Atlanta- A federal appeals court panel struck down the centerpiece of President Obama’s sweeping health care overhaul Friday, moving the argument over whether Americans can be required to buy health insurance a step closer to the U.S. Supreme Court.

The divided three-judge panel of the 11th Circuit Court of Appeals concluded Congress overstepped its authority when lawmakers passed the so-called individual mandate, the first such decision by a federal appeals court. It’s a stinging blow to Obama’s signature legislative achievement, as most experts agree the requirement that Americans carry health insurance — or face tax penalties — is the foundation for other parts of the law.

The 207-page opinion, written by Chief Judge Joel Dubina and Circuit Judge Frank Hull, found that lawmakers cannot require residents to “enter into contracts with private insurance companies for the purchase of an expensive product from the time they are born until the time they die.”

In a lengthy dissent, Circuit Judge Stanley Marcus accused the majority of ignoring the “undeniable fact that Congress’ commerce power has grown exponentially over the past two centuries.” He wrote that Congress generally has the constitutional authority to create rules regulating large areas of the national economy.

The White House argued the legislative branch was using a “quintessential” power — its constitutional ability to regulate interstate commerce, including the health care industry — when it passed the overhaul law. Administration officials said they are confident the ruling will not stand. The Justice Department can ask the full 11th Circuit to review the panel’s ruling and will also likely appeal to the Supreme Court.

“Individuals who choose to go without health insurance are making an economic decision that affects all of us — when people without insurance obtain health care they cannot pay for, those with insurance and taxpayers are often left to pick up the tab,” said White House adviser Stephanie Cutter.

The 11th Circuit’s ruling, which sided with 26 states that had sued to stop the law from taking effect, is the latest contradictory judicial opinion on the health care debate. The federal appeals court in Cincinnati upheld the individual mandate in June, and an appeals court in Richmond has heard similar challenges to the law. Several lower court judges have also issued differing opinions on the debate.

The lawsuits ensure that health care reform will remain a contentious issue in the 2012 presidential campaign. Republicans want to overturn the legislation that Obama made one of the top priorities of his first term. They argue that it is too costly at a time of growing federal and state budget deficits and that it imposes too many government controls on the industry.

Obama supporters point out that the individual mandate was a policy originally advocated by conservative think tanks and that the health care reform package was modeled on a state program introduced in Massachusetts by then-governor Mitt Romney, now the perceived front-runner for the Republican presidential nomination. They say the mandate is a key component of legislation intended to extend coverage to more than 30 million uninsured people.

Legal observers long expected the case would ultimately land in the Supreme Court, but experts said Friday’s ruling could finally force the justices to take the case.

“There needs to be a pronouncement that’s nationwide,” said Carl Tobias, a professor at the University of Richmond School of Law. “It would be almost impossible to implement it if we have splintered decisions from different geographic circuits. The Supreme Court may feel now it has to take it.”

It’s the latest hit the president has taken in what has been a rough month that’s included humiliating blows on both the economy and in Afghanistan, while polls show deteriorating public support for both him and Congress.

Obama has been criticized by his Democratic base for his failures, which include dropping his push for tax increases as part of last week’s compromise to raise the government’s debt ceiling and his inability to let the Bush tax cuts for the wealthy to expire at the end of last year.

The Atlanta-based court is considered by many observers to be the most pivotal legal battleground yet because it reviewed a sweeping ruling by U.S. District Judge Roger Vinson, who not only struck down the individual mandate but threw out other provisions ranging from Medicare discounts for some seniors to a change that allows adult children up to age 26 to remain on their parents’ coverage. Medicare is the government-funded program that provides health care coverage for the elderly.

His reasoning was that the insurance requirement was “inextricably bound together” with the rest of the law, but the 11th Circuit concluded that Vinson went too far. The panel’s ruling noted that the “lion’s share of the act has nothing to do with private insurance, much less the mandate that individuals buy insurance.”

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 ensure they will do so.

The states had urged the 11th Circuit to uphold Vinson’s ruling, saying in a court filing that letting the law stand would set a troubling precedent that “would imperil individual liberty, render Congress’s other enumerated powers superfluous, and allow Congress to usurp the general police power reserved to the states.”

The Justice Department countered that Congress had the power to require most people to buy health insurance or face tax penalties because Congress can regulate businesses that operate across state lines, including health care providers.

The reaction was swift and celebratory from the 26 states that filed the lawsuit.

(Source: USA Today)