Tea Party Wins Round In Health Care Reform Lawsuit

May 23, 2013

FRANKFORT, Ky. -- The tea party won the first round Thursday in a lawsuit that questions the legality of the Kentucky Health Benefit Exchange that Gov. Steve Beshear set up last year by executive order.

Franklin County Circuit Judge Phillip J. Shepherd refused to dismiss the lawsuit, as had been requested by attorneys for the state.

The state argued unsuccessfully that taxpayers don't have legal standing to challenge the legality of the Kentucky Health Benefits Exchange, which is intended to help uninsured people arrange insurance coverage under the federal health care overhaul.

Tea party activist David Adams said he felt certain that argument would be rejected.

"I found that to be offensive," he said Thursday after learning of Shepherd's decision. "This says the people have the right to question the acts of the governor when the governor is violating the Constitution. It's very simple."

Beshear spokeswoman Kerri Richardson said she'd issue a statement later Thursday.

Adams filed the lawsuit last month, claiming Beshear created the exchange without necessary legislative approval. Adams wants Shepherd to order work on the exchange to cease.

In court earlier this week, attorneys for Beshear and the tea party argued over whether taxpayers had legal standing to challenge the health benefit exchange, prompting a pointed question from Shepherd that may have foreshadowed his ruling.

"I'm just wondering here," Shepherd said, "if they don't have standing, who does?"

Tea party activists in Kentucky have been sharply critical of Beshear's decision to operate a state health insurance exchange, saying taxpayers are picking up the bill for an unnecessary government entity. Beshear administration attorney Patrick Hughes said the lawsuit is essentially an improper attempt to use the court system to address "a purely political question."

Kentucky is one of 17 states that the U.S. Department of Health and Human Services has approved to build their own exchanges to provide one-stop shopping for health insurance. Open enrollment begins Oct. 1, and the exchange starts operation next Jan. 1. Some 21 states have declined to set up exchanges, which means federal authorities will set up and operate the new insurance marketplaces for them.

Startup costs for the Kentucky exchange are being covered by federal grants, but the state will be responsible for all funding beginning in 2015. Kentucky has already received $252 million from the federal government to set up the exchange.