Obama hears health law overturned; moments later, thumbs-up

U.S. President Barack Obama makes a statement about the Supreme Court's decision on the Affordable Health Care Act in the East Room of the White House in Washington, June 28, 2012.

WASHINGTON (Reuters) - President Barack Obama was standing outside the Oval Office when he saw the news on television just after 10 a.m. Two networks, CNN and Fox News, were reporting the Supreme Court had struck down the centerpiece of his landmark healthcare law.

He looked quizzically at the TV screen.

Moments later, his face brightened. White House Counsel Kathryn Ruemmler walked in and flashed him two thumbs-up. The court had in fact upheld the Patient Protection and Affordable Care Act. The TV networks had reported it wrong.

Obama experienced some cognitive dissonance at that moment, a senior administration official told reporters. As Ruemmler was giving him the signal for good news, the headlines on the television screen still indicated the mandate had fallen.

The White House lawyer's sign trumped the cable networks' reports for the president, who smiled and gave Ruemmler a hug. His biggest domestic policy achievement, and with it a large part of his legacy, was still intact.

Roughly two hours later the president claimed victory for the American people in a somber-sounding address from the East Room of the White House.

"The highest court in the land has now spoken. We will continue to implement this law and we'll work together to improve on it where we can," Obama said.

"What we won't do - what the country can't afford to do - is re-fight the political battles of two years ago or go back to the way things were. With today's announcement, it's time for us to move forward," he said.

Obama seemed intent to avoid the impression of taking a victory lap, however. He pledged to implement and improve the law and said the Supreme Court's decision should put to rest the political fight over reform.

The divisive law was Obama's signature domestic policy achievement and the fulfillment of a promise he made as a presidential candidate in 2008. Obama's opponent in this year's presidential election, Republican Mitt Romney, has promised to repeal it if he wins.

Obama nodded to the political hits he took over the law and said he understood the "very real concerns" that millions of Americans had shared about it.

"Whatever the politics, today's decision was a victory for people all over this country, whose lives will be more secure because of this law, and the Supreme Court's decision to uphold it," Obama said.

"They've reaffirmed a fundamental principle that here in America - in the wealthiest nation on Earth - no illness or accident should lead to any family's financial ruin."

More than a dozen aides and senior advisers were present to watch his remarks at the White House. In Chicago, at Obama's campaign headquarters, the president's political advisers held an emotional all-staff meeting with the hundreds of workers based there, an official said.

Back in Washington, Obama called U.S. Solicitor General Donald Verrilli, who had argued the government's case for the healthcare law, to congratulate him. It was the first call the president made after the decision came down.

The president will likely read the court's decision himself over the weekend, one administration official said.

(Additional reporting by Alister Bull and Laura MacInnis; editing by Mohammad Zargham)