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Appeals court appears ready to rule Obamacare unconstitutional

Court likely to rule ACA unconstitutional
Appeals court likely to rule Obamacare unconstitutional 01:22

The Affordable Care Act, and the health coverage of millions of Americans, could face a major threat to its future.  A federal appeals court in New Orleans appears ready to rule that a core provision of Obamacare is unconstitutional.

It's unclear exactly when the appeals court will rule, but whichever side loses at this stage is almost certain to appeal to the Supreme Court, setting up a potential legal showdown in the middle of the 2020 presidential race.

The Supreme Court previously ruled that the Affordable Care Act was constitutional because Congress has the power to tax people. It held that if people had to pay a penalty for not buying insurance, that payment was effectively a tax.

But Congress eliminated the penalty in 2017. Now, the court will decide if the rest of the Affordable Care Act is still constitutional without it.

In December, a federal judge in Texas ruled the law is unconstitutional without the tax. The Trump administration agreed with that ruling, and refused to defend the law -- so multiple states with Democratic attorneys general and the House of Representatives stepped in.

If the law is overturned, nearly 20 million people could lose their health insurance. Children would no longer be covered until age 26, and it could affect people with preexisting conditions.

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