Oklahoma Rebuts U.S. in State’s Challenge to Health-Care Act

Oklahoma opposed a request by the U.S. that a judge dismiss the state’s lawsuit challenging President Barack Obama’s 2010 health-care reform legislation.

The U.S. District Court in Muskogee, Oklahoma, has the authority to determine whether the state is “injured” by the federal government’s disregard for a 2010 amendment to the state’s constitution barring bar any rule or law that compels a person, an employer or health-care provider to participate in a health-care system, Attorney General Scott Pruitt said in a filing with the court today.

Federal tax rules on the establishment of health-insurance exchanges to make coverage available for Oklahoma residents deprive the state of an “important sovereign choice” by “requiring it to provide federally-approved health insurance to all full-time employees -- or risk onerous penalties,” according to the filing.

Pruitt, a Republican, sued in January 2011, about 10 months after the president signed into law the Patient Protection and Affordable Care Act that made the acquisition of basic health insurance mandatory for almost all Americans. That part of the law takes effect in 2014.

The U.S. Supreme Court in June upheld most of the federal health-care law, including the purchase mandate, which it deemed a valid exercise of Congress’s power to levy taxes.

Last month, the U.S. argued the state lacks standing to sue the federal government to deprive its residents of the benefits of the federal law. The Obama administration contended in its filing that, without a health-insurance exchange, about 380,000 Oklahoma residents would forgo tax credits worth an average of $5,000 a person and some large employers that don’t offer qualifying coverage would face tax penalties.

A Justice Department representative didn’t immediately return a call after regular business hours seeking comment on today’s filing.

The case is State of Oklahoma v. Sebelius, 11-cv-00030, U.S. District Court, Eastern District of Oklahoma (Muskogee).

To contact the reporter on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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