President Barack Obama's healthcare law suffered a setback on Friday when a U.S. appeals court ruled that it was unconstitutional to require all Americans to buy insurance or face a penalty.The U.S. Appeals Court for the 11th Circuit, based in Atlanta, found that Congress exceeded its authority by requiring Americans to buy coverage, but also reversed a lower court decision that threw out the entire healthcare law.
The legality of the individual mandate, a cornerstone of the healthcare law, is widely expected to be decided by the U.S. Supreme Court. Opponents have argued that without the mandate, which goes into effect in 2014, the entire law falls.
Obama has championed the mandate as a way to try to slow the soaring costs of healthcare while expanding coverage to the more than 30 million Americans without it
Obama has championed the individual mandate as a major accomplishment of his presidency and as a way to try to slow the soaring costs of healthcare while expanding coverage to the more than 30 million Americans without it.
The White House said it strongly disagreed with the ruling and voiced confidence the decision would not stand.
'Today's ruling is one of many decisions on the Affordable Care Act that we will see in the weeks and months ahead. In the end, we are confident the Act will ultimately be upheld as constitutional,' Obama aide Stephanie Cutter said in a statement.
The Supreme Court is expected to take up the healthcare law during its upcoming term that begins in October with a ruling possible by the summer of 2012, just a few months before Obama faces re-election.
Twenty-six states had challenged the mandate, arguing that Congress had exceeded its authority by imposing such a requirement, but the Obama administration had argued it was legal under the Commerce Clause of the U.S. Constitution.
A divided three-judge panel of the appeals court found that it did not pass muster under that clause or under the Congress' power to tax. The administration has said the penalty for not buying healthcare coverage is akin to a tax.
'This economic mandate represents a wholly novel and potentially unbounded assertion of congressional authority: the ability to compel Americans to purchase an expensive health insurance product they have elected not to buy, and to make them re-purchase that insurance product every month for their entire lives,' the majority said in its opinion.
Decision: Judge Frank Hull, who was appointed by President Bill Clinton, was one of the appeal court judges who deemed the bill unconstitutional
Republicans have sought to undercut or repeal the healthcare law at every level of government -- in federal court, in the state legislatures and in the U.S. Congress.
The decision contrasts with one by the U.S. Appeals Court for the 6th Circuit, based in Cincinnati, which had upheld the individual mandate as constitutional. That case has already been appealed to the Supreme Court.
The Court of Appeals for the 4th Circuit, based in Richmond, has yet to rule on a separate challenge by the state of Virginia. A federal judge in that state had ruled the mandate unconstitutional as well.
The state of Florida had led the 26 states to challenge the insurance requirement, winning a ruling by a federal judge in Florida that the entire law was unconstitutional.
Florida Attorney General Pam Bondi said: 'Today we have prevailed in preventing Congress from infringing on the individual liberty protected by the U.S. Constitution.'
However, the 11th Circuit did not agree that the entire Obama healthcare law should be tossed out.
Michele Bachmann's presidential campaign includes a strong push to repeal Obamacare and she said the decision was a 'welcome relief'
Further, the Obama administration on Friday issued new incentives for states and people to participate in health insurance exchanges, including tax credits and funding grants for the states.
The Obama administration did win some support from the appeals court for the individual mandate.
One of the three judges, Stanley Marcus, dissented from the majority opinion.
The majority 'has ignored the undeniable fact that Congress' commerce power has grown exponentially over the past two centuries and is now generally accepted as having afforded Congress the authority to create rules regulating large areas of our national economy,' wrote Marcus, also a Clinton appointee to the appeals court.
Michele Bachmann called the ruling a 'welcome relief' and she urged the Obama administration to rethink the entire healthcare bill in light of the ruling.
She said in a statement: 'Removing the individual mandate from Obamacare deprives it of the revenue necessary to pay for the bill.
'Implementing the remaining provisions without the mandate would dramatically increase our budget deficit and do further harm to our economy.'