Federal judge strikes down Obamacare: What it means

A Texas federal judge on Friday struck down the entire Affordable Care Act, ruling that the entire health care law is unconstitutional because of a recent change in federal tax law.

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Judge Reed O'Connor of the Federal District Court in Fort Worth handed down the decision just before the final day of open enrollment season for Affordable Care Act coverage in most states. The ruling was over a lawsuit brought by 20 Republican-led states that sought to have the ACA thrown out. Now, the ruling in Texas v. U.S. will almost certainly head to the Supreme Court, media outlets reported.

Here are some takeaways from the ruling, and what the decision may mean for the nearly 20 million Americans insured under the ACA.

At issue: Whether the ACA’s insurance mandate still compelled people to buy coverage after Congress reduced the penalty to zero dollars.

A hallmark feature of the ACA was the requirement for individuals to buy health insurance or pay a penalty. The controversial penalty was upheld by a 2012 Supreme Court decision, with the Court ruling that the penalty was within Congress’ taxing power. However, Congress reduced the tax to zero as part of the tax overhaul signed by President Trump last December.

Texas v. U.S. plaintiffs argued that without the tax, the rest of the law couldn't stand. O'Connor agreed.

“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 other linchpin: Pre-existing conditions. 

Responding to the lawsuit, the Justice Department disagreed with the plaintiffs that the entire law should be struck down. However, it declined this year to defend not just the individual mandate, but the law's provisions that protect people with pre-existing conditions, reported The New York Times.

This prompted a group of 16 states, led by California, and the District of Columbia to intervene to defend the law.

Republicans are applauding the ruling, while Democrats are vowing to fight it.

Shortly after the ruling was issued, California Attorney General Xavier Becerra said California and the other defendant states would challenge the ruling with an appeal in the United States Court of Appeals for the Fifth Circuit in New Orleans.

Congresswoman Nancy Pelosi issued a statement saying that when Democrats gain control of the House next month, they will “move swiftly to formally intervene in the appeals process to uphold the lifesaving protections for people with pre-existing conditions and reject Republicans’ effort to destroy the Affordable Care Act.”

Texas Attorney General Ken Paxton, who led the lawsuit, praised O’Connor’s ruling.

“Our lawsuit seeks to effectively repeal Obamacare, which will give President Trump and Congress the opportunity to replace the failed social experiment with a plan that ensures Texans and all Americans will again have greater choice about what health coverage they need and who will be their doctor,” Paxton said in a statement.

President Donald Trump also tweeted his support for the ruling. "Wow, but not surprisingly, ObamaCare was just ruled UNCONSTITUTIONAL by a highly respected judge in Texas. Great news for America!" he said.

Not much is expected to change in the short term.

Now that the lawsuit is being appealed, individuals won’t see any change to their coverage until the appeals process is finished.

"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.

Until the Supreme Court makes a ruling, the Affordable Care Act is expected to stay in place.

How long the appeals process will take is unclear. Seema Verma, the head of the Centers for Medicare and Medicaid Services, who oversees Obamacare's insurance marketplaces, tweeted late Friday that "exchanges are still open for business and we will continue with open enrollment. There is no impact to current coverage or coverage in a 2019 plan."

The entire ruling can be read here.

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