A federal judge's ruling Friday that Obamacare is unconstitutional poses a threat to the credit quality of some US states, as well as to hospitals and insurance companies, S&P Global Ratings warned. Leerink analyst Ana Gupte expects the judge's decision will be overturned either by the Fifth Circuit Court of Appeals next year or the Supreme Court in 2020. And the stakes go even higher. But the law had much broader reach, including protections for people with preexisting conditions, an end to lifetime caps for all consumers, requirements on how much of their revenue insurers must spend on customers' coverage and efforts to improve quality at hospitals, nursing homes and doctors' offices.
Julie Rovner of Kaiser Health News, who joined us Friday night about the insurance markets just before this broke, is back with us now.
Most legal experts do not believe the Supreme Court will ultimately side with this ruling, but the uncertainty could be pressure stocks in the near term, brokerage Oppenheimer said. The president has always been stung by his 2017 effort to repeal and replace the signature healthcare law of his predecessor, which was sunk with a single "no" vote by former Republican Sen.More news: Spain’s transgender beauty queen gets standing ovation at Miss Universe gala
"Regardless, the ACA will remain in effect for 2019, and we are optimistic that it will remain in effect thereafter". The Trump administration is not defending the Affordable Care Act, so Becerra and 16 other Democratic attorneys general have stepped in.
The Supreme Court in 2012 ruled that the individual mandate was a valid exercise of Congress' taxation powers, with the law imposing a monetary penalty on people who did not obtain insurance.
Trump celebrated the decision Friday in a series of spirited tweets. But the judge also held that because the ACA is not financially viable without the mandate, the entire law had to be struck down. O'Connor, however, did not issue an injunction to stop federal and state governments from enforcing the law.