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Ruling Striking Down Obamacare Won’t Affect Health Coverage—Yet

If you like your Obamacare health plan, you can keep it—at least for now.

A federal judge’s Friday evening ruling that the Affordable Care Act is unconstitutional was a first-round victory for opponents of the law. But it will need to survive review by higher courts to have any effect on the program that’s credited with expanding health insurance to about 19 million people in the U.S.

A crimson banner appeared on the federally run healthcare.gov website Friday night to reassure potential customers: “Court’s decision does not affect this season’s open enrollment.” People in 39 states have through the end of Saturday to sign up for coverage for next year, and longer in some states like New York and California.

The White House confirmed Friday that the law remains in effect pending appeal, even as President Trump suggested Congress start working on a replacement.

The ruling has “no impact to current coverage or coverage in a 2019 plan,” Seema Verma, the administrator for the Centers for Medicare and Medicaid Services, tweeted late Friday.

Pressure will now be on Republicans, who have decried the ACA for years, to offer alternatives that won’t shut out sick people, as insurance markets routinely did before the ACA. Verma last month said she had “ contingency plans” to protect people with pre-existing conditions, without offering details.

If the law were thrown out, it would likely harm the businesses of hospitals, some insurers and health-care providers who have gained millions of new paying customers thanks to the billions of dollars worth of subsidized health insurance coverage provided by the program.

Spencer Perlman, an analyst with Veda Partners, called an ultimate ruling striking down the law unlikely. If it did happen, however, “this outcome almost certainly would increase the number of the uninsured, which clearly is a headwind for providers,” Perlman said in a note to clients.

Overturned, in Theory

The opinion of federal Judge Reed O’Connor would be a shock to the health-care system, if it ever takes force. The ruling is written so that it won’t take effect immediately, giving higher courts time to consider the case.

The Fort Worth, Texas-based judge agreed with a coalition of Republican-led states that challenged the law in federal court, after Congress repealed the tax penalty for people who don’t buy insurance. The legitimacy of that fee was part of the Supreme Court’s justification for upholding the law in a previous challenge.

O’Connor’s opinion that the entire ACA can no longer stand would disrupt health-insurance markets and countless other aspects of American health care: expanded Medicaid coverage, rules for employer health plans, and a long list of taxes and changes to Medicare payments, among other policies.

That view is an even more expansive dismissal of the law than the Trump administration’s own position in court. The Justice Department, which typically defends federal laws, asked the court to strike the law’s protections for people with pre-existing conditions along with its mandate that people buy coverage, but leave the rest of the law intact.

It will be up to higher courts to decide whether any elements of the law should be struck down — and, if so, how to unwind policies that are now deeply enmeshed in America’s $3.5 trillion health-care system.

“It’s above the judge’s pay grade to invalidate the entire ACA without any possibility of review,” Nicholas Bagley, a law professor at the University of Michigan, wrote on Twitter. Bagley contributed to an brief defending the law in the case.

The ACA has been here before, twice. In the first major legal challenge led by ideological opponents of the law, the Supreme Court in 2012 affirmed that the bulk of the ACA was constitutional, while making Medicaid expansion optional for states. Three years later, the high court left the law intact again.

Five of the current justices on the Supreme Court, including Chief Justice John Roberts, have twice declined to strike down the law. Roberts, now seen as the court’s swing vote, wrote both of those opinions backing the law.