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A federal appeals court Friday tossed out key provisions of the sweeping health care reform bill championed by President Obama, setting up a likely election-year showdown at the Supreme Court over the landmark legislation.

A divided 2-1 panel of the 11th Circuit U.S. Court of Appeals in Atlanta found the law’s “individual mandate” section, requiring nearly all Americans to purchase health insurance by 2014 or face financial penalties — to be an improper exercise of federal authority.

“The individual mandate exceeds Congress’s enumerated commerce power and is unconstitutional,” wrote Chief Judge Joel Dubina. “This economic mandate represents a wholly novel and potentially unbounded assertion of congressional authority: the ability to compel Americans to purchase an expensive health insurance product they have elected not to buy, and to make them re-purchase that insurance product every month for their entire lives.”

Significantly, the court concluded even though that key section to be unconstitutional, the entire law need not be set aside.

In fact, the judges said the law’s expansion of the federal Medicaid program was constitutional, since states– which administer it — would not bear “the costs of the program’s amplified enrollments.”

The ruling conflicts with another federal appeals court in Cincinnati, which found the “individual mandate” to be lawful. That conflicts sets up a final ruling on the matter from the Supreme Court in coming months.

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