However, the 2-1 decision by a panel of the U.S. Court of Appeals for the Fifth Circuit in New Orleans did not invalidate the rest of the health law, The New York Times reported.
Instead, the appeals court sent the case back to a federal district judge in Texas to "conduct a more searching inquiry" into which parts of the health law could survive without the insurance requirement.
Wednesday's ruling comes about a year after the entire law was struck down by Judge Reed O'Connor of the Federal District Court in Fort Worth. He ruled that the insurance requirement could not be separated from the rest of the health law because it was "the keystone" of the act, being essential to its regulation of the health insurance market, The Times reported.
With the case being sent back to Judge O'Connor, it's unlikely to be resolved before next year's presidential election.
California Attorney General Xavier Becerra, who led 21 states that intervened in the case and argued to preserve the health care law, said he'd challenge the appeals court decision by petitioning the Supreme Court to take the case, The Times reported.