MIAMI (Reuters) - A federal judge in Florida struck down President Barack Obama's landmark healthcare overhaul as unconstitutional on Monday in the biggest legal challenge yet to federal authority to enact the law.
U.S. District Judge Roger Vinson ruled that the reform law's so-called individual mandate went too far in requiring that Americans start buying health insurance in 2014 or pay a penalty.
"Because the individual mandate is unconstitutional and not severable, the entire act must be declared void," he wrote, "This has been a difficult decision to reach and I am aware that it will have indeterminable implications."
Referring to a key provision in the Patient Protection and Affordable Care Act, Vinson sided with governors and attorneys general from 26 U.S. states, almost all of whom are Republicans, in declaring the Obama healthcare reform unconstitutional.
"Regardless of how laudable its attempts may have been to accomplish these goals in passing the act, Congress must operate within the bounds established by the Constitution," Vinson, who was appointed to the bench by Republican President Ronald Reagan, ruled.
The Obama administration said it would appeal Vinson's ruling and believed it would prevail on a highly politicized issue likely to end up at the Supreme Court.
"We strongly disagree with the court's ruling today and continue to believe -- as other federal courts have found -- that the Affordable Care Act is constitutional," Justice Department spokeswoman Tracy Schmaler said.
A White House official told reporters the administration planned to continue with implementation of the law.
"We'll continue to operate as we have previously and suspect that the states will do the same," said the senior administration official, who asked not to be named.
"Obviously this case will be appealed ... and so implementation would proceed apace ... This is not the last word by any means," the official said.
But the fact that the judge did not issue a stay of his ruling pending appeal by the government could threaten the application of many of the provisions of the healthcare law.
The plaintiffs represent more than half the U.S. states, so the Florida case has more prominence than some two dozen similar lawsuits filed in federal courts.
The healthcare overhaul enacted last year, a contentious cornerstone of Obama's presidency, aims to expand health insurance to cover millions of uninsured Americans while also curbing costs. Administration officials insist it is needed to stem huge projected increases in healthcare costs.
Two other district court judges have rejected challenges to the individual mandate. But a federal district judge in Richmond, Virginia, last month struck down that central provision of the law.
Vinson's ruling was dramatically broader and drew immediate strong reaction.
"Healthcare reform is the law of the land and, now that Americans see its benefits, a majority of them oppose Republicans' dangerous plans to repeal a law that put patients in control of their own healthcare," said Senate Democratic leader Harry Reid.
Ron Pollack, executive director of Families USA, an influential national advocacy group that pushed for the healthcare overhaul, called Vinson's decision an example of "radical judicial activism run amok."
Republican House Speaker John Boehner was among those who applauded Vinson's ruling. "Today's decision affirms the view, held by most of the states and a majority of the American people, that the federal government should not be in the business of forcing you to buy health insurance and punishing you if you don't," Boehner said in a statement.
The National Federation of Independent Business (NFIB), which says it represents small businesses across America and was a plaintiff in the lawsuit, also welcomed the ruling.
The individual mandate is key to the law's mission of covering more than 30 million uninsured. Officials argue it is only by requiring healthy people to purchase policies that they can help pay for reforms, including a provision that individuals with pre-existing medical conditions cannot be refused coverage.
Vinson's ruling comes after the U.S. House of Representatives, with a new Republican majority, voted earlier this month to repeal the healthcare reform law. The repeal measure is unlikely to go any further as the Democratic-controlled Senate is expected to drop it.
Shares of U.S. health insurers were little changed immediately after the ruling, with UnitedHealth Group Inc and Aetna roughly flat and WellPoint Inc down 0.8 percent.
"This just adds to the conflicting nature of the rulings that we've seen so far," said Matthew Coffina, an analyst with Morningstar. "I think everyone watching the industry at this point has been expecting the Supreme Court to ultimately decide this situation."
States involved in the lawsuit were Alabama, Alaska, Arizona, Colorado, Florida, Georgia, Idaho, Indiana, Louisiana, Michigan, Mississippi, Nebraska, Nevada, Pennsylvania, South Carolina, North Dakota, South Dakota, Texas, Utah, Washington, Iowa, Ohio, Kansas, Maine, Wisconsin and Wyoming.
Additional reporting by Jeremy Pelofsky, Donna Smith and Tom Ferraro in Washington, Lewis Krauskopf in New York; Editing by Pascal Fletcher and Bill Trott