The Supreme Court agreed last night to decide the fate of US president Barack Obama's healthcare law, with an election-year ruling due by July on the US 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 five-and-a-half 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 centrepiece 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 US 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 November 6th next year. Polls show Americans deeply divided over the overhaul, Mr Obama's signature domestic achievement.
A ruling striking down the law, while Mr Obama seeks another four-year term, would be a huge blow for him legally and politically.
A ruling upholding the law would vindicate Mr Obama legally, but might make healthcare an even bigger political issue for the leading Republican presidential candidates, all of whom oppose it.
Norman Ornstein of the American Enterprise Institute, a Washington think tank, said the ruling would have a polarising effect on the Republican and Democratic faithful but a minimal impact on Mr 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 Mr Obama. If they say it's unconstitutional that may make them a little less happy," he said.
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 last night the administration, in the latest in a string of executive moves to sidestep a divided Congress, announced up to $1 billion for a programme to support healthcare innovation to cut costs and improve care.
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 power."
After Mr 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 law's constitutionality.
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 US appeals courts.
Reuters