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 healthcare system's biggest overhaul in nearly 50 years.
The decision had been widely expected since late September, when the Obama administration asked the nation's highest court to uphold the centerpiece insurance provision and 26 states separately asked that the entire law be struck down.
The justices in a brief order agreed to hear the appeals. At the heart of the legal battle is whether the Congress overstepped its powers by requiring that all Americans buy health insurance by 2014 or pay a penalty, a provision known as the individual mandate.
The law, aiming to provide more than 30 million uninsured Americans with medical coverage, has wide ramifications for company costs and for the health sector, affecting health insurers, drugmakers, device companies and hospitals.
The law, Obama's signature domestic achievement, will be a major issue in the U.S. elections in November 2012 as he seeks another four-year term. Republican presidential candidates oppose the law and Republicans in Congress want to repeal it.
A Supreme Court spokeswoman said oral arguments would take place in March. There will be a total of 5-1/2 hours of arguments.
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.
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.
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.
(Reporting by James Vicini, Editing by Eric Beech)