Oklahoma Has A Major Point In Ongoing Lawsuit To Bring Down Obamacare

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Oklahoma Attorney General Scott Pruitt’s year-old lawsuit to bring down the Patient Protection and Affordable Care Act is beginning to receive more attention now that Obamacare has endured the first week of its square-wheeled rollout.

Taking a different approach than that employed by the 28 States that lost a Constitutional argument before the Supreme Court, Oklahoma is arguing that the law stands against itself by following separate tracks for those States which create their own insurance exchanges (and agree to fund the attendant expansion of Medicaid), and those States that have Federally-managed exchanges imposed because they refused to participate in implementing the law (or the Medicaid expansion).

The Act specifies that only low-income residents in States that have agreed to expand Medicaid and institute their own health care exchange programs are eligible to receive the promised insurance premium subsidies. Residents of States that don’t participate in Obamacare, by contrast, are not eligible to receive those subsidies – even if they buy Obamacare insurance plans through the Federal exchange program.

Merrill Matthews at Forbes explained back in July how Oklahoma is arguing that dichotomy knocks part of the Obamacare law out of step with its own requirements:

The liberals writing the law assumed the vast majority of states would create their own exchange.  But just to make sure, they included a “carrot” that clearly says that the federal subsidies are available ONLY in the state-created exchanges, not in the federal-state partnerships or the federally created exchanges.

However, 34 states have decided not to play the ObamaCare game and opted for a federally created exchange or the partnership, which means the federal subsidies will not be available to millions of middle- and lower-income workers in those states.

And without the subsidies, insurance would become “unaffordable” under ObamaCare for the vast majority of those families.  They would thus be exempted from the mandate to have coverage, and their employers would be exempted from the penalty for not providing it.

In other words, the most draconian part of ObamaCare would essentially be defunded.  Bingo!

Oklahoma is suing the feds to establish this point.

There are other aspects to the lawsuit, involving the IRS’ punitive enforcement measures against large employers, which National Review has nicely summarized.

A Federal judge overruled the government’s contention that Pruitt lacked standing to proceed with the suit in August.

Will Oklahoma continue to fight this battle alone?

Personal Liberty

Ben Bullard

Reconciling the concept of individual sovereignty with conscientious participation in the modern American political process is a continuing preoccupation for staff writer Ben Bullard. A former community newspaper writer, Bullard has closely observed the manner in which well-meaning small-town politicians and policy makers often accept, unthinkingly, their increasingly marginal role in shaping the quality of their own lives, as well as those of the people whom they serve. He argues that American public policy is plagued by inscrutable and corrupt motives on a national scale, a fundamental problem which individuals, families and communities must strive to solve. This, he argues, can be achieved only as Americans rediscover the principal role each citizen plays in enriching the welfare of our Republic.

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  • JRR

    Even if we somehow miss being thrown under the Obamacare bus, we have a thoroughly corrupt country, legislature, executive branch and judicial branch to try to overcome.

    Good luck to us.

    • ChiefBoring

      I think Chief Justice Roberts should be forced to apply through the ACA website for his insurance. The Supreme Court did not read the bill any more than Congress did. They all should be ashamed of themselves.

  • Bill

    Go, Oklahoma

  • rbrooks

    someone should file a suit to end all of the tax payer funded health care we provide for all of these public officials. like scott pruitt. why do we provide him, and his family, all of the perks we deny the rest of the public.

  • http://seekingalpha.com/article/1514632 lottopol

    “..

    Medical prices are controlled in various ways in the rest of
    the developed world. In Japan,
    the land of $100 melons and tiny $10,000 per month apartments, all medical care
    prices are listed in a book, thicker than the Manhattan telephone directory. The prices set
    in the book are usually less than a third of those in the USA. An MRI
    that costs $1,200 in the USA
    costs $88 in Japan.
    Japanese insurance companies are private as are most doctors. Japan spends less than a third per capita on
    medical care than America.
    However, the Japanese are greater consumers of medical care than Americans. They
    visit doctors and hospitals more often, have much more diagnostic tests such as
    MRIs. They also have better health outcomes as measured by all metrics such as
    life expectancy. They also wait less for treatment than Americans do as
    Japanese doctors work much longer hours for their much lower incomes.

    Japan’s
    explicit price controls are roughly emulated in other countries via the use monopsonistic
    systems. Monopsony, meaning “single buyer” is the flip side of monopoly. A
    monopolist sets prices above free market equilibrium. A monopsonist sets prices
    below free market equilibrium. It does not matter if there is an actual single
    payer or many buyers (or payers) whose prices are set by the government or by
    insurance companies in collusion with each other. More competition among
    sellers generally leads to lower prices. However, more competition among buyers
    leads to higher prices. In the health insurance industry the beneficial effects
    of more insurance companies competing for patients are far outweighed by the
    adverse effects of insurance companies competing for doctors and hospitals in
    their HMO plans. This was completely misunderstood during the recent debate on
    health care reform. With health care, more competition among insurance
    companies on balance results in higher prices.

    Focusing attention on the insurance companies, which are
    simply intermediaries between the doctors and the patients, was a tragic error.
    It would like trying to solve a problem of high energy prices by focusing on
    gasoline stations. Only if the government sets prices can health care prices be controlled. Controlling prices does
    not automatically result in longer waiting times. Japan
    and Switzerland generally have
    shorter waiting times to see doctors than does the USA. Additionally, if prices were
    controlled there would be no such thing as “in-network” or “out-of-network”
    since all doctors would accept all insurance plans.

    Price inelasticity in medical care stems not from the
    physical nature of its delivery as is the case of retail electricity. Rather,
    it is the dynamics of how medical care is delivered via the patient –doctor
    relationship. How many people have ever negotiated with a doctor over the price
    before undergoing necessary treatment? Have you ever met anyone who got up off
    an examination table and walked out because the doctor quoted too high a price?
    In theory, sick people could shop for the lowest price, but they don’t. An
    individual gasoline station faces elastic demand. People must buy gasoline, but
    if one station raises its price enough, customers will go elsewhere. When an
    individual doctor increases fees, most customers don’t go elsewhere. Thus, fees
    will continue to rise until prices reach the elastic portion of the demand
    curve.

    In the USA
    we have attempted to deal with the combination of inelastic demand and
    unregulated medical care prices in various ways. One method of keeping medical
    care expense as a percent of GDP to “only” double that of other developed countries
    was to have a significant portion of the population uninsured and denied medic
    care in some circumstances. Obamacare will reduce the number of uninsured and
    untreated. However admirable this may be from a humanitarian perspective,
    absent price controls, it will exacerbate the cost problem. The existence of large numbers of uninsured
    (conscripts in the war against rising medical costs) did moderate the growth in
    health care costs. Now the number of uninsured and untreated will be declining
    and uncontrolled prices will be rising.

    HMO’s were once thought to be a way of dealing with the
    inexorable price increases. The problem is that HMOs have to compete against
    each other for services of doctors and hospitals. As long as medical prices are
    set by market forces, the inelasticity of demand will force market prices
    inexorably higher. In a “mixed system” with both free-market and controlled health
    care prices like the USA, prices inexorably are driven upwards to the market
    level as long as demand is inelastic. Prices such as payments from Medicare
    that are “controlled” have to be increased continuously with legislation such
    as the “doctor-fix” to stay competitive with market prices. Medical prices can
    only be effectively controlled either by direct price controls as in Japan or
    with systems where everyone gets care for “free” from the government (Canada,
    UK, France). In those countries only the extremely wealthy can chose not to use
    the government paid health services that they have already paid for with their
    taxes and patronize the relatively small market-priced sector. In those
    countries, forgoing the government priced system is not an option for almost
    all doctors, as it is in the USA.

    In some respects, free-market capitalism mixes with medical
    care almost as badly socialism mixes with agriculture. The economic failures of communism are well
    known, particularly the inability of state-run agriculture to provide even
    basic staples. In free markets “consumer sovereignty” directs the producers of
    goods and services to follow the dictates of supply and demand. As Adam Smith
    explained in 1776, no central authority coordinates the delivery of food and
    the plethora of goods that a major city like London needs every day. Rather, the “invisible
    hand” of competitive free markets results in an abundance of goods and services
    being provided to consumers in the most efficient manner. The “consumption” of
    medical care overturns many of the economic assumptions that underlie
    free-market efficiency. Usually, the conditions under which medical care is
    provided are the exact opposite of consumer sovereignty. In most cases the
    “sellers” i.e. the doctors, tell you, the “buyer” what and how much you need
    and set the price. The prevalence of third-party payers further removes
    medicine from the purview of the normal supply and demand market economics that
    prevails for goods and services whose sellers do not face inelastic demand.

    The price inelasticity of health care is also a consequence
    of the success of the medical science. Two hundred years ago, consultation with
    a physician did not significantly alter the outcomes of most medical
    conditions. Doctors could do very little for patients prior to 1800. Since
    then, the medical science has made tremendous progress. As treatments became
    more effective, people became willing to pay increasingly more for health care.
    It is quite logical that as doctors could do more and more to improve people’s
    lives; people would be willing to pay more for their services.

    From a humanitarian perspective this medical progress is
    great. However, in any unregulated market, the price of a product facing
    inelastic demand will eventually increase until the price reaches the elastic
    portion of the demand curve. For the USA, that would mean spending much
    more than 50% of GDP on health care. Most of those not engaged in the health
    care industry would see their standard of living plummet. This is politically unacceptable.
    Thus, well before the prices of health care reach that level the USA will
    join the rest of the developed world and control medical prices.

    In the short-run, Obamacare with 30 million more people with
    health insurance means greater profits for the health care sector. However,
    retention of a basically market-priced healthcare system will ultimately prove
    untenable. One scenario could be that politicians in the USA who so far
    have demonstrated abysmal ignorance of the economics of healthcare will attempt
    a “free market solution”. As unfettered health care prices would be a disaster,
    that would probably then cause the USA to join the rest of the world
    with some type of monoposonized health care system. As most observers of the
    various health care system in world, except possibly Michael Moore, are aware this
    would not be a total panacea;

    The USA
    spends about twice as much per person on health care as other developed
    countries. However, the prices paid by Americans or their insurance carriers
    for medical procedures are typically about triple what is paid in other
    developed countries. Hence, Americans consume less health care services than their foreign counterparts. Obamacare does not seriously address the price problem and would thus appear likely to only exacerbate the problem…”
    http://seekingalpha.com/article/1647632

    • TheOriginalDaveH

      “However,retention of a basically market-priced healthcare system will ultimately prove untenable”.
      “Retention of a … market-priced healthcare system”?
      We haven’t had a Market-based Healthcare system for over 100 years. That one bit of nonsensical information tells us that the article has no validity. In other words, it’s Communist claptrap:
      http://mises.org/daily/5066

      “However, in any unregulated market, the price of a product facing
      inelastic demand will eventually increase until the price reaches the elastic portion of the demand curve”.
      Keynesian BS. It is nothing but a snow-job. Absent Government meddlers, the “inelastic” demand results in more businesses rising to meet the demand (competitors), thus lowering the prices. And there is nothing “inelastic” about most health problems. In most cases, the problem goes away with time, unless we succumb to the fear and get treated in which case the Doctors always are assumed to have been responsible for the cure. How nice for the doctors.
      I cure myself by exercising regularly, taking the proper supplements, and eating right. That means staying away from processed foods. If the medical profession was dependent on people like me, they would go broke in a heartbeat.
      Subsidized Healthcare results in Moral Hazard, i.e. people being more reckless with their health habits, thus requiring more health care, and other people using medical services for trivial health problems. That increased demand results in higher costs, not lower. Add the costs of Government meddlers to the equation and you have out of control costs. There is no such thing as a Free Lunch. Somebody always pays.
      You can bet those countries who have Nationalized Healthcare pay for it dearly, either by long, sometimes deadly, waiting times, or by lower standards of living.
      Take France and Italy, for instance, number 1 and 2 in the WHO rankings. France has GDP per capita on a PPP basis of $36,100.
      Italy has GDP per capita on a PPP basis of $30,600.
      United States has a GDP per capita on a PPP basis of $50,700
      How many of you are willing to follow their lead and pay $14,000 to $20,000 more each year for that wonderful Socialism?
      You may or may not live longer in those countries, but it will sure seem like it.

      • http://seekingalpha.com/article/1514632 lottopol

        The laws of supply and demand where formulated by Alfred Marshall, before Keynes was a teenager. It is interesting that there are Ph.D. biologists who write “creationist” and “intelligent design” textbooks that sell well in bible colleges and places like Kansas and Texas. However, no one has ever written a non-Keynesian macroeconomics textbooks that would be popular with those who have no understanding of macroeconomics or what Keynes actually promulgated. Possibly economists are more ethical than biologists.

        “..The reason that no nation, including the wealthiest can
        allow markets to set the prices of medical care indefinitely is that demand for medical care is inelastic. Demand for a good or service is inelastic if a percentage increase in price results in a smaller percentage decrease in the quantity demanded. Basic economics tells us that sellers facing inelastic
        demand will continuously raise prices until prices reach the elastic portion of the demand curve. Consequently in every developed country in the world, all goods or services with inelastic demand have their prices regulated by government.
        Medical care in the USA being the only exception.

        Health care is one of the very few things for which the
        sellers face inelastic demand. The prices of all other goods and services facing inelastic demand in the USA
        are regulated by government. Retail electricity service providers face inelastic demand. Consequently, their prices are strictly controlled by all governments worldwide, including the USA.

        The inelasticity of retail electricity is obvious. If Consolidated
        Edison (ED) or any other electric utility were to triple retail service prices,people might be a little more careful about turning off the lights. Turning off their refrigerators? Watching less television? Not likely. Thus, tripling the price would result in only a small reduction in kilowatt-hours sold. Almost all other goods and services are price elastic. That includes non-medically necessary elective cosmetic and
        lasik surgery whose prices have actually relatively decreased over time. Medical care in the USA
        is the only instance in any developed country where any product facing inelastic demand is not substantially price regulated…”
        http://seekingalpha.com/article/1647632

        • TheOriginalDaveH

          Keynes was a Court Economist whose purpose was to generate arcane, plausible-sounding economic language so as to cover for the fact that the Crony Politicians and their Crony Capitalists were robbing the citizens blind.
          Once people caught on to his mistaken theories, he would simply switch to another arcane set of theories to cover for his Bosses.
          http://mises.org/etexts/keynestheman.pdf

          • http://seekingalpha.com/article/1514632 lottopol

            When Keynes wrote in the 1920s and early 1930s the ruling politicians in England at the time and the ruling classes were fixated on balancing budgets and violently opposed his contention that governments should run surpluses when the economy was booming and run deficits when the economy was in recession in order to increase economic activity. Even moderately conservative politicians at the time criticized Keynes’ general opposition to welfares and social spending and said that Keynes was much less concerned with human suffering than he was with waste and inefficiency.

          • TheOriginalDaveH

            The best thing for Government to do in any kind of economy is to butt out of it. They typically don’t — due to their relationship with Crony Capitalists (Mercantilism).
            Here is just one historical example of Government butting out:
            http://mises.org/daily/3788
            I encourage readers to study Austrian Economic Theory and Keynesian Economic Theory to see which makes more sense. The Austrians tell it like it is. The Keynesians tell it like the Leaders want you to think it is.
            Here is a good place to start:
            http://library.mises.org/books/Kel%20Kelly/The%20Case%20for%20Legalizing%20Capitalism.pdf

      • http://seekingalpha.com/article/1514632 lottopol

        “, the “inelastic” demand results in more businesses rising to meet the demand (competitors), thus lowering the prices. ”

        The exact opposite is the case. Anyone who has ever taken an introduction the economics course should know that “inelastic” or “elastic” demand is a condition where the seller of a good or service who can under our free market system can set the price of what they sell, but under the law of demand will be able to sell less of the product at a higher price. If demand is elastic, as it is for almost every good and service an increase in price of say 10% would result in an decrease in the quantity demanded of say 20%. That would be an elasticity of 2.0 = 20%/10%. It would mean that an increase in price would result in a reduction in revenue. Sellers might increase price anyway and accept a decrease in revenue since by selling less units their costs would decrease as well and the increase in price could very well result in higher profits.

        If demand is inelastic that means that the elasticity is less than 1.0, thus an increase in price of say 10% would result in an decrease in the quantity demanded of say 5%. That would be an elasticity of 0.5 = 5%/10%. It would mean that an increase in price would result in an increase revenue. Sellers would always increase prices under inelastic demand since an increase in price would both result in higher revenue and profits since by selling less units their costs would decrease as well and the price increase would always result in higher profits.

        Inelastic demand situations are very rare only retail electricity and health care are significant examples of inelastic demand is the USA

        “…Health care is one of the very few things for which the
        sellers face inelastic demand. The prices of all other goods and services facing inelastic demand in the USA
        are regulated by government. Retail electricity service providers face inelastic demand. Consequently, their prices are strictly controlled by all governments worldwide, including the USA.

        The inelasticity of retail electricity is obvious. If Consolidated
        Edison or any other electric utility were to triple retail service prices, people might be a little more careful about turning off the lights. Turning off their refrigerators? Watching less television? Not likely. Thus, tripling the price would result in only a small reduction in kilowatt-hours sold. Almost all other goods and services are price elastic. That includes non-medically necessary elective cosmetic and
        lasik surgery whose prices have actually relatively decreased over time. Medical care in the USA
        is the only instance in any developed country where any product facing inelastic demand is not substantially price regulated…”
        http://seekingalpha.com/article/1647632

        • TheOriginalDaveH

          Electricity? Using so-called Public Goods as an example is misleading to say the least. Utilities are generally guaranteed monopolies, so there is no offsetting competition to lower prices. Thus, people in essence are limited to forgoing the product as their only choice in fighting higher prices. Sure Governments can set “ceilings” on the prices, but the real-world result is that those “ceilings” generally become “floors” protecting the least efficient of the monopoly suppliers from one region to the next. When push comes to shove the more politically-connected suppliers are going to win every time over the less politically-connected people. The only way to address that is to get Government out of our Marketplace and let Free Markets do what they do best — Serve the people.
          I encourage everybody to study lottopol’s Keynesian theories, and Austrian theories and see which makes most sense. I know that Austrian theories trump Keynesian every day of the week, unless you are a self-interested Leader or Crony Capitalist who wants to take advantage of the masses.
          http://mises.org/etexts/austrian.asp
          http://mises.org/daily/6533/Only-Austrian-Theory-Can-Explain-and-Expose-Booms-and-Bubbles

          Also, lottopol, being pretentious by using arcane economic language, such as “elastic demand” does not impress me. You may be able to snow ignorant Liberal Progressives with that technique, but it doesn’t work on me.

          • http://seekingalpha.com/article/1514632 lottopol

            You are correct that the history of price regulation in the USA has generally been one of the more politically-connected suppliers using the government to raise prices above free-market equilibrium. Examples include: milk, sugar, rice, airline fares etc. The only exceptions have been the natural monopolies such as retail electricity. Keynes had nothing to do with the fact that sellers facing inelastic demand will continuously raise prices until they get to the elastic portion of the demand curve. That was known to economists before Keynes became an adult. Furthermore the prices of healthcare are the subject of microeconomics and Keynes was a macroeconomist. Government control of health care will bring all sorts of problems but it is inevitable.

            “..

            The USA
            is the last holdout with market-priced medical care not because of any inherent
            conservative or free market ideology. Rather, as the wealthiest nation that
            ever existed we are the last ones who can afford it. Switzerland was one of the last
            advanced economies to abandon market-priced medical care. It is arguably a greater
            bastion of conservatism than the USA. Switzerland’s women were not granted the right to vote until 1971…”
            http://seekingalpha.com/article/1647632.

      • Motov

        What needs to be done is remove the lawyers for their mal practice crap. Granted, there are quacks that need to be removed from medicine, but lawyers always love to cause megabuck lawsuits which drives up costs for everyone else.
        It has become my “army of legal idiots vs your army of legal idiots and we both lose,…. our $$$$$ for a lottery ticket!

        • TheOriginalDaveH

          The Justice system is not Just. It has simply become a way for those attached to it to get rich off of other people’s misfortune. By the way, my first sentence is what a lawyer told me when I asked her how we could expect justice when people were allowed to lie in court without being subjected to perjury charges.
          Once you realize that Government is just a very large self-serving gang, everything they do becomes clear.

    • Sandy Phelps

      Japan also has the best Health care system in the world, it is also UNIVERSAL. The U.S. is the ony country that does not have Universal Healthcare, but it has been attempted many times since the early 1900’s. To Date there has not been a proposal that was acceptable and fair to all. Now, Obama has pushed into law a farce for Healhcare reform. He never intended it to be fair or even useable. It is an un-represented tax gobbler.
      I would have no arguement against a reasonable tax for a universal Healthcare that was comparable to that of Japan and many other countries. Canada, Switzerland, UK, etc. But it would have to be the best quality care this country has to offer and the tax would have to be FAIR TO ALL, and UNTOUCHABLE BY ANY BRANCH OF THE GOVERNMENT.

  • KennyLLC

    Obamacare insurance payments will be taken from white people for the sake of appeasing the black population anyway. It will be just like the Social Security Administrations Disability rules that approve people for “behavioral health” problems of a criminal nature that ” could lead to death”.
    Disability disapproves all legitimate claims of the self-employed who pay twice as much in s.s. funds than employees, and also the critically injured in favor of criminal affirmative health actions for black criminals. I know it all too well.

    • Sandy Phelps

      The pain Obama is inflicting is being felt by the black communities as well so let’s not get racial. OK? No, I am not black, I am part Native American and part Irish. But I am also US born 60+ years ago.

      • KennyLLC

        I have similar backgrounds.
        But I refuse to be politically correct in theclimate that we live in where sympathy over social programs is very much a racial issue.
        I have already experienced it in the S.S. Disability dept’, and so has my mother as a heart and cancer patient.
        I’m Fed’ up with it !

  • David Wallace

    I still don’t understand why anyone bothers with anything Resident Obama says. If we all just ignore him maybe he;ll go away. He only has they authority YOU give him.

    • Deerinwater

      Is that all? ~ I believe his title is, President of the most powerful nation ever known to mankind.

    • Sandy Phelps

      The only way it is going to change is if you contact your state senators and tell them to accept and pass the Articles of Impeachment that have already been submitted. The Democratic Senate will be the ONLY roadblock.

  • Deerinwater

    Right and these states will receive the rewards of their effort.

  • Sarah Conner

    If the ACA is really the’ law of the land’,then NO ONE IS EXEMPT FROM THIS GIGANTIC TAKE OVER OF 1/6 OF THE ECONOMY…NO ONE…this is the same tactic hitler used when he orchestrated germany’s demise and began to murder Jews and Christains alike…he told the german people they were not allowed to swim in their own pools…and they OBEYED…like sheep…then they were slaughtered like sheep…screw obozo and his moosehead cabinet…especially the iranian shat,valerie jarrett….

    • Sandy Phelps

      Unfortunately, one of the clauses in that bill specifically states that politicians and the president are exempt. That is one of the issues the House speaker and the Republicans proposed as a change before approving the budget months ago. Since it was Dem controlled congress that did not read it BEFORE making it a law, that is why they won’t pass any House proposals unless the Obamacare remains in the budget as is.

  • pnwdave

    I hope Oklaha won’t continue to do this alone!

  • Paul Hanson

    All of the court challenges to obummercare thus far that I have seen have been misguided. They have to walk around the huge elephant in the room called contract law to get their cases into court. ANY contract made under duress is null and void. By anyone’s definition, health insurance is a contract. For a given fee, the company provides you with insurance, that is a contract. And your signature on the document digital or otherwise, seals the deal.

    Contract law has been settled law for hundreds of years including contracts made under duress. The penalty for not signing the contract, even if it is a tax, is still duress. If you don’t sign, you are monetarily less well off. That is a loss of income and by its very definition, duress. I’m not even a lawyer and I can see this glaring flaw. All someone needs to do is sign up for obummercare and then file suit stating the contract was forced under duress. The supreme court isn’t about to stand hundreds of years of contract law on its head to continue to rule in favor of the individual mandate upon grounds for a challenge such as I’ve described here. Is age 52 too late to start a law career? Just wondering…

    Paul.

  • Mark H

    This Law, is the most prejudicial piece of legislation I’ve ever seen in my life.
    It obviously denies people equal protection under the law!
    Some people are exempt. Some are not. Some people are privileged class. Some are not. I guess the people in Congress that passed this legislation, and most of them are attorneys, don’t read the Bible. I quote,” woe unto you lawyers you bind heavy burdens, grievous to be born. You lay them on other men’s shoulders but you won’t move one of them what what your fingers. Therefore in the day of judgment you shall receive the greater damnation! All of you exempt Congressmen hypocrites. And you’ll deserve to. All you godless liberals.