American Journal of Law & Medicine

Oklahoma Establishes Standing to Challenge the Affordable Care Act: District Court Says IRS Rule May Injure Oklahoma as an Employer-Oklahoma Ex. Rel. Pruitt V. Sebelius

Oklahoma Establishes Standing to Challenge the Affordable Care Act: District Court Says IRS Rule May Injure Oklahoma as an Employer--Oklahoma ex. rel. Pruitt v. Sebelius (1)--Judge Ronald A. White from the Eastern District of Oklahoma dismissed two parts of Oklahoma's challenge to the Affordable Care Act (ACA), but found that the State did have standing to pursue three others, including the charge that so-called "employer mandate" (2) penalties cannot be enforced in states that decline to create their own health insurance exchanges. (3)

To facilitate the purchase of affordable health insurance, the ACA offers premium tax credits, or subsidies, for uninsured individuals with incomes below 400% of the federal poverty level. (4) For an individual to request and receive these premium tax credits, he must enroll in a health insurance plan offered through a health insurance exchange or marketplace (Exchange). (5) The ACA planned for these Exchanges to be state-run, but included a provision for the Federal Government to establish and operate a state's Exchange if that state declined to do so for itself. (6) As of 2014, Oklahoma is one of twenty-seven states that will default to a federally managed Exchange. (7)

The Attorney General of Oklahoma, Scott Pruitt, filed suit challenging the Internal Revenue Service's (IRS) statutory interpretation of section 1311 of the ACA, which deals with the implementation of tax subsidies for those enrolled in certain health insurance plans. (8) Oklahoma, relying on language in the ACA that describes eligible taxpayers as those enrolled in "an Exchange established by the State under section 1311 [of the ACA]," (9) claims that the tax subsidy is not available in states with federally created Exchanges. …

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