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Pending Challenges to Obamacare

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  • Jon Roland
    From a Federalist Society teleforum announcement of 2012/12/13: Additional lawsuits that challenge the implementation of the Affordable Care Act have been
    Message 1 of 1 , Dec 13, 2012
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      From a Federalist Society teleforum announcement of 2012/12/13:

      Additional lawsuits that challenge the implementation of the Affordable Care Act have been filed and remain undecided.  One in particular, filed by the state of Oklahoma, threatens the viability of federal fallback "exchanges" in states that refuse to cooperate with ACA implementation by establishing state-run  exchanges.  According to Stuart Taylor, this suit is "By far the broadest and potentially most damaging of the legal challenges" pending against ACA implementation.  The Oklahoma suit challenges an IRS rule authorizing "premium assistance tax credits" for the purchase of health insurance in federally run exchanges.  According to the suit, the statute only authorizes tax credits in state-run exchanges and the IRS rule exceeds agency authority under the Act.  Furthermore, because of the way the ACA's exchange provisions interact with the rest of the law, the IRS rule will also trigger penalties on employers that fail to offer qualifying health insurance to their employees.  Because as many as 20 states could refuse to create exchanges, the fate of the IRS rule could determine the viability of health insurance exchanges and severely hamper ACA implementation.

      During the discussion, panelist Jonathan H. Adler, Professor of Law and Director of the Center for Business Law & Regulation at the Case Western Reserve University School of Law, made the point that federally run health care exchanges have not been funded by Congress. The IRS-imposed denial of tax credits to people in states without state-run health care exchanges is unlikely to bring in enough revenue to fund the federal exchanges without a congressional authorization of additional funds.

      This points to the way forward for nullificatory resistance to the Health Care Act: (1) Get states to refuse to set up their own health care exchanges, and (2) Get Congress, and in particular the House of Representatives, to refuse to fund federal exchanges. If enough states decline, it could bring down most of the implementation of the Health Care Act, essentially nullifying it.

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