Supreme Court agrees to hear Obama healthcare law

US 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 country'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 all US citizens 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 more than 30 million uninsured citizens with medical coverage, has wide ramifications for company costs and for the health sector, affecting health insurers, drugmakers, device companies and hospitals.

A decision by July would bring the healthcare issue to the heart of the presidential election campaign. Polls show US citizens are deeply divided over the overhaul, Obama's signature domestic achievement.

A ruling striking down the law, months before the US elections in November 2012 as Obama seeks another four-year term, would be a huge blow for him legally and politically.

A ruling upholding the law would vindicate Obama legally, but might make healthcare an even bigger political issue for the leading Republican presidential candidates, all of whom oppose it.

Also on Monday the administration, in the latest in a string of executive moves to sidestep a divided Congress, announced up to $1 billion for a program to support healthcare innovation to cut costs and improve care.

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.

A Supreme Court spokeswoman said oral arguments would take place in March. There will be a total of 5-1/2 hours of argument. The court would be expected to rule during its current session, which lasts through June.