The U.S. Supreme Court Thursday upheld the Affordable Care Act, saying the government can impose a penalty on people who don't buy health insurance.

The court, in a 5-4 ruling with the majority led by Chief Justice John Roberts, said that what has been called the "individual mandate" to buy insurance is not a mandate. Rather, it is a tax that people pay if they don't buy insurance.

The court also said the federal government can offer expanded Medicaid funding to states but cannot penalize them if they don't expand their Medicaid programs.

Other than the Medicaid expansion, the court upheld all aspects of the Affordable Care Act. That includes provisions that have proved popular among Americans, such as the ban on insurance companies not selling policies to people with pre-existing conditions and allowing adult children up to age 26 to stay on their parents' health plans.

On the health care insurance penalty, the court said: "Our precedent demonstrates that Congress had the power to impose the exaction ... under the taxing power, and that (the law) need not be read to do more than impose a tax. This is sufficient to sustain it."

Arizona was among the states that had challenged the law, saying among other arguments that it would impose costs on the state and its taxpayers that were beyond affordability. Opponents also argued that requiring people to buy insurance was unconstitutional.

The requirement was upheld not under the commerce clause of the constitution, which both sides had used to base their arguments, but rather under the government's right to impose a tax.

Within an hour of the ruling, the Goldwater Institute, which had steadfastly opposed the law on constitutional grounds, announced that it will proceed with a challenge to one aspect of the law unrelated to the insurance requirement.

Its challenge will relate to the law's establishing an Independent Payment Advisory Board, a 15-person presidentially appointed panel that will set Medicare policy and health care payment rates.

“Protecting any new federal agency from being repealed by Congress appears to be unprecedented in the history of the United States,” said Clint Bolick, Goldwater's vice president of litigation. He was quoted in a Goldwater press release.

“No possible reading of the Constitution supports the idea of an unelected, standalone federal board that’s untouchable by both Congress and the courts, and we will pursue this challenge all the way back to the Supreme Court if necessary,” Bolick said in the press release.

The Medicaid provision, that states enroll millions of uninsured in a massive extension of the health care program for the poor, drew significant criticism from governors and others, including Arizona Gov. Jan Brewer.

Years ago when Medicaid was enacted, Arizona initially refused federal money for it. The state came up with its own program, which was expanded a decade ago under a citizens' initiative and then cut back significantly in recent years during the fiscal crisis.

Many recipients of Arizona's version of Medicaid, the Arizona Health Care Cost Containment System, or AHCCCS, were dropped from the rolls in recent years because of budget cuts.

Brewer responded to the ruling with a written statement in which she called the decision "disheartening."

"Today’s decision by the U.S. Supreme Court flies in the face of what most Americans know to be true: ObamaCare is an overreaching and unaffordable assault on states’ rights and individual liberty," Brewer wrote.

Brewer said the decision "officially sets the stakes" for the November presidential election.

"Come November, we must elect a president who understands the economy, represents free enterprise and respects the Constitution and individual liberty," she wrote, before calling for the repeal of the Affordable Care Act.

Read the Supreme Court's ruling here.

Return to azpm.org later for more details. Or, listen to NPR 89.1 all day, watch Arizona Illustrated on PBS-HD6 at 6:30 p.m. Thursday and watch Arizona Week on PBS-HD6 at 8:30 p.m. Friday for full coverage of the health care issue.