But U.S. Circuit Judge Laurence Silberman, who wrote for the majority, conceded the issue will "almost surely be decided by the [U.S.] Supreme Court," where the justices are already considering it.
"The right to be free from federal regulation is not absolute," Silberman said in the opinion upholding the law, "and yields to the imperative that Congress be free to forge national solutions to national problems, no matter how local -- or seemingly passive -- their individual origins."
The challenge before the Washington court, one of several around the country, had been rejected by a federal judge before being appealed by a conservative group founded by Pat Robertson.
The suit targeted the "individual mandate," a provision of the law requiring all Americans who can afford it to buy some kind of health insurance or pay a penalty.
The challengers' "central objection to the mandate is that Congress, for the first time, has actually commanded that all Americans purchase a product, health insurance, that many of them have never purchased before, never wish to purchase and may never need. ... The contested issue here is whether the government can require an immensely broad group of people -- all Americans, including uninsured persons with no involvement in the health insurance and healthcare markets -- to buy health insurance now, based on the mere likelihood that most will, at some point, need healthcare, thus virtually inevitably enter that market, and consequently substantially affect the health insurance market. [Challengers] say that Congress cannot regulate based on such sweeping generalizations."
However, Silberman wrote, "No Supreme Court case has ever held or implied that Congress' commerce clause authority [to regulate interstate commerce] is limited to individuals who are presently engaging in an activity involving, or substantially affecting, interstate commerce."
The Supreme Court is considering six healthcare petitions. A suit filed by 26 states and the National Federation of Independent Business is most likely to be considered by the court -- the Obama administration has pushed for its review and a determination on whether the individual mandate to buy health insurance is constitutional.