A federal judge in Texas threw the health coverage of some 20 million Americans in limbo by ruling Obamacare must be scrapped because Congress struck the penalty for failing to obtain insurance coverage.
The invalidation of the landmark 2010 law is certain to send shock waves through the U.S. health system and Washington after a midterm election seen in part as a rebuke to Republican efforts to tear down Obamacare.
"Wow, but not surprisingly, ObamaCare was just ruled UNCONSTITUTIONAL by a highly respected judge in Texas," President Donald Trump wrote in a tweet celebrating the verdict. "Great news for America!"
The decision will be immediately appealed, said California Attorney General Xavier Becerra, who led several blue states in intervening to defend the ACA. It could ultimately become the third major Obamacare case to be taken up by the Supreme Court, which has twice voted to uphold the law.
U.S. District Court Judge Reed O'Connor, a George W. Bush appointee in Fort Worth, Texas, issued the decision gutting the law in response to a lawsuit from 20 conservative-led states that sought to have the Affordable Care Act tossed out. They successfully argued that the mandate penalty was a critical linchpin of the law and that without it, the entire frameworks is rendered unconstitutional.
"In sum, the Individual Mandate 'is so interwoven with [the ACA's] regulations that they cannot be separated. None of them can stand,'" O'Connor wrote.
The decision came a little more than 24 hours before the sign-up period for 2019 Obamacare coverage is set to close — and roughly a month after voters upset over Republicans' efforts to repeal and replace the ACA swept House Democrats back into the majority. O'Connor did not issue an injunction, leaving it unclear whether the Trump administration can continue to enforce the ACA in the near term. Obamacare enrollment will continue up to the Saturday deadline, administration officials said.
"We expect this ruling will be appealed to the Supreme Court. Pending the appeal process, the law remains in place," White House press secretary Sarah Sanders said in a statement.
Seema Verma, the head of the Centers for Medicare and Medicaid Services, who oversees Obamacare's insurance marketplaces, tweeted late Friday that Obamacare exchanges are still open for business and that open enrollment will continue. "There is no impact to current coverage or coverage in a 2019 plan," she wrote.
Democrats late Friday decried the decision as reckless and urged an appeals court to overturn it, while also tying it to the GOP's broader efforts to eliminate the ACA.
"Republicans want to gut healthcare. It's not a talking point, it's not an exaggeration," Sen. Brian Schatz (D-Hawaii) tweeted on Friday. "For ideological reasons, and because many can't stand that it's named Obamacare, they are causing millions to feel anxiety and possibly suffer. Shame on them."
Republicans zeroed out the mandate penalty as part of their 2017 overhaul of the tax code, after failing throughout last year to repeal and replace the ACA in full. The penalty is slated to disappear next year.
The ruling puts the Trump administration and Republican lawmakers in a bind. They've promised to save the health law's pre-existing condition protections if the court threw them out, but for years they've been unable to agree on an alternative that would maintain the law's stringent safeguards.
Trump on Friday urged Congress to negotiate a bipartisan health care bill that would replace the ACA and protect pre-existing conditions.
"Now Congress must pass a STRONG law that provides GREAT healthcare and protects pre-existing conditions. Mitch and Nancy, get it done," he tweeted, referring to Senate Majority Leader Mitch McConnell and House Speaker-designate Nancy Pelosi.
Yet lawmakers on either side have shown little inclination to compromise on health care. Democrats for months said Republicans would be responsible for any fallout from the verdict since they brought the case in the first place and spent a year trying unsuccessfully to repeal the ACA.
Some Republicans similarly criticized the lawsuit as unnecessary and "far-fetched," yet the party has not developed a workable alternative. An August proposal from Sen. Thom Tillis (R-N.C.) would have codified some ACA protections outside of the health law. But it was quickly panned after health care analysts said the legislation would do little to ensure protections for people with pre-existing conditions.
The Justice Department took the unusual stance of partially siding with the conservative states seeking to strike down the federal law. As a result, 16 mostly Democratic-led states intervened in the case to try and save Obamacare. But O'Connor didn't agree with their argument that by striking the tax penalty but leaving the rest of the federal health care law in place, Congress had clearly indicated its belief that they weren't inseparable.
"In some ways, the question before the Court involves the intent of both the 2010 and 2017 Congresses," O'Connor wrote. "The former enacted the ACA. The latter sawed off the last leg it stood on."
Many legal experts are skeptical that the lawsuit will ultimately succeed — including Jonathan Adler, one of the architects of the last major legal challenge to Obamacare. Adler on Friday night tweeted that O'Connor's opinion was "completely unmoored from the relevant legal authorities and doctrine."
But the victory at the lower court level means that there will be a cloud hanging over the future of the law for months, if not years, to come.
House Democrats, who won back the chamber after campaigning heavily on defending protections for pre-existing conditions, plan to quickly pass a resolution authorizing the House general counsel to defend the health care law on the chamber's behalf.
"We will take immediate action in the new Congress to intervene in this case and appeal this decision," House Ways and Means Committee Democrats said in a statement. "House Democrats will do whatever it takes to make sure the protections enshrined in the Affordable Care Act endure."
The Supreme Court upheld Obamacare as constitutional in 2012 and 2015, though the first of those challenges did strike down a provision requiring states to expand their Medicaid programs. Trump appointees Brett Kavanaugh and Neil Gorsuch have since joined the high court, replacing the late Antonin Scalia and retired Anthony Kennedy.
Verma told reporters late last month the administration had a backup plan if the court overturned the law. She declined to provide specifics at the time.
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