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Federal appeals court strikes down new health law's mandate

A federal appeals court Friday struck down a central provision of the 2010 health care law, ruling that Congress overstepped its authority by requiring virtually all Americans to obtain health insurance.

The divided three-judge panel from the 11th U.S. Circuit Court of Appeals in Atlanta is the first appellate court to rule against any portion of the statute. The decision marks a significant victory for the 26 Republican attorneys general and governors who challenged the health care law on behalf of their states.

Florida Attorney General Pam Bondi, who is leading the lawsuit on behalf of the states, hailed the appellate court's ruling.

"Today we have prevailed in preventing Congress from infringing on the individual liberty protected by the U.S. Constitution. The ruling by the 11th Circuit Court of Appeals upholds our position that the federal health care law exceeds Congress' power," she said.

The Supreme Court will almost certainly decide the constitutionality of the act.

Opponents of the health care law, which has become a political lightning rod since its passage in March 2010, are pushing for swift Supreme Court review. The administration said Friday it is considering its legal options. One of those would be to appeal Friday's decision to the full 11th Circuit Court. That could delay any Supreme Court ruling until after the 2012 election.

The provision requiring all Americans to carry health insurance or face a tax penalty has been at the center of the legal debate. The law does not allow insurers to turn away the sick or charge them outrageous premiums. To cover their health care costs, others — particularly the young and healthy — will need to pay premiums to keep costs from skyrocketing. The potential tax penalties are meant to ensure they will do so.

The Obama administration also has a little-known fallback if it loses the court battle. The government can borrow a strategy that Medicare uses to compel consumers to sign up for insurance.

Medicare's "Part B" coverage for doctor visits carries its own monthly premium. Yet more than nine in 10 seniors sign up. The reason: Those who opt out when they first become eligible face a lifelong tax penalty that escalates the longer they wait.

The reaction to the ruling was swift and celebratory from the states that filed the lawsuit.

"The ruling today by the Appeals Court for the 11th Circuit against ObamaCare's individual mandates is a huge victory for Americans," Gov. Rick Scott said in a statement. "It is critical that this case be expedited to the United States Supreme Court so that we can put this job-killing federal government mandate behind us and begin making the meaningful improvements our health care system needs without infringing on the liberties of Americans."

A separate legal ruling Friday also buoyed critics of the law. The Ohio Supreme Court appeared to clear the way for voters there to decide whether to reject parts of the health care law in November with a unanimous ruling that rejected a liberal policy group's challenge of the so-called Health Care Freedom Amendment.

But the administration did get a small dose of good news Friday. The federal appeals court in San Francisco found that a former California lawmaker and a legal foundation could not file another challenge on the overhaul.

The 11th Circuit's ruling in Atlanta didn't come as a complete surprise. During oral arguments in June, each of the three judges repeatedly raised questions about the overhaul and expressed unease with the insurance requirement. And each judge worried aloud if upholding the landmark law could open the door to Congress adopting other sweeping economic mandates.

Information from the Washington Post and New York Times was used in this report.

What does it mean?

The law is still in effect for now. In March, U.S. District Judge Roger Vinson said the states should go ahead and implement the Patient Protection and Affordable Care Act even as the appeals process played out. Florida is the lead plaintiff in the 11th Circuit case, joined by 25 states and the National Federation of Independent Businesses.

What's next

A third challenge is pending in the 4th Circuit in Richmond, Va., with a decision expected soon. The Supreme Court will almost certainly decide the constitutionality of the act.

Federal appeals court strikes down new health law's mandate 08/12/11 [Last modified: Friday, August 12, 2011 10:49pm]
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