Appeals court rules against individual mandate, but throws lifeline to Obamacare

A divided federal appeals court on Wednesday threw a lifeline to the Affordable Care Act, asking a lower court judge to reconsider his decision invalidating the entire law even as it declared the individual mandate unconstitutional.

The decision, by a two-to-one vote on the Fifth Circuit U.S. Court of Appeals, means prolonged uncertainty for the nation’s health care system and the millions of Americans who rely on the law. But it will have little immediate practical impact for beneficiaries or those without health insurance.

Preexisting condition protections and Obamacare insurance subsidies remain in place, for now, as the case continues.

"The individual mandate is unconstitutional because it can no longer be read as a tax, and there is no other constitutional provision that justifies this exercise of congressional power," reads the majority opinion from the Fifth Circuit U.S. Court of Appeals.

The panel also asked a Texas district court judge, who had struck down the entire health law in a sweeping decision late last year, "to explain with more precision" whether and why the rest of the law should not stand.

"For now, the President got the gift he wanted -- uncertainty in the healthcare system and a pathway to repeal,” said California Attorney General Xavier Beccera, who is leading a coalition of 20 states defending the law.

"This decision could take us to a dangerous and irresponsible place, not just for the 133 million Americans with pre-existing conditions, but for our seniors who use Medicare, our children under the age of 26, and the 20 million additional Americans covered directly through the ACA marketplace," Beccera said, announcing plans to appeal.

President Donald Trump called the decision a "win for all Americans."

"This decision will not alter the current healthcare system. My Administration continues to work to provide access to high-quality healthcare at a price you can afford, while strongly protecting those with pre-existing conditions," Trump said in a statement. "The radical healthcare changes being proposed by the far left would strip Americans of their current coverage. I will not let this happen. Providing affordable, high-quality healthcare will always be my priority."

He added, "They are trying to take away your healthcare, and I am trying to give the American people the best healthcare in the world."

The ACA, which was signed into law by President Barack Obama in 2010, required that all Americans obtain health insurance or pay a penalty to the government. The U.S. Supreme Court upheld the provision on the basis of Congress’ taxing power.

In 2017, after Trump and congressional Republicans failed to repeal and replace Obamacare, they moved to zero out the penalty for going without health insurance.

A group of 18 Republican-led states then challenged the law in federal court, winning a declaration last year that the mandate no longer qualifies as a tax, cannot be severed from the rest of the law, and thereby invalidates the entire ACA.

The decision sent shockwaves through the political and health care systems, raising the specter of an abrupt return to pre-ACA systems without protections for preexisting conditions, premium subsidies and expanded Medicaid benefits.

The appeals court ruling now opens the door to preservation of some elements of Obamacare, but advocates for the law said it remains under serious threat.

House Speaker Nancy Pelosi called it a "chilling threat" to millions of Americans.

"The Trump Administration's indefensible assault on Americans' health care in the courts continues to threaten catastrophe in the lives of families across the country," she said in a statement, as House Democrats vote to impeach Trump.

"We will continue our fight in the courts and in the Congress to defend and strengthen affordable health care for all Americans. This ruling should not stop families from continuing to sign up for the quality, affordable coverage they need in states where the enrollment period is still open,” she said.

The decision all but guarantees the health law challenge will not reach the Supreme Court in 2020 before the presidential election. It also means Trump will face reduced pressure to ready and present an alternative health plan in the event the ACA had been abruptly nullified.

Industry groups and independent health care analysts say wiping out Obamacare without an alternative would mean a highly disruptive shift in the health care of millions of Americans.

The ACA has sharply reduced the number of uninsured Americans since 2010, covering 20 million more people than if the law had not taken effect, according to the nonpartisan Kaiser Family Foundation.

An estimated 52 million Americans have preexisting health conditions that insurers could have denied coverage to under pre-ACA rules in most states, the foundation said.

There is not currently a viable alternative to the law that can pass the House and Senate and get signed into law by Trump. Trump told ABC News in June that he will be unveiling a "phenomenal" health care plan within the next two months. He never did so.

Public polling consistently shows that health care is voters' top issue headed into the 2020 presidential election.

During the 2018 midterm elections, Democrats credited their electoral success, in part, to a focus on health care issues.