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Analysis: Healthcare ruling and what it means

By Lisa Lambert and Jeremy Pelofsky

WASHINGTON (Reuters) - An appeals court dealt a blow to President Barack Obama's healthcare law on Friday, leaving a mark on constitutional law, the healthcare industry, U.S. politics and U.S. states.

The court ruled as "unconstitutional" the law's requirement that individuals buy health insurance or pay a fine, but upheld the rest of the law passed by Congress last year. Here is a look at what it means on four fronts:

THE LAW - Almost everyone agrees at least one of the lawsuits challenging the constitutionality of the sweeping reform law, known as the Affordable Care Act, will ultimately reach the Supreme Court, probably next year. This decision shows one way the highest court may rule, by maintaining the bulk of the reforms, but throwing out the so-called "individual mandate" making healthcare a legal requirement for all Americans.

HEALTHCARE - Throwing out the individual mandate could influence how the healthcare industry approaches the reforms in the law, especially when considering how to price insurance policies. Without the individual mandate, insurance premiums would likely rise. The mandate had guaranteed a large and steady pool of insurance purchasers.

U.S. POLITICS - The ruling will likely embolden conservatives who derisively call the healthcare reforms "Obamacare." Some have attributed the huge Republican gains in the November 2010 congressional elections to voter discontent over the law, Obama's signature piece of domestic policy. The issue is certain to feature in the campaign for the November 2012 presidential election when the president will seek a second term. Should the Supreme Court rule the same as the appeals court, Obama, a Democrat, could try to persuade Congress to pass a "legislative fix" for the individual mandate's structure, but he would face a tough time getting it through a Congress where Democrats no longer hold a majority in both houses as they did when the law passed in March 2010.

THE STATES - Friday's decision was in a lawsuit filed by 26 of the 50 states, which are charged with carrying out a bulk of the healthcare reforms. Along with worrying about the costs of implementation, the states say the law usurps their rights. Earlier this year, states that had criticized the law, such as Missouri, adopted an attitude of "if you can't beat them, join them." They began setting up state-run exchanges for health insurance and moving ahead on implementation in the hopes of influencing the reforms and limiting the reach of the law. But of late, they have taken a harder line, with Kansas recently sending back to the federal government a grant it had received to create an exchange. This ruling, at a level just below the Supreme Court, could cause them to further resist carrying out the law. (Editing by Howard Goller)

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