Reuters: Regulatory News: UPDATE 1-US top court weighs all-or-nothing on healthcare law

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UPDATE 1-US top court weighs all-or-nothing on healthcare law Mar 28th 2012, 14:22 Wed Mar 28, 2012 10:22am EDT * Justices to end three days of historic arguments * Court weighs if law can survive without insurance mandate * Justices will take up Medicaid expansion for the poor By James Vicini and Joan Biskupic WASHINGTON, March 28 (Reuters) - The U.S. Supreme Court opened its final day weighing the fate of President Barack Obama's healthcare overhaul, considering on Wednesday whether the entire law can stand should the court rule against its centerpiece mandate that most people buy insurance. On this, the third and last day of historic arguments, the nine justices were due to hear whether the rest of the law, Obama's signature domestic accomplishment, can survive should the court decide that Congress exceeded its powers by requiring that most Americans obtain insurance by 2014 or face a penalty. The arguments began after the high court issued opinions in other, unrelated cases. The Obama administration faced skeptical questioning on Tuesday from the court's five-member conservative majority on the insurance requirement, known as the individual mandate. But it was unclear whether it would strike it down or let it stand. A ruling on the insurance mandate appeared likely to come down to Chief Justice John Roberts and Justice Anthony Kennedy, two conservatives who pummeled the administration's lawyer with questions on Tuesday. If even one of the five conservative Republican appointees joined the four liberal Democratic appointees on the court, the law would be upheld. If the five conservatives stay united, the law would fall. The justices are expected to meet in private on Friday to discuss the issues heard during the arguments this week and take a preliminary secret vote on how they plan to rule. The justices then will begin drafting their written opinions in the private confines of their chambers - a process that is expected to result in the rulings being announced by late June before the court goes on its traditional summer recess. At a later one-hour session on Wednesday, starting at 1 p.m. EDT (1700 GMT), the justices will review whether Congress violated the Constitution by coercing the states to dramatically expand the Medicaid healthcare program for the poor, providing coverage for an estimated 17 million Americans. As the court began its last day hearing arguments on the law - six hours spread over three days making it the longest on a single issue in more than 44 years - the crowd of supporters and protesters outside the high court was smaller and more subdued. FINANCIAL STAKES A Supreme Court decision striking down the law would be seen as a huge political and legal defeat for Obama ahead of the Nov. 6 election, when he seeks another four-year term. A ruling upholding the law would be a major vindication for Obama, but could make healthcare an even bigger issue in the presidential and congressional elections. Republican presidential candidates all oppose the law and could fight even harder to repeal if the court leaves in place the entire statute. The stakes could not be higher, financially, legally and politically. The law, which constitutes the U.S. healthcare system's biggest overhaul in nearly 50 years, seeks to provide health insurance to more than 30 million previously uninsured Americans and to slow down soaring medical costs. The law has wide ramifications for company costs and for the health sector, affecting insurers, drugmakers, device companies and hospitals. The healthcare investment bank Leerink Swann said in a research note that Wednesday's session was more important for managed care stocks and whether the individual mandate can be separated from the rest of the law. For hospital stocks, it said the loss of expanded coverage, through the Medicaid program or through the individual mandate, would be a negative development. Annual U.S. healthcare spending totals $2.6 trillion, about 18 percent of the annual gross domestic product. That translates to $8,402 per person every year. For the Supreme Court, the Wednesday arguments will complete a thorough legal and constitutional review of the law, the most important piece of social legislation in decades. The challengers, 26 states and a small business trade group, were represented by Paul Clement, a former solicitor general during George W. Bush's presidency. Clement argued in written briefs that the insurance mandate was at the heart of the law and so critical to its operation that all of it must be invalidated if the requirement to buy health insurance is stripped from it. He also argued that the Medicaid expansion was unconstitutional and the entire law should be declared invalid on those grounds as well. TOP LAWYERS Solicitor General Donald Verrilli, the Obama administration's top courtroom lawyer, will also argue on Wednesday. He has defended the Medicaid expansion on the grounds Congress clearly has the power to set the terms under which the federal government disburses funds to the states. Also arguing on Wednesday will be Deputy Solicitor General Edwin Kneedler, advocating the administration's position that if the insurance mandate is struck down, then only two other provisions would have to fall. Those provisions bar insurers from refusing coverage because of a person's pre-existing medical condition and from charging more due to a person's medical history. The court has appointed an outside private lawyer, H. Bartow Farr III, to argue that all other provisions can survive without the insurance mandate. That was the ruling last year by a U.S. court of appeals in Atlanta. 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. 11-400. Link this Share this Digg this Email Reprints

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