ATLANTA (Legal Newsline) - A federal appeals heard arguments Wednesday in the 26-state lawsuit that challenges federal health care reform signed into law last year.

Former U.S. Solicitor General Paul Clement represented the states before the U.S. Court of Appeals for the 11th Circuit, which has been asked to determine if an annual penalty placed on individuals who do not purchase health insurance is unconstitutional.

U.S. District Judge Roger Vinson ruled that it is, and the federal government appealed. The issue will ultimately be decided by the U.S. Supreme Court.

"The law passed on partisan lines by Congress last year blatantly violates the U.S. Constitution by mandating Americans to enter the marketplace and purchase products," Georgia Attorney General Sam Olens said Wednesday.

"This direct assault on individual liberty exceeds Congress's enumerated powers. Additionally, the law significantly alters the Medicaid program and passes on massive costs and more requirements to the States. I am hopeful that the court will agree with Judge Vinson that the law must be struck down."

In January, Vinson found that Congress was unconstitutionally regulating economic inactivity and, because the mandate is too integral a part to be separated, he voided the entire legislation. He called it "a difficult decision to reach."

In his ruling, Vinson wrote, "If Congress intends to implement health care reform -- and there would appear to be widespread agreement across the political spectrum that reform is needed -- it should do a comprehensive examination of the Act and make a legislative determination as to which of its hundreds of provisions and sections will work as intended without the individual mandate, and which will not."

"It is Congress that should consider and decide these quintessentially legislative questions, and not the courts."

Individuals who do not purchase health insurance must pay a yearly penalty of $695 under the new health care law.

Virginia Attorney General Ken Cuccinelli was also successful with his challenge at the district court level. The appeal of his win is being decided by the Fourth Circuit.

The 11th Circuit judges deciding the case are Joel Dubina, Stanley Marcus and Frank Hull.

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