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WASHINGTON | Thu Sep 8, 2011 1:36pm EDT (Reuters) - A U.S. appeals court handed President Barack Obama a victory for his signature health care law on Thursday, ruling against challenges by the state of Virginia and others seeking to invalidate the law as unconstitutional.

The U.S. Court of Appeals for the Fourth Circuit overturned a lower court judge who had ruled the federal government could not compel people to buy health insurance or face paying a penalty. This is known as the individual mandate and takes effect in 2014.

Virginia had contended this provision conflicted with a state statute, giving it standing to challenge the federal law. But the appeals court found that Virginia did not have the right to challenge it and overturned the decision.

One day after Congress passed the federal health care overhaul in March 2010, Virginia signed into law a measure aimed at protecting its residents from the federal law. But the appeals court said that was merely a declaration and did not trump the federal government's authority.

The appeals court did not address Virginia's challenge to whether the mandate, due to take effect in 2014, was constitutional.

In a separate ruling, the appeals court ordered another lawsuit against the health care law, which targeted the penalty imposed for those who do not purchase insurance, be dismissed because the penalty has yet to be imposed.

It was the second major victory at the appellate level for the White House in a case that will likely be heard by the U.S. Supreme Court during the 2011-12 term that begins next month.

Obama, a Democrat, pressed for the law to be passed to help stem the soaring costs of health care services, but rival Republicans have pushed to undo it in the courts, in state legislatures and in the U.S. Congress.

The issue is expected to dominate the November 2012 elections for president and Congress.

The decision follows a similar one in late June by the U.S. Court of Appeals for the Sixth Circuit in Cincinnati that upheld the so-called individual mandate by ruling that Congress had the power to require Americans to buy health insurance.

But it contrasts with one by the 11th Circuit in August that ruled against the individual mandate requirement in a challenge brought by 26 states.

Those conflicting decisions likely ensure that the Supreme Court, the country's highest court, will have to step in to resolve the differences.

(Additional reporting by Jon Stempel in New York and James Vicini in Washington; Editing by Tim Dobbyn and Howard Goller)

© 2010 Thomson Reuters. Click for Restrictions

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