Oklahoma AG Challenges Federal Health Care IRS Claims

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The nation’s health care law does not authorize the Internal Revenue Service to adopt a rule that the federal government claims is needed to implement the statute, Oklahoma Attorney General Scott Pruitt argued.

Pruitt made the arguments as part of his ongoing lawsuit challenging the Affordable Health Care Act and its requirement that all Americans purchase health care insurance. Lawyers for the federal government have asked that the lawsuit be dismissed.

Pruitt’s main argument centers on health insurance exchanges. A key component of the law, the exchanges will be like online marketplaces allowing people to compare health insurance and buy policies. States were told they could create their own exchanges or defer to a federally created program.

Pruitt argues that the IRS created a rule that allows it to levy millions of dollars in tax penalties on “large employers,” which include state or local governments, in states using the federal exchange. That power was never given to the IRS as part of the law and allows the government to punish states that didn’t create their own exchanges, he argued in documents filed in U.S. District Court in Muskogee.

Oklahoma and some other Republican-controlled states have refused to set up their own exchanges, meaning the federal government will implement one.

The government alleges that Pruitt’s arguments amount to “a `difference of opinion’ between the state and the federal government, not a case or controversy.” But Pruitt said his lawsuit is focused on “the legality of what the IRS is doing and ensuring that the federal government complies with implementation of its own law.”

“The administration miscalculated how many states would support this law, so now they’re using the IRS to push through provisions that Congress did not pass,” said Pruitt, a Republican and frequent critic of policies adopted by Democratic President Barack Obama’s administration.

“Congress provided a choice for Oklahoma and other states in implementation of the law,” Pruitt added. “The IRS is attempting through this rule to take away that choice.”

Pruitt originally filed his lawsuit in 2011, then amended it after the U.S. Supreme Court upheld the law last year.

The amended complaint seeks recognition that a voter-approved amendment to the Oklahoma Constitution protects citizens from mandated purchases of health insurance. The lawsuit also alleges that federal regulations and plans to create online insurance marketplaces do not comply with the Administrative Procedures Act, which are guidelines used to adjudicate legal disputes, and should be invalidated.

The lawsuit alleges the law is unconstitutional because it gives the government control over state legislative and executive power, exceeds Congress’ authority and infringes on state sovereignty.