Bombshell: Federal judge suddenly green-lights lawsuit that could stop Obamacare in its tracks
Small-business plaintiffs say the government is treating all 50 states the same even though Congress allowed them to opt out – and 36 did
The IRS is granting insurance subsidies to taxpayers in the ‘refusenik’ states, even though the text of the Obamacare law doesn’t allow it
A federal judge denied the government’s motion to dismiss the case on Tuesday
He also refused, however, to issue an injunction barring the Obama administration from implementing the law while the case moves forward
By DAVID MARTOSKO
22 October 2013
A federal judge on Tuesday refused to dismiss a case that could fatally cripple the Obamacare health insurance law.
The Affordable Care Act forbids the federal government from enforcing the law in any state that opted out of setting up its own health care exchange, according to a group of small businesses whose lawsuit got a key hearing Monday in federal court.
The Obama administration, according to their lawsuit, has ignored that language in the law, enforcing all of its provisions even in states where the federal government is operating the insurance marketplaces on the error-plagued Healthcare.gov website.
Thirty-six states chose not to set up their exchanges, a move that effectively froze Washington, D.C. out of the authority to pay subsidies and other pot-sweeteners to convince citizens in those states to buy medical insurance.
But the IRS overstepped its authority by paying subsidies in those states anyway, say the businesses and their lawyers.