Opponents of the health-care overhaul have filed a new lawsuit Thursday against the federal government on behalf of four individuals and three employers in the U.S. District Court for the District of Columbia.
The complaint focuses on the law’s distribution of federal subsidies for Americans to purchase insurance, and whether people can get them if they live in one of the 33 states that have refused to set up their own insurance exchanges and have left that task up to the federal government.
The health law was designed around the idea that states would run exchanges where people could compare insurance plans and apply for the subsidies. Some critics say that language in the legislation bars the Obama administration from allowing those subsidies to be distributed in exchanges run by the federal government.
The individual plaintiffs in the new lawsuit, from Tennessee, Texas, Virginia and West Virginia – states that didn’t set up exchanges — say they should not be considered eligible for the subsidies and should not have to pay a fine if they don’t purchase insurance.
The “subsidies actually serve to financially injure and restrict the economic choices of certain individuals,” the new complaint says. “For these people, the Subsidy Expansion Rule, by making insurance less ‘unaffordable,’ subjects them to the individual mandate’s requirement to purchase costly, comprehensive health insurance that they otherwise would forgo.”
The employers from Missouri, Kansas and Texas are arguing that they should not be subject to penalties that they may have to pay if their workers receive tax subsidies through the exchanges.
Oklahoma’s attorney general, Republican Scott Pruitt, filed a similar challenge in federal court for the Eastern District of Oklahoma on behalf of the state. The Obama administration has argued that the case should be thrown out because Oklahoma cannot show it is being harmed.
U.S. Treasury officials have also said that they believe Internal Revenue Service rules applying the law’s provisions to the federally run exchanges are in keeping with the statute. They have criticized opponents for trying to prevent millions of Americans from getting tax credits.
The new plaintiffs are being represented by Michael Carvin, a former Reagan administration lawyer who helped to represent the Bush campaign in the 2000 presidential election cases.
Mr. Carvin, of Jones Day, also represented the National Federation of Independent Business in its unsuccessful case arguing that the Affordable Care Act was unconstitutional because of its requirement that individuals purchase insurance or pay a fee.
A libertarian think-tank, the Competitive Enterprise Institute, said it is coordinating some of the legal work in the case and helping to fund it.
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