Pruitt v. Sibelius

Let me see if I can explain in man-in-the-street terms the lawsuit OK has going against Obamacare.

The Affordable Care Act (ACA or Obamacare) specifically states that the federal government can only give subsidizes (in the form of tax credits) if the state has set up an exchange.  Oklahoma declined to set up an exchange.  But Obama says that the feds will do it anyway once they set up a federal exchange within the state.  Attorney General Pruitt objected saying that the federal government cannot do this since it is forbidden by the Act. 

 

So why did OK decline?  The answer is that the feds learn of a business not providing health care if an employee applies for a subsidy with an exchange.  The employer gets socked with a $2000 penalty.  But there may be many reasons for an employee applying.  The employer may carry insurance but not what the employee wants.  The employee may do it out of stupidity.  Or he might do it fraudulently.  Medicare and Medicaid have some of the highest fraud rates of any government program.  Some state show 20+% of payments are fraudulent.  And considering the latest Obamacare deadline postponement with people being asked an unaccounted income, is almost certain to create massive fraud.  So what happens if your $90,000 employee goes into an exchange and swears he makes $25,000 a year in order to get a huge subsidy rather than paying half the premium at work? 

 

The upshot is that businesses get hammered with penalties and often will be hammered unfairly. It would kill a state’s economy and may play havoc with certain industries.  That is why 34 states decided to not do exchanges and only 16 very blue states decided to play along with Obamacare.  And so Pruitt v. Sibelius moves along it’s path to the Supreme Court.  Holder tried to argue in another case that since the business mandate was being postponed, the lawsuit should also be postponed.  The 4^th Circuit Court last week slammed this idea saying that it had become even more imperative to have a decision on Pruitt. 

 

It could get interesting.  If OK wins, Obamacare, if not dead is mortally wounded.