "It's the right thing to do that we've got 3 million young people who are on their parent's health insurance plans that didn't have it before. It's the right thing to do to give seniors discounts on their prescription drugs. It's the right thing to do to give 30 million Americans health insurance that didn't have it before."

Romney told supporters in Virginia the same day: "If Obamacare is not deemed constitutional, then the first three and a half years of this president's term will have been wasted on something that has not helped the American people."

Romney, whose opposition to the law has been a rallying cry on the stump, continued: "If it is deemed to stand, then I'll tell you one thing. Then we'll have to have a president -- and I'm that one -- that's gonna get rid of Obamacare. We're gonna stop it on day one."

According to a poll released Tuesday, 37% of Americans said they would be pleased if the health care law were deemed unconstitutional by the Supreme Court.

Twenty-eight percent said they would be pleased if the Affordable Care Act were ruled constitutional, the NBC News/Wall Street Journal survey showed, compared with 35% who said they would be disappointed if the court came back with that outcome.

But nearly four in 10 Americans surveyed said they would have "mixed feelings" if the justices struck down the whole law. The survey of 1,000 adults was conducted June 20-24.

Previous surveys have indicated that some who oppose the law do so because they think it doesn't go far enough.

The Supreme Court heard three days of politically charged hearings in March on the law formally known as the Patient Protection and Affordable Care Act. The landmark but controversial measure was passed by congressional Democrats despite pitched Republican opposition.

The challenge focused primarily on the law's requirement that most Americans have health insurance or pay a fine.

Supporters of the plan argued the "individual mandate" is necessary for the system to work, while critics argued it is an unconstitutional intrusion on individual freedom.

Four federal appeals courts heard challenges to parts of the law before the Supreme Court ruling, and came up with three different results.

Courts in Cincinnati and Washington voted to uphold the law, while the appeals court in Atlanta struck down the individual mandate.

A fourth panel, in Richmond, Virginia, put its decision off until penalties for failing to have health insurance take effect in 2014.

The act passed Congress along strictly partisan lines in March 2010, after a lengthy and heated debate marked by intense opposition from the health insurance industry and conservative groups.

When Obama signed the legislation later that month, he called it historic and said it marked a "new season in America."

While it was not the comprehensive national health care system liberals initially sought, supporters said the law would reduce health care costs, expand coverage and protect consumers.

In place of creating a national health system, the law bans insurance companies from denying coverage to people with pre-existing conditions, bars insurers from setting a dollar limit on health coverage payouts, and requires them to cover preventative care at no additional cost to consumers.

It also requires individuals to have health insurance, either through their employers or a state-sponsored exchange, or face a fine beginning in 2014. There are, however, a number of exemptions. For instance, the penalty will be waived for people with very low incomes who are members of certain religious groups, or who face insurance premiums that would exceed 8% of family income even after including employer contributions and federal subsidies.

Supporters argued the individual mandate is critical to the success of the legislation, because it expands the pool of people paying for insurance and ensures that healthy people do not opt out of having insurance until they need it.

Critics say the provision gives the government too much power over what they say should be a personal economic decision.

Twenty-six states, led by Florida, went to court to say individuals cannot be forced to have insurance, a "product" they may neither want nor need. And they argued that if that provision is unconstitutional, the entire law must go.

The Justice Department countered that since every American will need medical care at some point in their lives, individuals do not "choose" whether to participate in the health care market.

The partisan debate around such a sweeping piece of legislation has encompassed almost every traditional hot-button topic: abortion and contraception funding, state and individual rights, federal deficits, end-of-life care, and the overall economy.

During arguments on March 27, Justice Anthony Kennedy said the law appeared to "change the relationship between the government and the individual in a profound way."

Roberts argued that "all bets are off" when it comes to federal government authority if Congress was found to have the authority to regulate health care in the name of commerce.

Liberal justices, however, argued people who don't pay into the health system by purchasing insurance make care more expensive for everyone. "It is not your free choice" to stay out of the market for life, Justice Ruth Bader Ginsburg said during arguments.

"I think the justices probably came into the argument with their minds made up. They had hundreds of briefs and months to study them," said Thomas Goldstein, publisher of SCOTUSblog.com and a prominent Washington attorney, though he conceded that "the oral arguments (in March) might have changed their minds around the margin."

The legislation signed by Obama stretched to 2,700 pages, nine major sections and some 450 provisions.

The first lawsuits challenging the health care overhaul began just hours after the president signed the measure.

CNN's Rachel Streitfeld contributed to this report.