Government Watch / Opinion

ObamaCare’s Next Legal Challenge

The law says subsidies can only go through state-run exchanges – 


As millions of Americans see their health-insurance premiums increase, have their coverage dropped as a result of the Affordable Care Act, and are unable to use the federal exchange, Oklahoma has sued the Obama administration. The Sooner State and several others are trying to stop the government from imposing tax penalties on certain states, businesses and individuals in defiance of the law. If these legal challenges are successful, the deficit spending associated with the new health-care law could be reduced by approximately $700 billion over the next decade.

While the president’s health law is vast and extraordinarily complex, it is in one respect very simple. Subsidies are only to be made available, and tax penalties for not signing up for health insurance are only to be assessed, in states that create their own health-care exchange. The IRS, however, is attempting to enforce tax penalties in all states—including Oklahoma and the majority of the other states that have declined to create their own exchanges. Citizens and businesses in these states must use the federal exchange instead.

The distinction is critical, because under the terms of the law it is the availability of government insurance-premium subsidies that triggers the penalties against businesses if they fail to provide their employees with health insurance that the administration deems acceptable. This is a huge problem for the administration, which desperately needs to hand out tax credits and subsidies to the citizenry to quash the swelling backlash against the law.

When Oklahoma first raised this challenge in 2012, many experts predicted that the Sooner State would “go it alone” in pursuing this legal strategy. Not so. In Indiana, the state and 15 school districts have filed a lawsuit against the IRS, the agency that collects the penalties. Business owners (who, like the state of Oklahoma, would be subject to penalties as employers) and individuals in Virginia and the District of Columbia have done the same. In the D.C. lawsuit, the presiding judge recently rejected the Obama administration’s attempt to have the case dismissed, as the judge in the Oklahoma case did in August.

Motions for summary judgment will soon be filed in federal district courts, and our court system will determine whether what the administration has called its “improvements” to the ACA—essentially by ignoring some of its provisions—are lawful.

They are not. Congress was exceedingly clear that tax credits and subsidies are available to people whose plans “were enrolled in through an exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act.” Even so, the administration argues that Congress intended for all Americans to receive subsidies regardless of whether they enrolled in health-care coverage through a state exchange or a federal exchange. But to arrive at that conclusion you have to ignore the plain language of the law. And nowhere in the law did Congress authorize the IRS to provide the credits or subsidies to those other than citizens who buy their insurance through an exchange established under section 1311 of the ACA—i.e., a state exchange.

Congress specified that credits and subsidies are only to be available in states that set up their own health-insurance exchange for a reason: It could not force states to set up exchanges. Instead, it had to entice them to do so. Oklahoma’s lawsuit is about preserving the state’s authority to make a policy decision granted to states under the Affordable Care Act. Our governor and policy makers in Oklahoma decided it wasn’t in the state’s best interest to create a health-care exchange. The IRS, at the administration’s bidding, is attempting to take away the benefits of that choice by regulatory action. Such attempts to expand the power of the executive branch should be troubling to all Americans.

While much time has been devoted in Washington to the issue of “defunding” the Affordable Care Act, the success of these lawsuits would have much the same effect. Should the courts decide the IRS is exceeding its authority and isn’t allowed to assess the employer penalties in states that have not established their own exchanges, the structure of the ACA will crumble—as one of the primary mechanisms the federal government has employed to force people into the health-insurance market evaporates.

As much as we wish the government were run like a business, the administration cannot “improve” upon legislation passed by Congress by rolling out updates in the manner that Silicon Valley does. That’s not permitted under the Constitution: Congress passes laws, the president executes them. Period. That’s why Oklahoma and other states are fighting to stop the administration’s attempt to “fix” the health-care law through executive fiat.

Mr. Pruitt is the attorney general of Oklahoma.

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6 years ago

MTZ: Obama doesn’t want his name on it because he is a shallow, egotistical person & since the website totally failed on rollout he does what he always does, spins a change to divert anything negative away from himself.

6 years ago

Please call ACA by its “correct” name – OBAMACARE.

Obama, the Democrats & the Liberal media are trying very hard to portray it as the “Affordable Care Act”. After the website debacle, Obama said he doesn’t like that name (although he was ok with it before the rollout). He now doesn’t want his name on it.

grammie s.
6 years ago

According to Rep. Chris Smith, Pres, Obama violated pro-life laws and is providing taxpayer funding for insurance plans that include abortion. In 2009, Obama stated, as per law, no federal dollars will be used to fund abortion. As of today, of the 112 Obama Care plans for congress and staff, 103 are pro-abortion! As Rep. Chris Smith stated, “Abortion is NOT health care; it kills babies and harms women”.

Seems Pres. Obama needs to once again be held accountable!!

6 years ago

Just got a letter from our health insurance. Our premiums are going up immediately and our Medicare benefits have been reduced. Thank You Mr. Obama for the fine mess we are in. Your plan to destroy our health care system and our nation is working beautifully and right on schedule.

Professor Fate
6 years ago

Short of an armed insurrection and takeover of the government, our only hope of overturning this vile Obamacare Act is through the courts. Of course, Obama and Company have shown a fine disregard for the rule of law on numerous occasions aided and abetted by Liberal Democrats and a corrupt Attorney General so even court actions may be in vain. If we don’t gain veto proof Conservative control of both houses of Congress, it will be a dark day for this country which was founded on freedom and is now watching it dribble away.

6 years ago

NICK! I strongly agree with your comments and I would encourage anyone here who wants to know more of the truth about what Obama, The federal reserve, the International Monetary fund and World Bank, pick up a copy of G. Edwards Griffin’s well-documented book entitled “The Creature from Jekyll Island.” This is the island where the nation’s richest bankers met secretly in 1910 to form the federal reserve. And it’s been downhill since that fateful day. After reading this book, I can only agree with the readers here about how important it is to run every career Politician out of… Read more »

Frozen Sooner
6 years ago


The only way to “right” this ship is to hold your nose and vote Republican. I know many can find plenty of fault with the Republicans, including me. However, the Republicans never tried to imprison people for abiding by the Constitution.

It’s called freedom, and you are losing it every stroke of the minute hand with Democrats in charge.

Alfred L. Kreps
6 years ago

There are just too many inept sick minded egoists sitting in the seat of congress, the Executive and to many life time job holders eating off the taxpayer funded trough in Washington.

Janice Pritz
6 years ago

I appreciate all of the opinions and intelligent comments I read here. Let us keep the faith. We must continue to use our voices and keep telling the truth. Our raised voices and our votes will prevail…I love this country!

Field General Yerassmus B. Brown
6 years ago

Short of shooting the messenger (Barry), how are we going to get rid of this cancer? The congress has to many career politicians to be able to deal with this crisis and the senate is a total waste of time. With that said, what is the military doing? They are our most plausible agents with the ability to proceed in the direction of making Washington DC do the right thing.

6 years ago

I’m from Oklahoma, and have seen what Government has done to Native Americans. Obama has been working on the same style of dependency for the rest of the Americans who stand with their hands out, accepting his EBT cards, free cell phones, Welfare, unemployment benefits for 4 + years, easy SSDI; and whatever else they can squeeze out. I won’t be surprised to see the word “independent” removed from the dictionary soon. His “law” wasn’t struck down by the (fixed) Supreme Court because they know it’s a ruse to get Single Payer government run health care. Plain and simple. Senator… Read more »

Nick Athanitis
6 years ago

Obama is a Communist. He is fundamentally changing the the country as promised.His target is to destroy the middle class. The people he is working for include the Federal Reserve and a number of Billionaires who want to rule the world. God help us.

Disruptive Element
6 years ago

If the majority refuses to take part-what could they do-nothing………………be brave.

Jeff Kedzior
6 years ago

In my opinion it’s time for term limits on all elected officials to stop the career politicians from ruling the roost. I’d back up the buses and load up the 535 inept members of Congress & POTUS & VP and cart them off to prison where they belong and start over. Government is not the solution it’s the problem. Merry Christmas.

Richard Palais
6 years ago

I am so very much against EVERYTHING Obummer ( which is what I refer to him as) has done since his first illegal day in Office. Why illegal? Simple answer. HE WAS NOT BORN IN THE USA! Regardless of what his phony fake so called birth Certificate shows, HE WAS NOT BORN HERE! Period! This alone, made him ineligible to be President. Period. His former College ID cards ALL SHOW HIM as a “Foreign Student”. There is more and more evidence coming up proving that he is not entitled to even have been elected as President. Now one of the… Read more »

Gene Chase
6 years ago

The Affordable Care Act is not only unconstitutional, it’s a “Black Hole.” It’s counting on the money from younger people signing-up to fund it. Since all are allegedly covered for preexisting conditions why would anyone sign-up until they discover that they have a serious illness like cancer?

Richard Rodriguez
6 years ago

A tidbit IRS cannot collect the penaly/tax through levy or other collection means except if a taxpayer is due a tax refund at which time the penalty could be deducted from that amount. Just the refusal to pay the tax is enough. In other words if tax is owed just pay the total due (including penalty) minus the penalty and IRS cannot colelct. The entire laws smells of unaffordability! Now convince a young person who pays for no health insurance to pay (subsidize)the cost for those with preexisitng conditions. obamacare is already crumbling!

David Burke
6 years ago

Everything that is going on is because there are more idiots voting for these traitors than people with common sense.

William E. Ruff
6 years ago

We owe it to our founding Fathers who were wise,godly and American. They gave their all that America might be The Great Free Nation it has been. We must teach our children and grandchildren our history. They are brite young people that want to and will do what is right, if we will take time to invest and teach them. They need us to teach them the who,what,when,why any how America became the wonderful free country it has always been. America was established by the people, for the people. United We Stand- Divided We Will Fall. We must be educated,… Read more »

6 years ago

One very subtle fact about suppression is that people who engage in it can’t complete anything. A fact Obama and his liberal buddies validate repeatedly…Semper Fi

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