President Barack Obama’s signature healthcare law suffered a setback on Friday when an appeals court ruled that it was unconstitutional to require all Americans to buy insurance or face a penalty.

The U.S. Appeals Court for the 11th Circuit, based in Atlanta, ruled 2 to 1 that Congress exceeded its authority by requiring Americans to buy coverage, but it unanimously reversed a lower court decision that threw out the entire law.

The legality of the individual mandate, a cornerstone of the healthcare law, is widely expected to be decided by the U.S. Supreme Court. Opponents have argued that without the mandate, which goes into effect in 2014, the entire law falls.

The law, adopted by Congress in 2010 after a bruising battle, is expected to be a major political issue in the 2012 elections as Obama seeks another term. All the major Republican presidential candidates have opposed it.

Obama has championed the individual mandate as a major accomplishment of his presidency and as a way to try to slow the soaring costs of healthcare while expanding coverage to the more than 30 million Americans without it.

The White House voiced confidence the law would be upheld. ‘We strongly disagree with this decision and we are […]