Supreme Court weighs all-or-nothing on healthcare law

The fate of President Barack Obama's healthcare overhaul will be on the line on Wednesday when the Supreme Court considers whether the entire law must fall without its centerpiece insurance mandate.

Completing three days of historic arguments, the nine justices will hear arguments on whether the rest of the law, Obama's signature domestic accomplishment, can survive should the court decide Congress exceeded its powers by requiring all Americans buy insurance by 2014.

The Obama administration faced skeptical questioning on Tuesday from the court's five-member conservative majority on the insurance requirement. But it was unclear whether it would strike it down or let it stand.

A ruling on the mandate that most people obtain health insurance or face a penalty appeared likely to come down to Chief Justice John Roberts and Justice Anthony Kennedy, two conservatives who pummeled the administration's lawyer with questions.

If even one of the five conservative Republican appointees joins the four liberal Democratic appointees on the court, the law would be upheld. If the five conservatives remain unified, the law would fall. A ruling is expected by late June.

The justices on will also look at whether Congress had the power under the U.S. Constitution to require that the states dramatically expand the Medicaid healthcare program for the poor, providing coverage for an estimated 17 million Americans.

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The stakes could not be higher, financially, legally and politically.

The law, which constitutes the U.S. healthcare system's biggest overhaul in nearly 50 years, seeks to provide health insurance to more than 30 million previously uninsured Americans and to slow down soaring medical costs.

The law has wide ramifications for company costs and for the health sector, affecting insurers, drugmakers, device companies and hospitals.

The healthcare investment bank Leerink Swann said in a research note that Wednesday's session was more important for managed care stocks and whether the individual mandate - requiring most people to buy coverage by 2014 or face a penalty - can be separated from the rest of the law.

For hospital stocks, it said the loss of expanded coverage, through the Medicaid program or through the individual mandate, would he a negative development.

Annual U.S. healthcare spending totals $2.6 trillion, about 18 percent of the annual gross domestic product. That translates to $8,402 per person every year.

For the Supreme Court, the Wednesday arguments will complete a thorough legal and constitutional review of the law, the most important piece of social legislation in decades. Each of the three days of arguments, crowds of supporters and opponents have gathered outside, chanting and carrying signs.