Obama's healthcare reforms approved

Barack Obama's controversial reform of America's health care system was approved by the US Supreme Court on Thursday, cementing the central legislative pillar of his first term while enraging those seeking to oust him from the White House.

In its most significant ruling for 12 years, the court said that the US federal government was entitled, under its power to raise taxes, to force all Americans to buy private health insurance or face fines.

Delivering an opinion that sought to avoid the divisive politics surrounding the law, the court's majority said: "It is not our job to protect the people from the consequences of their political choices."

The endorsement of "Obamacare" boosted morale among the President and his allies following months of speculation that the law would be struck down. Speaking at the White House, a restrained Obama claimed he had taken a political hit to do the right thing for America.

"Whatever the politics, today's decision was a victory for people all over this country, whose lives will be more secure," said Obama. "The highest court in the land has now spoken. We will continue to implement this law."

However, any boost to the President's re-election prospects looked likely to be matched by a redoubling of Republican efforts to unseat him after a failure to destroy his signature achievement.

Mitt Romney, the Republican presidential nominee, immediately pledged to "repeal and replace" Obama's reforms and "defeat the liberal agenda".

"What the Court did not do on its last day in session, I will do on my first day in office as President of the United States - I will act to repeal Obamacare," he said. "If we want to get rid of Obamacare, we're going to have to replace President Obama."

The ruling was the culmination of a legal battle started by 28 Republican-controlled states, which sued the Obama administration after the March 2010 passage of the law, the Patient Protection and Affordable Care Act. They said its "mandate" was unconstitutional, because the government had no right to force people to buy goods and services such as health insurance.

Most of the law is due to come into force in 2014. By compelling the young and healthy into the insurance market, it aims to reduce premiums for all and subsidise coverage for the poorest. It bans insurance firms from turning away new customers with existing health problems.

A recent Rasmussen poll found that 54% of American voters favoured its repeal, compared to 39% who wanted it to remain.

The conservative-leaning Court's 5-4 ruling came as a surprise due to the sceptical tone taken in March by several of its nine justices, who have delivered pro-business rulings that have trimmed the scope of the US government.

Even more surprising was that the four liberal justices were joined in their approval of the reform by Chief Justice John Roberts, a conservative judge who was appointed by George W Bush. Justice Anthony Kennedy, a moderate and frequently the swing vote, voted to scrap the law.

Despite their victory, the Obama administration's central argument in support of the law was rejected. Obama said the reform was sanctioned under the US Constitution's "Commerce Clause", which allows the government to regulate trade between the states.

The court said this was not so. But it said the law could survive because its threat to impose fines - of $695 (pounds 448) or 2.5% of household income, whichever is greater - on those who refuse to buy insurance meant it was effectively a tax.

"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. Such legislation is within Congress's power to tax," wrote Justice Roberts.

Republicans used this unexpected decision to argue Obama had increased taxes on struggling Americans, a potentially potent new line of attack.

Yesterday the President noted it was ironically Romney who was the first US politician to introduce a mandate in overhauling Massachusetts's health system as governor in 2006. Romney claims he never believed it was suitable for the entire country, despite clear statements to the contrary at the time.