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Health-care reform law set back, setting stage for Supreme Court showdown

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But the fact that two of the three appeals courts have ruled and reached different conclusions significantly increases the likelihood that the Supreme Court will agree to examine the issue, legal analysts say.

In its ruling on Friday, the 11th Circuit panel struck down the individual mandate, but declined to follow the lead of a lower court judge in Florida, who ruled the entire ACA null and void.

Instead, the appeals court said it would allow the rest of the reform law to remain undisturbed. That action preserves features of the ACA, including the directive that insurance companies may not refuse coverage because of preexisting medical conditions and a measure that allows parents to continue to insure their children into their 20s.

Friday’s decision stems from a lawsuit filed on behalf of 26 states and a business group challenging the constitutionality of the ACA.

The court rejected an argument by the states that the expansion of Medicaid under the ACA, which requires the states to administer a larger program, amounts to unconstitutional coercion of the states by the federal government. The panel also rejected the Obama administration’s argument that the ACA should be upheld under the government’s taxing powers. The court said the punishment assessed for noncompliance with the insurance mandate was a penalty rather than a tax.

But the big ticket portion of the appeal related to the constitutionality of the individual mandate.

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