U.S. Judge Blocks Obamacare Rule for Non-Exchange States

An Oklahoma federal judge dealt a blow to President Barack Obama’s health-care law, invalidating IRS rules aimed at making policies affordable for consumers around the country.

U.S. District Judge Ronald White in Muskogee ruled today that subsidies, in the form of tax credits, apply only to consumers in the 14 states that have set up insurance marketplaces and not to individuals who buy insurance on the federal marketplace, as in Oklahoma. An Internal Revenue Service rule says needy customers in both the federal and state marketplaces are eligible for subsidies.

“The court is upholding the act as written,” White said, citing language in the law that limits subsidies to those in states with their own exchanges. He called the IRS regulations “arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law.”

In July, a three-judge panel of the U.S. Court of Appeals in Washington also limited subsidies to state exchanges, a ruling the full appeals court has agreed to reconsider. Another U.S. appeals court, in Richmond, Virginia, said on the same day day that subsidies were available on federal exchanges.

http://www.bloomberg.com/news/2014-...bamacare-tax-rule-on-non-exchange-states.html