Federal judge in Oklahoma rules no tax subsidies without a state run exchange.

Posted by on September 30, 2014
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A federal judge in Oklahoma has ruled against the Obama Administration in a case challenging the federal Dept. of Health and Human Services decision to extend tax subsidies to states without a state health insurance exchange.

The decision comes on the heels of several other rulings, including the opinion of the D.C. Circuit in Halbig v. Sebelius.

Much of the discussion in political and legal circles have centered on the phrase in the ACA legislation that requires the taxes to be levied to pay for subsidies on exchanges “established by the State”. ObamaCare supporters have argued that the intent of the legislation should override the actual language, while detractors have said the legislation prohibits federal rules from extending the tax subsidies to states unless the state has set up an insurance exchange.

This ruling agrees that the federal government may not extend tax subsidies in a federally administered exchange and must only do so through the state.

The case, Pruitt v. Burwell, was decided by District Judge Ronald A. White of the Eastern District of Oklahoma. White’s ruling had strong words for other courts that “rewrite legislative compromises”.

The ruling stated:

Of course, a proper legal decision is not a matter of the court “helping” one side or the other. A lawsuit challenging a federal regulation is a commonplace occurrence in this country, not an affront to judicial dignity. A higher-profile case results in greater scrutiny of the decision, which is understandable and appropriate. “[H]igh as those stakes are, the principle of legislative supremacy that guides us is higher still. . . This limited role serves democratic interests by ensuring that policy is made by elected, politically accountable representatives, not by appointed life-tenured judges.”

This is a case of statutory interpretation. “The text is what it is, no matter which side benefits.” Such a case (even if affirmed on the inevitable appeal) does not “gut” or “destroy” anything. On the contrary, the court is upholding the Act as written. Congress is free to amend the ACA to provide for tax credits in both state and federal exchanges, if that is the legislative will. As the Act presently stands, “vague notions of a statute’s ‘basic purpose’ are nonetheless inadequate to overcome the words of its text regarding the specific issue under consideration.” It is a “core administrative-law principle that an agency may not rewrite clear statutory terms to suit its own sense of how the statute should operate.” “But in the last analysis, these always-fascinating policy discussions are beside the point. The role of this Court is to apply the statute as it is written – even if we think some other approach might ‘accor[d] with good policy.’”

ANM News will have more reaction to the ruling throughout the week.


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Keith Plunkett

Keith Plunkett

Keith Plunkett is a journalist and policy writer for ANM News. He is sought after in his home state of Mississippi as a political consultant for his skills as a communications strategist. He has worked on communications and policy issues with a range of public officials from aldermen to Congressmen, and a variety of businesses, governmental agencies and non-profits for nearly 15 years. He serves or has served as a board member of several non-profit, civic and political organizations.