He also held that the individual mandate is "essential to and inseverable from the remainder of the ACA".
The ruling came on the eve of the deadline for Americans to sign up for coverage in the federal insurance exchange created under the law.
A spokeswoman for California Attorney General Xavier Becerra, who leads a group of states opposing the lawsuit, said on Saturday that the Democratic defenders of the law were ready to challenge the ruling in the US Court of Appeals for the 5th Circuit, New Orleans.
Legal experts have said that the law will remain in effect for now, but the invalidation of the landmarklegislation throws into doubt the future of health coverage for millions of Americans on the Obamacare exchanges and in Medicaid expansion, CNN said.
More than 4 million people have already signed up for 2019 coverage on the exchanges and millions were expected to pick plans before open enrollment ends on Saturday.
The case against the ACA was brought by 20 Republican state attorneys general and governors, as well as two individuals.
It revolves around Congress effectively eliminating the individual mandate penalty by reducing it to $0 as part of the 2017 tax cut bill.
The Republican coalition is arguing that the change rendered the mandate itself unconstitutional.
They say that the voiding of the penalty, which takes effect next year, removes the legal underpinning the Supreme Court relied upon when it upheld the law in 2012 under Congress' tax power.
The mandate requires nearly all Americans to get health insurance or pay a penalty.
President Donald Trump, who has always opposed the ACA, immediately celebrated the ruling via Twitter, saying Congress must now act, reports CNN.
"As I predicted all along, Obamacare has been struck down as an UNCONSTITUTIONAL disaster! Now Congress must pass a STRONG law that provides GREAT healthcare and protects pre-existing conditions. Mitch and Nancy, get it done!" Trump wrote.
"Wow, but not surprisingly, ObamaCare was just ruled UNCONSTITUTIONAL by a highly respected judge in Texas. Great news for America!"
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.