Obamacare Architect: No Tax Credits for Federal Exchanges

Halbig versus Burwell is the famous lawsuit that claims that Obamacare federal health insurance exchanges cannot pay tax credits to health insurers. The plain language of the law is that only state-based Obamacare health insurance exchanges can channel these tax credits. The real champions of this argument are Michael Cannon and Jonathan Adler of the Cato Institute, who recently encapsulated their argument in the Wall Street Journal. The question is still unsettled. Last week, two different Circuit Appeals Court panels came to different conclusions: The DC Circuit agreed that the subsidies could only go to insurers in state exchanges; while the 4th Circuit ruled that they could go through federal exchanges too. The Administration is horrified that the Supreme Court could decide that it is illegal to subsidize insurers in federal exchanges. Most states have declined to set up their own exchanges. Further, some of those that did are closing up shop. So, imagine our surprise when a researcher at the Competitive Enterprise

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Institute dug up a 2012 video of Jonathan Gruber, who was the “architect” of Obamacare, stating the obvious:

What’s important to remember politically about this is that if you’re a state and you don’t set up an exchange that means your citizens don’t get their tax credits…

Of course, Mr. Gruber is now trying to wriggle out of his previous comments. Read the whole story at the CEI blog.

Comments (14)

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  1. Yancey Ward says:

    Gruber, in the recordings, isn’t speaking as if he is giving an interpretation of the law, but is speaking authoritatively. He wasn’t describing to the audience what he thought the law meant, but was describing what he knows the law meant.

    He has been caught in a big, big lie, in both this amicus brief and in his comments of the last few days when he says he has no idea why he might have said such things.

    • John Fembup says:

      “He has been caught in a big, big lie,”

      It’s worse. At least for Gruber, its worse.

      He’s been caught in a big, big truth.

      • Yancey Ward says:

        LOL! Yes indeed!

        • John R. Graham says:

          The question is: Do judges pay attention to this? Mr. Gruber did not vote for the law. I am not a lawyer, so have no idea if this is “admissible” or not.

          • Yancey Ward says:

            Judges pay attention to what judges want to pay attention to. Anyone trying to convince you otherwise is trying to sell something.

    • Steve says:

      Of course he’s trying to lie about his admission now. He, like everyone else in the administration, will do ANYTHING, legal or illegal, to get this law so ingrained into our healthcare system that it becomes a daunting task to repeal or judicially block this atrocious law.

      The truth is that subsidies were always meant for only that states that set up their own exchanges. After all, states that didn’t were to be punished, and the admin believed that all 50 states would willingly comply. The idea that Gruber misspoke is an absolute insult. But, then again, so much of this lawless administration’s policies have been insulting.

  2. Frank says:

    He claims to have had a “speak-o”…

  3. American Patriot says:

    What a shame it will be if we see another en banc decision and, eventually, a Supreme Court ruling that is based on politics, rather than the law. We know that Mr. Obama is betting heavily on his cronies, especially Kagan and Sotomayor, to do his bidding for him. The sad thing is that we have seen this before, from an unexpected source too. Roberts took it upon himself to change the law to make it stick.

    Unfortunately, I think we could see a similar travesty this time again.

  4. Freedom Lover says:

    From the president telling us that we could keep our doctor and our plan to Jonathan Gruber telling us he didn’t say what he actually said, this proponents of Obamacare have been selling us a bunch of lies. This one is so blatant too. The law (written by THIS administration) clearly says that only states that have set up their own health insurance exchanges shall receive subsidies for their residents.

    If the courts are able to uphold the rule of law, such a ruling will basically dismantle the whole law. We can only hope the justices do the right thing this time.

  5. Phill S says:

    What’s more, three heavily liberal states, after wasting more of their taxpayers’ money, have shut down their exchanges. http://healthblog.ncpathinktank.org/update-federal-taxpayers-have-spent-655-million-on-three-state-exchanges-that-have-shut-down/

    Why would they do that if Obamacare was the stunning success the administration claims it is?

  6. Paul says:

    Beware of the media spin that will inevitably follow from a future court ruling upholding Halbig: Obamacare opponents do not want most needy ACA enrollees to receive the subsidies to which they are entitled.

    That is totally false. We want Obamacare to go away, and a ruling that follows Mr. Gruber’s own words will make Obamacare’s higher premiums unaffordable and render the ACA helpless. This will improve premium pricing, overall care, and the economy.

  7. bob hertz says:

    Paul, I am not sure that your argument will hold for many individuals.

    Take a 60 year old who gets a $4,000 tax subsidy in the current ACA exchange.

    You seem to be saying that without the ACA, premiums would fall for everyone.

    And I think you are right!

    But I sure do not think that premiums will fall by $4000 for this person.

    I suspect that your arguments drifts back to the fact that before the ACA and in less regulated states, young people paid much less for health insurance. Older people got hosed (and I am in the insurance business, so I know.)

    I do not think that as a whole the nation wants to go back to that.

    • John R. Graham says:

      Much as we would like to insist, not everybody loses from Obamacare. Because premiums can vary from 3:1 between young people and older people, whereas actuarial accuracy would result in 6:1 or 7:1, 60-year olds likely are getting a good deal at taxpayers’ and younger peoples’ expense.

      This was deliberate, to make it harder to repeal. A 60-year old is much likelier to vote than a 25-year old!

  8. Bob Hertz says:

    Paul, I am going to make another protest to what I believe is your position — namely, that we would get better reform from the states, without the ACA.

    Well, one part of most Republican alternatives to the ACA is high risk pools.
    The thought is that it would be better to subsidize this group directly, versus forcing them into every health insurance policy and raising every premium.

    I agree with this, although the issue is complex.

    Well then, here is my point.

    The states which now oppose the ACA are by and large, the same states which never paid a nickel toward high risk pools before 2010. I followed this closely because I needed high risk insurance for myself at the time. Over 20 states had no high risk pools whatever. Another 15 or so had pools so tiny and underfunded that there were long waiting lists.

    The opposition to the ACA is this blog largely comes from thoughtful conservatives, so I enjoy reading the posts.

    But in quite a few states, the opposition to the ACA seems to come from perpetual stinginess, an unwillingness to raise taxes for anything.

    Bob Hertz, The Health Care Crusade