Obamacare architect admitted in 2012 states without exchanges lose subsidies

Part 96 of 96 in the series Obamacare

OOPS: Obamacare expert Gruber now says he was mistaken in 2012 presentation.

By Ryan Radia | Special to Watchdog.org

This week, an unprecedented circuit split emerged in Halbig v. Burwell and King v. Burwell over whether health insurance premium assistance is available in states that didn’t set up health insurance exchanges.

Many commentators have since claimed that there’s no way Congress intended to deny premium assistance to residents of the 36 so-called “refusenik” states that have not set up their own health insurance exchanges.

But in January 2012, Jonathan Gruber, an MIT economics professor whom the The New York Times has called “Mr. Mandate” for his pivotal role in helping the Obama administration and Congress draft the Affordable Care Act, told an audience at Noblis that:

What’s important to remember politically about this is if you’re a state and you don’t set up an exchange, that means your citizens don’t get their tax credits—but your citizens still pay the taxes that support this bill. So you’re essentially saying [to] your citizens you’re going to pay all the taxes to help all the other states in the country. I hope that that’s a blatant enough political reality that states will get their act together and realize there are billions of dollars at stake here in setting up these exchanges. But, you know, once again the politics can get ugly around this.

The video starts at 31:25.

For more on Gruber’s crucial role in designing the ACA, see this 2012 profile of him in The New York Times and thisrelease from MIT’s press office, which describes Gruber as the architect of the “three-legged stool” concept discussed at length by the Fourth Circuit opinion in King v. Burwell.

The New Republic reports that Gruber says he made the statement in error.

“I honestly don’t remember why I said that,” he told the New Republic. “I was speaking off the cuff. It was just a mistake.”

“But there was never any intention to literally withhold money, to withhold tax credits, from the states that didn’t take that step,” Gruber added. “That’s clear in the intent of the law and if you talk to anybody who worked on the law. My subsequent statement was just a speak-oyou know, like a typo.”

Ryan Radia is on staff at Competitive Enterprise Institute, cei.org. He credits Volokh Conspiracy commenter Rich Weinstein for bringing this video to his attention.