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Individual mandate will be in Supreme Court spotlight

The Supreme Court is set to hear arguments challenging the constitutionality of the health care reform law. NBC's Pete Williams reports.

Beginning Monday, the Supreme Court devotes three days in the courtroom to the titanic legal battle over the Affordable Care Act, the Obama administration’s landmark health care law.  The justices will hear a remarkable six hours of oral argument, the most attention given to a single act of Congress in nearly half a century.

The showdown comes two years, almost to the day, after it was signed into law on March 23, 2010. "The bill I'm signing will set in motion reforms that generations of Americans have fought for, and marched for, and hungered to see," President Barack Obama declared at the White House ceremony.

Related: Health care ruling could send fight back to Congress

But his signature also set in motion a flurry of legal challenges that worked their way through the federal courts at the same time some provisions of the new law were taking effect.

Must-Read Op-Eds: Mika Brzezinski reads from a Charles Krauthammer column on the Supreme Court's hearing on the constitutionality of the Affordable Care Act. Krauthammer says if the act is upheld "it fundamentally changes the nature of the American social contract."

Here's what to expect on next week:

Though the lawyers begin their presentations Monday, the main event actually comes Tuesday, March 27, when the court hears two hours of argument over the constitutionality of the "individual mandate," which requires virtually all Americans to buy health insurance for the rest of their lives.

The parties agree that Congress has never before compelled nearly every citizen to buy something on the private market. The issue is whether the Constitution's grant of the power "to regulate commerce" gives Congress such sweeping authority.   

“The Affordable Care Act,” argues the Justice Department in its brief defending the law, “creates an incentive for individuals to finance their participation in the health care market by means of insurance, the customary way of paying for health care in this country.”

Nationwide commerce is implicated, the government says, because the 50 million Americans who lack insurance pay only about a third of their health care costs. The unpaid amount is shifted to those who do have coverage, increasing the average premium for insured families by more than $1,000 a year.

Says Neal Katyal, a former Obama administration deputy solicitor general, “Congress found that everyone is going to consume health care at some point in their lives, and it needed to regulate the financing for it to make sure that people essentially had enough money, once they got sick, to be able to pay for it.”

But 26 states and the National Federation of Independent Business argue that the Constitution gives Congress the power to regulate only individuals actually engaged in commerce. By their logic, Congress can regulate those who already have health insurance but not those who lack coverage and are therefore outside the stream of commerce.

“Forcing people into commerce does not regulate commerce. Otherwise, Congress could compel the purchase of any product,” says Michael Carvin, a Washington, D.C., lawyer representing the business group.

“Congress’s power to regulate interstate commerce does not remotely authorize it to regulate individuals whose defining characteristic is their commercial non-participation,” he says.

Representing the 26 states challenging the law, former Bush administration solicitor general Paul Clement compares it to the federal government’s “Cash for Clunkers” program, which provided an incentive to buy newer, more fuel-efficient cars.

“Why fool around with incentives if you could just force people above a certain income level to just go buy a car?” he asks. “If Congress can do this with health insurance, Congress presumably could do this in all sorts of markets where it would be very convenient to force people to engage in commerce.”

The court begins the week Monday by considering whether the legal challenges can be heard now, or if the justices are blocked from taking up the issue by the Anti-Injunction act, a federal law passed almost 150 years ago. That law bars the courts from hearing challenges to new taxes before they take effect. The health care law imposes a penalty on anyone who doesn't buy health insurance, to be paid at tax time and collected by the Internal Revenue Service. 

The court will therefore consider whether the health care law imposes what amounts to a tax and, if so, whether the challengers must wait a few more years until the Affordable Care Act is fully in force, including the mandatory insurance provision. 

Kicking the issue down the road might be attractive to some -- perhaps even some of the justices -- who don't want the decision becoming an issue in an active presidential race or who don’t want the campaign complicating the decision. But both the challengers and the Obama administration urge the court to find that it's simply a penalty, not a tax, and decide the case now.

On Wednesday, the court takes up two other questions. If it finds the health insurance requirement is unconstitutional, can it be severed from the Affordable Care Act so that the rest of the law would be allowed survive?  And do the law’s new Medicaid provisions push the states too far?

Both the states and the business group claim that Congress would not have passed the law without the minimum insurance coverage provision.  “Insurance companies would remain free to turn away millions of the very same uninsured individuals to whom the Act promised insurance,” says the legal brief for the states.

But the Justice Department points out that many of the Act’s provisions are already in effect, two years before the insurance mandate takes effect in 2014.  “That time lag,” the government said, “establishes conclusively that much of the act operates independently.”

As for Medicaid, the states claim that Congress has treaded over a constitutional line by requiring them to widen coverage under the federal-state program that funds health care for the needy.  The Affordable Care Act expands eligibility to many under 65 who earn up to 133 percent of the poverty level. 

While Congress has broad authority to set conditions on how states spend federal money, the states argue that the expense of expanding coverage will force them to make an impossible choice: either continue to participate in Medicaid and incur billions in new expenses or drop out of Medicaid completely. Such a take-it-or-leave-it mandate, they claim, gives the federal government the power to compel them to pay for Medicaid expansion, violating the Constitution’s limits on federal power over the states.

The Obama administration, however, maintains that the Medicaid expansion is only the latest in a series of changes in the program.  The federal government will pay all of the additional costs at first.  By 2020, the states must pick up ten percent of the additional expense, which the administration says is less than their usual contribution rate under the program.

If the court gets past the Anti-Injunction Act question and goes to the heart of the health care issue, which most legal experts believe it will, a decision will probably come three months from now, in late June.   

Legal experts widely expect that the court’s liberal-minded  justices: Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor, and Elena Kagan -- will vote to uphold the act.  And Justice Clarence Thomas, who views the Commerce Clause power as a very limited, will almost certainly vote to strike it down.

The liberal arm might find a fifth vote from Justice Anthony Kennedy.  But even the opponents of the law say the vote of Justice Antonin Scalia may be in play. He has joined the court’s majorities in past decisions that read the Constitution’s commerce power very broadly.