* Healthcare seen as major issue in 2012 elections
* Close vote likely, Justice Kennedy may control outcome
* Obama administration, 26 states appealed to high court
(Adds political analyst and health secretary's comments)
By James Vicini
WASHINGTON, Nov 14 The Supreme Court agreed on
Monday to decide the fate of President Barack Obama's
healthcare law, with an election-year ruling due by July on the
U.S. healthcare system's biggest overhaul in nearly 50 years.
A Supreme Court spokeswoman said oral arguments would take
place in March. There will be a total of 5-1/2 hours of
argument. The court would be expected to rule during its
current session, which lasts through June.
The decision had been widely expected since September, when
the Obama administration asked the country's highest court to
uphold the centerpiece insurance provision and 26 of the 50
states separately asked that the entire law be struck down.
At the heart of the legal battle is whether the U.S.
Congress overstepped its powers by requiring all Americans to
buy health insurance by 2014 or pay a penalty, a provision
known as the individual mandate.
Legal experts and policy analysts said the healthcare vote
may be close on the nine-member court, with five conservatives
and four liberals. It could come down to moderate conservative
Justice Anthony Kennedy, who often casts the decisive vote.
The law, aiming to provide medical coverage to more than 30
million uninsured Americans, has wide ramifications for company
costs and for the health sector, affecting health insurers,
drugmakers, device companies and hospitals.
A decision by July would take the healthcare issue to the
heart of a presidential election campaign that ends with a vote
on Nov. 6 next year. Polls show Americans deeply divided over
the overhaul, Obama's signature domestic achievement.
A ruling striking down the law, while Obama seeks another
four-year term, would be a huge blow for him legally and
A ruling upholding the law would vindicate Obama legally,
but might make healthcare an even bigger political issue for
the leading Republican presidential candidates, all of whom
Norman Ornstein of the American Enterprise Institute, a
Washington think tank, said the ruling would have a polarizing
effect on the Republican and Democratic faithful but a minimal
impact on Obama's standing with middle-of-the-road voters who
often decide elections.
"My guess is that for voters in the middle if the Supreme
Court says the law is constitutional that probably makes them a
little bit happier with Obama. If they say it's
unconstitutional that may make them a little less happy," he
The high court could leave in place the entire law, it
could strike down the individual insurance mandate or other
provisions, it could invalidate the entire law or it could put
off a ruling on the mandate until after it has taken effect.
Also on Monday the administration, in the latest in a
string of executive moves to sidestep a divided Congress,
announced up to $1 billion for a program to support healthcare
innovation to cut costs and improve care.
WHITE HOUSE PLEASED
White House Communications Director Dan Pfeiffer said the
administration was pleased the Supreme Court agreed to hear the
case. "We know the Affordable Care Act is constitutional and
are confident the Supreme Court will agree," he said.
Those challenging the law also voiced optimism.
Karen Harned of the National Federation of Independent
Business said: "We are confident in the strength of our case
and hopeful that we will ultimately prevail. Our nation's
job-creators depend on a decision being reached before the
harmful effects of this new law become irreversible."
Florida Attorney General Pam Bondi, whose state is leading
the challenge to the law, said: "We are hopeful that by June
2012 we will have a decision that protects Americans' and
individuals' liberties and limits the federal government's
BernsteinResearch, which provides investment analysis,
predicted the most likely outcomes were the law being upheld or
a decision being delayed until 2015.
Paul Heldman, senior analyst at Potomac Research Group,
which provides Washington policy research for the investment
community, said he still leaned toward the view that the law's
requirement that individuals buy insurance will be upheld.
"We continue to have a high level of conviction that the
Supreme Court will leave much of the health reform law
standing, even if finds unconstitutional the requirement that
individuals buy coverage," he wrote in a recent note.
After Obama signed the law in March 2010 following a
bruising political fight in Congress, the legal battle began,
with challenges by more than half of the states and others. The
Supreme Court has long been expected to have final say on the
The administration has said other landmark laws, such as
the Social Security Act, the Civil Rights Act and the Voting
Rights Act, faced similar legal challenges that all failed.
For a fully functional new system by 2014, Health and Human
Services Secretary Kathleen Sebelius said, "It's important that
we put to rest once and for all the issue that maybe the law
will disappear, maybe the law will be struck down."
The states also are challenging the expansion of Medicaid,
a federal-state partnership that provides healthcare to poor
Americans, on the grounds Congress unconstitutionally forced
the expansion on the states by threatening to withhold funds.
The dispute reached the Supreme Court after conflicting
rulings by U.S. appeals courts.
Appeals courts in Cincinnati and Washington, D.C., upheld
the individual mandate. An appeals court in Atlanta struck it
down, but refused to invalidate the rest of the law. An appeals
court in Virginia ruled the mandate could not be decided until
2015, when the penalties for not having insurance are imposed.
The Supreme Court cases are National Federation of
Independent Business v. Sebelius, No. 11-393; U.S. Department
of Health and Human Services v. Florida, No. 11-398; and
Florida v. Department of Health and Human Services, No.
(Additional reporting by Alister Bull, Lily Kuo and Anna
Yukhananov and Lewis Krauskopf in New York; Editing by Howard
Goller and Cynthia Osterman)