By RAJU CHEBIUM
Gannett Washington Bureau
WASHINGTON - South Carolina and 25 other states that sued to overturn the Democratic health care reform effort lost their bid Thursday as the U.S. Supreme Court ruled that the law is Constitutional.
In a 5-4 decision, the court upheld the most controversial provision - which sparked the states' lawsuit - that requires everyone to carry insurance or pay fines starting in 2014.
That provision is critical to the Obama administration's effort to cover some 30 million uninsured people, including more than 500,000 in South Carolina.
The administration had argued that the so-called "individual mandate" was constitutional under the interstate commerce clause.
Though Chief Justice John Roberts, who cast the deciding fifth vote, rejected that argument, he wrote the mandate is constitutional under Congress' taxing authority.
"The Commerce Clause does not give Congress that power," Roberts wrote in the majority opinion. "It is therefore necessary to turn to the government's alternative argument: that the mandate may be upheld as within Congress' power to 'lay and collect taxes.'"
Voting to uphold the law were Roberts and the four liberal justices - Ruth Bader Ginsburg, Sonia Sotomayor, Stephen Breyer and Elena Kagan. Roberts, a conservative appointed by President George W. Bush, usually votes with the conservatives.
Voting no were Justices Anthony Kennedy, Clarence Thomas, Samuel Alito and Antonin Scalia.
"The act before us here exceeds federal power both in mandating the purchase of health insurance and in denying non-consenting states all Medicaid funding," the dissenting justices wrote.
The court said that the federal government can't withhold Medicaid money from states if states refuse to take part in expanding coverage. The Democratic law relies heavily on Medicaid expansion to cover tens of millions of additional people.
About 1 million South Carolinians use the state's Medicaid program. The federal government would cover the costs of covering all additional enrollees between 2014 and 2020. The federal share would drop to 90 percent by 2020 and remain at that level.
It's unclear where the money would come from. Republicans argue that massive tax increases will be necessary.
South Carolina GOP lawmakers focused on the court's finding that the individual mandate amounts to a tax.
"During the entire congressional debate over Obamacare, Democrats vehemently denied this was a tax on the American people. The Obama Administration also denied it was a tax. However, when the case went to Court, they argued, for constitutional purposes, it was a tax," Sen. Lindsey Graham, R-S.C., said in a statement. "To our Democratic colleagues, stand by your tax increase or stand with us to repeal and replace Obamacare."
Rep. Trey Gowdy, R-Spartanburg, wondered rhetorically what else the government could require Americans to do and call it a tax.
"Our forefathers would not recognize the modern day interpretation of the document they wrote and ratified," Gowdy said in a statement. "The president said this wasn't a 'tax' and the Supreme Court bailed him out by re-interpreting his argument as a 'tax' rather than as a mandate and an expansion of the commerce clause."