Question of subsidies and federal exchanges at center of latest health law court challenge

May 4 2013

News outlets report on a variety of health implementation issues, including the latest lawsuit filed by the law's opponents. Other stories detail cost and coverage wrinkles and advances.

The Wall Street Journal's Washington Wire: Obamacare Gets New Court Challenge
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 (Radnofsky, 5/2).

Reuters: Health Care Law Opponents Sue Obama Officials Over IRS Rules
A group of individuals and businesses filed a lawsuit against the Obama administration's health care overhaul on Thursday, hoping to stop the law in states that have not set up new insurance exchanges. The complaint filed in the Washington federal court challenges federal rules issued in 2012 for implementing the president's 2010 healthcare law which goes into full force in January 2014. The 12 challengers, ranging from a hospital chain to a restaurant franchise, argue that Internal Revenue Service rules issued last year should be invalidated because they contradict what Congress originally intended. A court win for the challengers could cast doubt over the IRS's ability to enforce the healthcare law's new tax penalties (Temple-West, 5/2).

Bloomberg: Obama Health Care Law Challenged In Suit Over Tax Subsidy
Opponents of the Obama administration's health care overhaul sued the U.S. over an Internal Revenue Service rule that extends tax subsidies to individuals in states that declined to set up insurance exchanges authorized under the law. … By providing the subsidies in the 33 states that declined to set up exchanges, the healthcare overhaul, known as the Affordable Care Act, makes insurance "less unaffordable," according to the complaint. It subjects some people to "a requirement to purchase costly, comprehensive health insurance that they otherwise would forgo," the plaintiffs claimed (Zajac, 5/2).

The Hill: Lawsuit Accuses IRS Of 'Flagrantly Illegal' Actions In Rollout Of Obamacare Aid
The businesses said they shouldn't have to provide health insurance to their employees -; and that their employees also shouldn't be able to get a subsidy from the government to help afford coverage on their own. It's not the first time critics have accused the IRS of illegally implementing the health care law's subsidies, but the latest challenge focuses on small businesses in an effort to advance the issue in the courts. The businesses have enlisted some high-profile legal help for their ObamaCare challenge -; they're represented by Michael Carvin, who argued part of the case against the law's individual mandate at the Supreme Court last year (Baker, 5/2).

In other implementation news -

Los Angeles Times: Part-Timers To Lose Pay Amid Health Act's New Math
Many part-timers are facing a double whammy from President Obama's Affordable Care Act. The law requires large employers offering health insurance to include part-time employees working 30 hours a week or more. But rather than provide healthcare to more workers, a growing number of employers are cutting back employee hours instead. The result: Not only will these workers earn less money, but they'll also miss out on health insurance at work (Terhune, 5/2).

NPR: Political Battle Over Health Law Starts Next Chapter
In the three years since the Affordable Care Act became law, public opinion has remained deeply divided, with as many Americans opposing the law as supporting it. When Americans begin signing up for health insurance under the act, opinion may finally begin to shake loose. Some people without access to insurance gain it and others encounter new bureaucracies (Liasson, 5/3).

KQED/State Of Health: Hey, Small Business Owners – Obamacare Tax Credits Available Now
With less than a year to go before the full rollout of Obamacare, many business owners are still scratching their heads over what it will mean for them. In fact, most still wrongly believe they'll have to offer health insurance to their employees, according to a recent eHealth survey. While businesses with 50 or more full time employees will have to pay a $2,000 penalty per worker if they do not offer health insurance, there is no penalty for smaller businesses (Weiss, 5/2).

From the state-level -

Fox News: South Carolina Bill Would Make It A Crime To Implement ObamaCare
The Supreme Court may have ruled ObamaCare is constitutional, but implementing the controversial federal law would become a crime in South Carolina if a bill passed by the state House becomes law. The bill, approved Wednesday by a vote of 65-39, declares President Obama's signature legislation "null and void." Whereas the law that Obama pushed and Congress passed is known as the Patient Protection and Affordable Care Act, South Carolina's law would be known as the Freedom of Health Care Protection Act (5/3).