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Okla. AG Asks SCOTUS to Hear Obamacare Subsidies Challenge

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By Mark Wilson, Esq. on November 21, 2014 4:09 PM

Back in September, a federal district judge in Oklahoma, agreeing with a three-judge panel opinion of the D.C. Circuit, held that the Affordable Care Act subsidies applied only to states that had, themselves, established state exchanges and not states in which the federal government had to run the exchange after the state refused.

Well, a lot has happened since then. The D.C. Circuit took its case up en banc, vacating the panel opinion, and the U.S. Supreme Court agreed to hear the challenge in the form of King v. Burwell, a Fourth Circuit case finding the other way.

Now, Oklahoma's attorney general wants to appeal his state's case straight to the Supreme Court.

I Triple-Dog Petition You

Remember that scene in "A Christmas Story" where the kid gets triple dog-dared to lick the cold flagpole before being triple dared? It's kind of like that. Oklahoma Attorney General Scott Pruitt has filed a petition for a writ of certiorari with the U.S. Supreme Court arguing that he should be able to bypass the Tenth Circuit because of the urgency of this situation.

Pruitt argues in the petition, as he did in federal court, that this case is unique. That's sort of true. Oklahoma, as a state entity, is subject to the "large employer mandate." This part of the ACA requires employers with 50 or more full-time employees either to provide health insurance or pay a penalty that goes toward subsidizing purchasers on the state exchange.

Because some state employees don't qualify for health insurance (they're part-time under Oklahoma's standards, but not under the ACA), they have to turn to a state exchange, where the cost of their premiums is subsidized by taxes collecting through that large employer penalty.

Pruitt thinks that hearing Oklahoma's case with King affords the Supreme Court the benefit of hearing from "all types of parties affected by the IRS regulations." The ACA section at issue, he argues, affects four different groups: individuals, the federal government, the states, and large employers. King presents only two of those: individuals and the federal government. But what about the state, which can explain why it didn't want to establish an exchange? Or a large employer, "who will face significant compliance costs and may face crushing penalties as a result of the challenged regulations"?

How Do You Bypass the Tenth?

As a matter of procedure, getting a judgment from a federal circuit court isn't a requirement. 28 USC Section 1254 allows a party to petition for cert. in a case that's in a federal circuit court of appeals "before or after rendition of judgment or decree." Even so, it's a little unusual, as the opinion of a single district judge wouldn't carry as much weight as that of a three-judge panel of appellate judges.

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