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Friday, March 29, 2024

Oklahoma AG challenges federal claims in health care lawsuit

Pruitt

OKLAHOMA CITY (Legal Newsline) -- Oklahoma Attorney General Scott Pruitt is challenging the federal government's claim that the IRS should not follow provisions in the Affordable Care Act.

"The administration miscalculated how many states would support this law, so now they're using the IRS to push through provisions that Congress did not pass," Pruitt said in a statement last week.

"Oklahoma's lawsuit has never been about the policy or politics of the Affordable Care Act; it is about the legality of what the IRS is doing and ensuring that the federal government complies with implementation of its own law."

In a response filed in U.S. District Court for the Eastern District of Oklahoma Friday, the state argues that an IRS rule punishes "large employers," including local government, with millions of dollars in tax penalties in states with federal health care exchanges, which is not allowed under the act.

The rule also violates the Administrative Procedures Act, the complaint states.

"Congress provided a choice for Oklahoma and other states in implementation of the law," Pruitt said. "The IRS is attempting through this rule to take away that choice."

Oklahoma's original lawsuit was filed in January 2011.

Pruitt filed an amended complaint to raise issues related to the law's implementation in September, following the U.S. Supreme Court's decision.

In its highly-anticipated ruling in June, the nation's high court said the controversial provision of the law requiring individuals to purchase insurance or face a financial penalty is a constitutional tax.

The individual mandate imposed a $695 annual penalty on individuals who did not purchase health insurance. Obama's own budget director said the mandate was not a tax.

"The Affordable Care Act's requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax," Chief Justice John Roberts wrote in the Court's 5-4 ruling.

"Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness."

Pruitt, in his 23-page amended complaint, explained that Sections 1311 and 1321(c) of the ACA allow states to choose to establish an "American Health Benefit Exchange" to operate in the state to facilitate execution of the act's key provisions.

"If a state elects not to establish an Exchange under Section 1311, Section 1321(b) authorizes the Secretary of Health and Human Services to create an Exchange to operate in that state," the attorney general wrote.

Along with challenging the new IRS rule, Pruitt is asking the court to recognize that the Supreme Court's designation of the health care act's individual mandate as a tax means it no longer conflicts with Oklahoma's constitutional provision that says no law or rule can "compel any person, employer or health care provider to participate in any health care system."

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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