A federal judge just ruled that Obamacare is unconstitutional, threatening healthcare chaos

Thomson Reuters

A sign on an insurance store advertises Obamacare in San Ysidro

• In a ruling released Friday evening, a federal judge in Texas sided with 19 states arguing that key provisions of the Affordable Care Act or "Obamacare" are unconstitutional.
• The ruling brings new uncertainty to the country's healthcare markets, a day before the deadline to sign up for Affordable Care Act health plans in many states.
• The ruling doesn't go into effect immediately, and is almost certain to be appealed by state attorneys general who are defending the law.

In a ruling released Friday evening, a federal judge in Texas sided with states arguing that key provisions of the Affordable Care Act or "Obamacare" are unconstitutional. The decision is almost certain to be appealed.

Texas led 19 states arguing that the individual mandate - the requirement that everyone must have health insurance - is unconstitutional, after Congress gutted the key portion of the mandate, the tax penalty for not buying coverage.

U.S. District Judge Reed O'Connor in the Northern District of Texas agreed with those states and ruled that "Second, the Court finds the Individual Mandate can no longer be fairly read as an exercise of Congress's Tax Power and is still impermissible under the Interstate Commerce Clause-meaning the Individual Mandate is unconstitutional."

Judge O'Connor also ruled that the Individual Mandate is "essential to and inseverable from the remainder of the ACA."

That led the judge to conclude that the health law should be struck down. That includes the health law's subsidies that help people buy coverage, its expansion of Medicaid to millions of low income people, and its protections that let people with pre-existing conditions buy insurance.

"If this Texas decision on the ACA is upheld, it would throw the individual insurance market and the whole health care system into complete chaos," Larry Levitt, a senior vice president at the Kaiser Family Foundation said on Twitter. "But, the case still has a long legal road to travel before that's an immediate threat."

Fourteen states along with the District of Columbia argued in favor of the law. However, the Trump administration sided with Texas et all. New York Attorney General Barbara Underwood said the states will continue their defense of the law.

"We'll continue to fight in court for New Yorkers and all Americans," she said on Twitter.

The ACA has been a battle between Democrats, who favor the law, versus Republicans who have voted repeatedly to repeal it. The health law was passed in 2010.