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Oklahoma’s lawsuit over Affordable Care Act divides opinion

Filed by KOSU News in Feature.
September 18, 2013

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The following was written by KOSU’s Quinton Chandler.


It’s been said Oklahoma’s challenge to the Affordable Care Act is the best hope ACA detractors have to stop the health care overhaul in its tracks. The suit doesn’t challenge the law directly. It focuses on the implementation of a single rule the IRS issued after the Act passed through Congress – a rule the State Attorney General says contradicts the law and bypasses Congress. 

Attorney General Pruitt told me the spirit of the state Challenge is simple. When the Affordable Care Act passed Congress it provided for federal subsidies or tax credits to individuals with incomes between 100% and 400% of the poverty line. Pruitt argues those tax credits only go to people in states that chose to set up a state run health care exchange.

“Oklahoma has chosen not to set up an exchange and one of the consequences is that the subsidies that flow under the Affordable care Act… Section 1401 of the law says that they are only issued through a State Health Care Exchange.”

But, it’s not so much the subsidies that the State wants to avoid. It’s a mandate attached to them by a clause in the law, almost like an invisible string. Basically if a state gets these subsidies businesses could be left open to some expensive penalties.

“Because the way the law works let’s say a company has 600 employees and the state has set up a state health care exchange.”

“If the employer does not provide the minimum essential coverage for one employee that might qualify for a subsidy the business would be hit with $1,200,000 in penalties.”

The AG argues that these very issues are part of the reason our Governor and Legislature decided it would be in the state’s best interest not to set up a state run exchange.

“The IRS has said that we’re going to allow the subsidies and of course the corresponding penalties to be assessed in Oklahoma which goes against the plain reading of the statute.”

Professor Timothy Jost with Washington and Lee University says Pruitt’s points aren’t very compelling. He says the Federal government’s counter arguments will likely be very straight forward.

“To reach this result you have to read two little clauses in the statute completely in isolation from the rest of the statute and that’s just not the way courts interpret statutes. They’re going to look at the entire statute. They’re going to look at the structure of the statute….”

Jost says hundreds of pages of legislative record don’t support the argument Congress never thought federal exchanges could not issue tax credits. And he points to the fact that no other state has joined the suit as a red flag.

“A lot of people who have taken a look at this statute believe that the lawsuit has very little chance of succeeding. As Justice Scalia once said, ‘Congress doesn’t hide elephants in mouse holes.’”

But, Pruitt sees it differently. He says this rule is an example of a breakdown in the structure of government.

“Because what separates us from the rest of the world are these checks and balances. We have something bigger than men and women we have something called rule of law that constrains them. These are matters that go to the heart of what the constitution says.”

According to the AG, the Obama administration is overreaching its authority by using an agency to force its will on states.

“I think it’s nonsense Congress clearly intended federal exchanges to have all the same authority as state exchanges.”

“The Obama administration interpreted the law exactly as Congress intended and I don’t know of a single Congressman who has said anything to the contrary.”

Those are the arguments who’s right, and who’s wrong will get hashed out in court. If the state wins….

“There will be a precedent in place that will forbid and prevent the IRS from assessing the employer mandate penalty in those states which will cause the very structure of the Affordable Care Act to fall.”

“It would basically destroy the health insurance market in Oklahoma.”

To explain that bombshell Jost says a state win will mean fewer people will be penalized for not buying health insurance. Plus most Oklahomans won’t have those tax credits to help them make the payments.

“And basically no sane insurer would sell insurance under those circumstances in the individual market.”

“It would deny many many Oklahomans access to health care. I just cannot imagine why he’s bringing this lawsuit.”

Pruitt defends the suit as a way to uphold the integrity of our laws and he says he’s protecting something we should all care about. A state’s right to decide what is best for its people.

3 Responses to “Oklahoma’s lawsuit over Affordable Care Act divides opinion”

  1. Seneca says:

    Do you have a case number or caption for the attorney general's lawsuit described above?

  2. LuvLoogie says:

    Yes Oklahoma. You will be dragged kicking and screaming into this century as well.

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