A federal judge in Oklahoma ruled Tuesday that Obamacare’s subsidies can only be paid in a fraction of states, signaling the latest legal problem for President Obama’s health law.
U.S. District Court Judge Ronald A. White sided with Oklahoma State Attorney General Scott Pruitt, who said the way the Affordable Care Act was written means that subsidies, in the form of tax credits used to pay premiums, can only be paid to residents of states that set up their own exchanges, rather than those relying on the federal exchange and the HealthCare.gov portal.
The ruling, from a federal district court, follows split decisions over the summer from federal appeals courts, and increases pressure on the Supreme Court to step in.
“The court holds that the IRS Rule is arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law,” Judge White wrote in his order.
Tuesday’s ruling emboldened those who say the Obama administration misinterpreted its own health care law.
“Attorney General Scott Pruitt’s case has exposed that Obamacare is more than an unsecured website to shop for more expensive health care, but that it is also a big-government bureaucratic program that is eroding states’ rights,” Sen. James Inhofe, Oklahoma Republican, said.
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The administration says Congress didn’t intend to distinguish between states that set up their own exchanges versus those that rely on the federal government when the health care law passed in 2010.
The stakes are high for Mr. Obama’s signature law. If subsidies no longer flow to two-thirds of the states, coverage will become unaffordable to many, making the law much less attractive.
Judge White, who was appointed to the bench by President George W. Bush, recognized the gravity of the case before him, but noted that challenges to federal regulation are “a commonplace occurrence in this country, not an affront to judicial dignity.”
He said his decision does not “gut” or “destroy” anything.
“On the contrary, the court is upholding the act as written,” he wrote. “Congress is free to amend the ACA to provide for tax credits in both state and federal exchanges, if that is the legislative will.”
The issue has already climbed far beyond the federal district courts.
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A pair of federal appellate courts, the U.S. Court of Appeals for the District of Columbia Circuit and the Fourth Circuit in Richmond, came down on either side of the issue over the summer.
The losing side in the Fourth Circuit case, who say the subsidies should be limited to certain states, asked the Supreme Court to review their case, King v. Burwell.
Meanwhile, the D.C. Circuit has granted the Obama administration’s request to reconsider its panel decision against them through an “en banc” review with a larger slate of judges.
That case, Halbig v. Burwell, is scheduled for oral argument on Dec. 17.
Legal analysts say if the D.C. Circuit reverses course and finds in favor of the administration, the Supreme Court may be less willing to take up the case, as there will no longer be a split.
Those challenging the administration say that’s not necessarily so, and have noted there are additional cases winding their way through the federal courts.
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.
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