Two federal appeals courts handed down conflicting rulings on Tuesday over President Obama's signature health care overhaul. One decision upheld a victory for the health law, but the other was a major blow.

The first decision, handed down by a D.C. Circuit Court of Appeals, delivered a serious setback to the Affordable Care Act (ACA) or "Obamacare", and could potentially uproot the system which grants billions of dollars in subsidies for millions of Obamacare recipients.

In a 2-1 decision, the court ruled that participants in health exchanges run by the U.S. government in the 34 states that opted out of the plan are not eligible to recieve billions of dollars in tax subsidies.

The ruling will be appealed by the government, but it could present a major disruption for the 5 million Americans without employer-provided health plans.

"Because we conclude that the ACA unambiguously restricts the section 36B subsidy to insurance purchased on Exchanges 'established by the State,' we reverse the district court and vacate the IRS's regulation," the court stated in its ruling, according to The Hill.

"We reach this conclusion, frankly, with reluctance," Judge Thomas Griffith said. "At least until states that wish to can set up exchanges, our ruling will likely have significant consequences both for the millions of individuals receiving tax credits through federal exchanges and for health insurance markets more broadly."

Judge Harry Edwards, the only judge to dissent, said the challenge is "a not-so-veiled attempt to gut the Patient Protection and Affordable Care Act" and warning that the panel's ruling "portends disastrous consequences."

Subsequently, a separate federal appeals court panel in Richmond, Virginia voted to uphold the law and its system of subsidies and tax credits.

"If there is a split in the circuits, then I think the Supreme Court would have to step in," said Elizabeth Wydra, chief counsel at the liberal Constitutional Accountability Center, according to USA Today.

As a result of the split decisions, the case may be tried in the Supreme Court, and could ultimately end in a fatal blow to President Obama's healthcare law.