By Agencies

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The United States Supreme Court has upheld Barack Obama's landmark overhaul of the country's healthcare system, handing the president a historic victory and bolstering his chances in a close re-election race this November.

The five-to-four decision, led by conservative Chief Justice John Roberts, upheld the mandate for individuals to buy insurance that lies at the heart of the act, though in an unexpected fashion.

The court did not decide that the mandate was a command but rather a penalty tax to be paid by those who do not buy insurance. Roberts supported the law's constitutionality using that rationale, while the four other justices in favour argued that it was a command and the four opposed disagreed with the law entirely.

That means that two years after Obama signed the Patient Protection and Affordable Care Act into law, an act to insure another 32 million Americans and prevent coverage from being refused on the basis of patients' medical histories, its key tenet thinly survived because of a chief jusitce whose nomination Obama opposed when he was a senator himself.

"One man, a conservative justice appointed by Obama's Republican predecessor, George W. Bush, thwarted the right-wing assault on the Affordable Care Act," wrote Adam Serwer for the left-leaning magazine Mother Jones.

Although the United States is the world's largest economy, it is the only industrialised democracy that until now does not provide health care coverage to all its citizens.

The law is extremely complex, and polls indicate a majority of Americans disapprove, she said.

Jonathan Cohn, an appellate lawyer at Sidney & Austin who has clerked for the court, said the mechanics of the decision were unexpected.

"The president did not want to call it a tax, but nonetheless the court says it's a tax, we're going to uphold it," he said.

But Cohn noted that the justices had also dealt Obama a setback. The administration's lawyers had argued that states that did not want to opt in to the new healthcare system would lose all of their government health subsidies, known as Medicaid - an effort to force them to participate.

But a majority of the court said that cutting off such funds was unconstitutional and instead ruled that states that accepted new government money to run the expanded healthcare programs would be forced to abide by all the law's provisions, and those that wanted to opt out would be unchanged.

Democrats welcomed the ruling, and Republicans warned that they would try to repeal it.

"Now that the matter is settled, I hope that we can work together to create jobs and secure this country's economic future," wrote Senator Majority Leader Harry Reid on Twitter.

The Senate's Republican leader, Mitch McConnell, told CBS News that Congress "must act to repeal this misguided law".

He said it "limited choices and increased health care costs for American families, [and] it has made it harder for American businesses to hire".