Supporters of Mr Obama's Affordable Care Act celebrate the ruling outside the Supreme Court / AP

Ruling is a huge win for President, ensuring healthcare provision for all Americans

After months of fevered anticipation, the US Supreme Court upheld yesterday the core of the ambitious healthcare overhaul driven through Congress by President Barack Obama in 2010, thus ensuring that provisions to extend health insurance to nearly every American can be implemented as planned.

The 5-to-4 ruling is momentous vindication for President Obama who, against the counsel even of some Democrats, dedicated most of his energies in the first months of his term to win the reforms.

To a significant degree his main policy legacy to date was saved from oblivion yesterday. At the same time, it is sure to galvanise conservative opponents of Mr Obama and hand a key issue to Mitt Romney, the Republican challenger, in November.

No ruling has been more anticipated since the 2000 decision that handed the presidency to George W Bush. But the final fate of the sweeping reforms known popularly as Obamacare, which were designed to put America on a path at last to align itself with other industrialised nations that guarantee health protection for their citizens, now moves out of the Court and into the ballot boxes this November.

The Court found that the so-called individual mandate at the heart of the reform law, which will require nearly every American to buy health insurance, does not violate the US constitution and therefore can stand. Controversially, however, it said that penalties that would be levied on those who do not comply must be considered as a tax – a ruling that could be electorally toxic for Mr Obama in November's presidential race.

"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," the key passage in the ruling, arguably the most important in a generation, said. "Such legislation is within Congress's power to tax." To the dismay of conservatives, Chief Justice John Roberts, appointed to the court by Mr Bush, sided with the majority in upholding the reforms.

"Today's decision was a victory for people all over this country" Mr Obama said last night, offering a shopping list of new benefits he said the law, formally called the Affordable Care Act, will offer. The headline changes include expanding the existing Medicare programme to help cover the more than 30 million people who do not have insurance today, preventing insurance companies from turning away people with pre-existing conditions and allowing young Americans to remain on their parents' policies until they are 26 years old.

The battle over healthcare law, which largely takes effect in 2014, has been a lead weight in Mr Obama's shoes from the start, something he freely conceded yesterday. "It should be pretty clear by now that I didn't do this because it was good politics," he said. "I did it because it was good for the country."

The anger of conservatives erupted within moments of the ruling coming out as hundreds of opponents – and supporters – of the Act gathered in a noisy crush on the steps of the Supreme Court. Each side competed for the attention with bells, drums, whistles, kazoos, funny costumes and placards under a blazing morning sun.

"We want freedom. The government and the Democrats are the slavers, the Democrats have always been the slaver party," blurted Susan Clarke, a Tea Party advocate who had come here from Venice, California.

But others basked in the ruling. "I am overjoyed," Barry Karas, a Washington DC resident, declared. "I was really fearful about what might happen here, but this is incredible. It's a big victory for the Obama administration and for the United States".

Within the hour, the leadership of the Republican-controlled House of Representatives vowed to hold a vote on 11 July to repeal the Act. But any repeal bill is certain to be defeated by the Democrat majority in the Senate.

Mr Romney instantly appropriated the issue casting himself as the last hope for conservatives who want to see the reforms killed. "If we're going to get rid of Obamacare, we're going to have to replace President Obama," he said in Washington. "My mission is to make sure we do exactly that."