The charge of murder stands however when Mangione made his first appearance in court on Tuesday since February.
To classify something as terrorism requires more than the perpetrator having ideological motives, notes the judge.
"Even if the suspect has clearly expressed hostility towards UHC, and towards the health insurance industry in general, it does not mean that his goal was to 'instill fear and influence a civilian population' and evidence of such intent has not been presented either", he writes in his decision.
Preliminary hearings before the trial will be held on December 1, the judge further decided.
Two prosecutions
In addition to the prosecution in the state of New York, Mangione is also accused in a case driven from a federal level where the prosecutors are seeking the death penalty. His defenders have argued for the principle that their client should only be subject to one prosecution at a time.
But the judge in New York dismissed the objection with reference to it being too early to determine if the double prosecutions imply any impropriety.
The murder of Brian Thompson outside a hotel on Manhattan at the beginning of December last year received great attention.
Politically motivated
Mangione managed to escape and made his way to Pennsylvania, where he was discovered by chance by police and arrested at a McDonald's restaurant in the city of Altoona.
He was carrying a notebook that expressed hostility towards the health insurance industry and particularly towards the rich executives who, according to Mangione, profited from people's suffering.
From certain quarters in the USA, Mangione has been praised and at his various court appearances, supporters have gathered to show him their support. On Tuesday, the crowd of supporters outside the courthouse could be heard cheering when they received the news that the terrorism charge had been withdrawn.
