Oklahoma is suing the federal government, using the plain language of the 2,000-page bill that no one read:
Point one: The ACA offers tax credits and subsidies to individuals and companies that buy insurance through a state-run exchange — if their state has set up such an exchange. Point two: The federal government establishes exchanges for states that do not set up their own. Point three: The section of the ACA that establishes these credits and subsidies says they are authorized only for exchanges “established by a state.” (Michael Cannon of the Cato Institute and Jonathan Adler of Case Western Reserve University Law School first noticed this provision of the ACA; the law’s defenders say it is a minor drafting error that courts will and should overlook.) Point four: The ACA also imposes fines and penalties on individuals who do not buy health insurance, and on businesses that do not buy it for their employees. (Insurance under Obamacare will be significantly more expensive than regular insurance, which is why they have to pay you to buy it and fine you if you don’t.)
Now we get to point five, which is the real crux of the argument: The ACA specifies that these fines or penalties apply only to individuals or companies that are eligible to receive the tax credits and subsidies. Conclusion: If a state chooses not to set up an exchange of its own, residents of that state are not eligible to receive tax credits or subsidies for buying insurance, so there can also be no fines or penalties for not buying insurance, even if there is a federally run exchange in the state. In other words, the individual and employer mandates are nullified in that state.
So, if a state wants to nullify the Obamacare individual mandate, it could simply not set up a state-run exchange to buy insurance. Individuals in the state could still use the federal exchange, if they wanted to.
UPDATE: Some commenters may be misconstruing this. To clarify: There is a loophole in the law, according to which, anyone who lives in certain states is not subject to penalties for not buying health insurance. i.e. In those states, according to the law itself, there is no individual mandate. The rest of the law still stands, until people find more loopholes to eviscerate other provisions.