Will Oklahoma destroy Obamacare’s individual mandate?

December 6, 2012

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.

7 Responses to Will Oklahoma destroy Obamacare’s individual mandate?

  1. ip727 on December 6, 2012 at 7:51 am

    With roberts turned,there is little chance we can overcome this goatrope. Whatever obammer had on roberts, is still there. The other 4 would be more than happy to have another crack st this craplaw.

    • Jim,MtnViewCA,USA on December 6, 2012 at 8:31 am

      And in another 4 years, the SC will have become 3-6 against.
      That pathway is closed.

  2. Obama's Speech Coach on December 6, 2012 at 9:27 am

    I for one welcome our new insect overlords. http://www.youtube.com/watch?v=Du0d8QxlSYk

  3. BIll on December 6, 2012 at 10:54 am

    I think it should be ended but on the other hand Ithink we should let it go for a year or two first so people can see what a mess it is.

    • Rafael on December 6, 2012 at 11:25 am

      It will run a year before the case gets before the case is settled in courts. Anything could be considered a “drafting error”, when it contradicts what was stated. I hope this works and we be freed of this mess.

    • DrDog on December 6, 2012 at 2:59 pm

      By then the damage will be done I am afraid. There is nothing more perpeutal that a government agency.

      We are already seeing the effects of this mess as service industries dabble with part time staff, buddy work and the like. All of them trying to get below that mythical 50 FTE number.

  4. Thanks for the auspicious writeup. It in reality was once a leisure account it. Glance complex to more delivered agreeable from you! However, how could we keep up a correspondence?