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Obamacare thrown out by judge, raising insurance uncertainty

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Obamacare was struck down by a Texas federal judge in a ruling that casts uncertainty on insurance coverage for millions of US residents.

[DALLAS] Obamacare was struck down by a Texas federal judge in a ruling that casts uncertainty on insurance coverage for millions of US residents.

US District Judge Reed O'Connor in Fort Worth agreed on Friday with a coalition of Republican states led by Texas that the signature health-care overhaul by President Barack Obama, known formally as the Affordable Care Act, was unconstitutional after Congress last year repealed a key provision - the tax penalty for not complying with the requirement to buy insurance.

The decision came just before the end of a six-week open enrollment period for the programme in 2019 and underscores a divide between Republicans who have long sought to invalidate the law and Democrats who fought to keep it in place.

The decision is almost certain to be appealed all the way to the Supreme Court.

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Market voices on:

"Today's ruling is an assault on 133 million Americans with preexisting conditions, on the 20 million Americans who rely on the ACA's consumer protections for health care, and on America's faithful progress toward affordable health care for all Americans," California Attorney General Xavier Becerra said in a statement.

A spokeswoman for Mr Becerra said an appeal will be filed before Jan 1.

Texas and an alliance of 19 states argued to the judge that they've been harmed by an increase in the number of people on state-supported insurance rolls. They claimed that when Congress repealed the tax penalty last year, it eliminated the US Supreme Court's rationale for finding the ACA constitutional in 2012.

The Texas judge agreed.

"The remainder of the ACA is non-severable from the individual mandate, meaning that the Act must be invalidated in whole," O'Connor wrote.

California and Democratic officials in 14 states, along with the District of Columbia, won permission to defend ACA in the Fort Worth case when the Trump administration sided with the states seeking to dismantle it.

They contended that overturning the law would throw millions off health insurance rolls by reversing Medicaid expansion, ending tax credits that help people and empowering insurers to once again deny coverage based on pre-existing conditions.

Justice Department lawyers urged the judge to strike down the individual mandate and provisions requiring insurance companies to cover individuals with preexisting health conditions and charge them the same premiums as healthy individuals.

They argued the judge should spare the rest of the law, which includes Medicaid expansion, the employer mandate, health exchanges, premium subsidies and federal health-care reimbursement rates for hospitals.

Maryland Attorney General Brian Frosh launched a counterattack Sept 13 to save Obamacare, seeking a judgment that the Affordable Care Act is constitutional and a court order barring the US from taking any action inconsistent with that conclusion. Mr Frosh sued then-US Attorney General Jeff Sessions and the federal departments of Justice and Health and Human Services.

BLOOMBERG