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OK District Court: No Subsidies on Federal Exchanges

OK District Court: No Subsidies on Federal Exchanges

We’re knock-knock-knocking on the Supreme Court’s door.

In case you haven’t noticed, the Affordable Care Act has been the subject of multiple lawsuits since its inception; most recently, states have gone to the courts to challenge an IRS rule providing federal subsidies on the Obamacare health care exchanges.

A district court in Oklahoma is the latest federal court to steamroll the federal government’s argument—and the judges who decided to allow it:

Noting that Obama administration wants to issue Exchange subsidies in states with federal Exchanges even though the PPACA (quoting Halbig) “unambiguously restricts the [Exchange] subsidy to insurance purchased on Exchanges ‘established by the State,’” Judge White argues that the government’s interpretation (quoting the Tenth Circuit in Sundance Assocs., Inc., v. Reno) “leads us down a path toward Alice’s Wonderland, where up is down and down is up, and words mean anything.” As evidence, White quotes the concurring opinion in King: “‘[E]stablished by the State’ indeed means established by the state – except when it does not[.]”

White dismisses the Halbig dissent, which argues “established by the State” is a “term of art that includes any Exchange within a State.” White responds: “it is an unusual term of art, in that one word is statutorily defined in a way that precludes the alternative reading. Under [the Act’s definition of ‘State’], ’State’ cannot mean the federal government. This definition is dispositive when combined with the interpretive hurdle presented by the phrase ‘established by.’”

It’s normal for the Supreme Court to wait until there emerges a clear Circuit split before taking up a high profile question like the one presented in Halbig and Pruitt, but considering the circumstances, I don’t think it’s likely they’ll wait that long. 36 states declined to establish federal exchanges; as the law was originally presented, that should have saved the American people 36 states’ worth of taxpayer dollars.

The IRS rule, however, has given the federal government an excuse to come in and impose taxes and other expenses on those 36 states in addition to the other 14 who decided to go along with the Obama Administration’s plan.

This issue goes beyond covering one particular type of birth control, or one particular type of elective procedure; millions of dollars are currently at stake in states where the people have already spoken out against federally-subsidized exchanges.

Attention must be paid.

Gabriel Malor over at Hot Air has some interesting perspective on the 10,000 foot view of the legal challenges to Obamacare:

…Let’s be honest, though, this is a pretty rare case. It would not only bring the Obamacare subsidies to a halt in most states, but it would also end the employer mandate in any state that did not establish its own healthcare exchange. That’s the ball game for Obamacare, which is why partisans are getting so screechy about this case. This is another example, btw, where Obamacare supporters started by laughing off the lawsuit and slowly realized that perhaps things weren’t so funny after all.

Seeing as how Obamacare is crumbling, and Democrats are fumbling the ball at every turn, I would support the Supremes’ decision to take up this issue sooner rather than later. I’d rather have a mandate from the bench to deal with than a slapdash “fix” from an administration that is already running a sloppy and increasingly-panicked defense.

Phil Kerpen has the full opinion uploaded here:

Pruitt v. Burwell District Court Order by Phil Kerpen


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Humphrey's Executor | September 30, 2014 at 5:53 pm

The Obamacare gal is looking a little worried here:

JackRussellTerrierist | September 30, 2014 at 8:20 pm

Well, there’s one appellate decision fer and one agin. Now a district court is agin, headed to appellate court.

When might SCOTUS get this, assuming they grant cert? When will the madness end? Next June, perhaps?

“36 states declined to establish…”

Don’t forget that several states that attempted to establish an exchange have since abandoned them and gone on the federal exchange.

Can someone tell me if district court rulings carry any weight with the Supreme Court? I noticed that none of the legacy media touted the story.

    Ragspierre in reply to PhillyGuy. | October 1, 2014 at 10:07 am

    Well, they aren’t binding on the Court, for sure. But a well-reasoned and written ruling often makes it into the majority opinion in one form or another.