Oklahoma Lawsuit Could Derail Obamacare
A judge in Oklahoma is allowing a lawsuit by the state against Obamacare to proceed in what is one of dozens of legal challenges to the health care reform that are still filtering through the court system.
The state is arguing in Pruitt v. Sebelius that a mandate in the Affordable Care Act that large employers offer health insurance to employees or pay a penalty should not apply to states that declined to set up their own health care exchanges.
The federal government had attempted to have the suit dismissed by arguing that the plaintiffs had no standing to challenge the law. U.S. District Judge Ronald White saw it differently.
“The court finds plaintiff has made sufficient plausible allegations supporting standing for the state of Oklahoma in its capacity as a large employer,” he ruled.
The argument is derived from a close reading of the 2010 health care law which found language that some have argued means that the rules for federal authority are different depending on if the state set up its own exchange, vs. those that did not and let Uncle Sam implement a federally-run exchange instead.
“We’re optimistic the court will recognize what states have known for months that the IRS disregarded the law by making the large employer mandate effective in Oklahoma or in any of the 33 other states without a state health care exchange,” Oklahoma Attorney General Scott Pruitt told the AP.
The suit also challenged the individual mandate requiring that almost all citizens purchase health insurance or pay a penalty, but the judge did dismiss that claim, following the precedent of the U.S. Supreme Court decision last year that the mandate could remain in the law as a tax.
A Single Jot or Tittle
The lawsuit is considered one of the more likely to create serious problems in the implementation of the ACA.
“It’s technically not correct to say that Oklahoma’s complaint is a challenge to ObamaCare,” writes Michael F. Cannon, one of the attorneys who wrote the legal paper on which the lawsuit is based. “That complaint does not challenge a single jot or tittle of the statute. Oklahoma is asking a federal court to force the IRS to follow the statute, and to prevent the Obama administration from imposing taxes on Oklahoma residents whom Congress expressly exempted.”
If the lawsuit is successful, it means that employers in 33 states that don’t offer health insurance will face no financial penalty, leaving their employees on their own for insurance. In theory, they could just log onto an exchange and purchase an individual plan of their choosing, complete with federal tax credits if their income falls below a certain threshold.
However, due to a related lawsuit challenging the tax credits themselves in states that didn’t set up their own exchanges, the litigation could end up keeping health care expensive and out of reach for individuals who live in the states in question.
“If the statute means what it says, Obamacare’s machinery simply doesn’t apply in half the country,” George Mason University Law Professor Michael Greve told California Healthline. “This is for all the marbles.”
Numerous other lawsuits challenging Obamacare are also still in litigation. Among them are suits that attack the law’s provision that most employer health plans provide contraception, and one that asserts that it is unconstitutional for a Medicare advisory board to make binding cost-saving recommendations, claiming it takes too much power away from Congress.