Kathleen Sebelius, right, secretary of health and human services, Denis McDonough, White House chief of staff, and Valerie Jarrett, a senior advisor to the preesident, prior to Obama's remarks about the Affordable Care Act, at the White House in Washington, Oct. 22, 2013. Sebelius has faced a barrage of criticism for the botched rollout of the online insurance exchange. But the health secretary was far more immersed in developing policy related to the law, and in promoting it, than in the technical aspects of the website, said a person close to the White House and Sebelius.(Photo by Doug Mills/ The New York Times)
Federal judge clears way for court challenge of health law
- Article by: Robert Pear
- New York Times
- October 22, 2013 - 11:07 PM
WASHINGTON – A federal judge cleared the way on Tuesday for consumers to challenge President Obama’s health care law on the grounds that the federal government cannot legally provide subsidies to people who buy insurance through the exchange run by it.
The judge, Paul L. Friedman, of the U.S. District Court in Washington, said that four individuals could pursue their lawsuit challenging the Obama administration’s interpretation of a provision of the law that defines who is eligible for subsidies.
The plaintiffs maintain that such subsidies — tax credits to help defray the cost of health insurance — are available only in states that establish their own exchanges, not in the 36 states where the exchanges are operated by the federal government.
The plaintiffs are from states using the federal exchange. The subsidies make insurance more affordable for them. Without the subsidies, they say, insurance would be unaffordable, and they would be exempt from the requirement to carry insurance.
Opinions polls show that the requirement, often called an individual mandate, is one of the less popular provisions of the 2010 law, the Affordable Care Act.
A rule issued last year by the Internal Revenue Service says that tax credits are available to low- and middle-income people in every state, regardless of who operates the exchange.
Michael A. Carvin, a lawyer for the plaintiffs, said the rule flew in the face of the law written by Congress. He pointed to a section of the law that allows subsidies for people who enroll in health plans “through an exchange established by the state.”
Under the law, people who go without insurance next year may be subject to tax penalties. Friedman rejected the Obama administration’s argument that he should dismiss the lawsuit and require the plaintiffs to pay the tax penalty and seek refunds.
“This is a final agency rule,” Friedman said. “It’s beginning to affect people now.”
One of the plaintiffs, David Klemencic, was involved in a separate case in which the Supreme Court last year upheld the health care overhaul law, including its requirement for most Americans to have insurance.
Reached at his retail carpet store in Ellenboro, W.Va., Klemencic said he was pleased that Friedman had allowed his lawsuit to continue.
“I don’t feel I need health insurance,” Klemencic said. “I pay my own health care bills and always have.”
© 2013 Star Tribune