Obamacare's non-smoking gun: Conservatives' new, ridiculous claim that Obamacare is a sham

Conservatives say a 2012 speech by a MIT economist proves the ACA is fraudulent. Here's the real story

Published July 25, 2014 3:44PM (EDT)


The latest legal challenge to the Affordable Care Act rests on a simple, absurd argument: Congressional Democrats, when they drafted the bill, deliberately tucked a little bit of statutory sabotage into their own legislation that would enable opponents of health care reform to blow the whole thing up.

The plaintiffs in Halbig v. Burwell contend that a single, sloppily written passage of the bill shows that Congress intended to deny subsidies to consumers purchasing insurance on exchanges set up by the federal government. If this were the case, then Democrats knowingly handed to every Republican governor in the country the tools to ensure the law’s failure – by opting to have a feds set up exchanges in their states, those governors would have made it impossible for residents to purchase insurance.

Supporters of the ACA say this is nonsense: the full text of the legislation makes clear that Congress intended to have the subsidies go to everyone, regardless of who was responsible for building the exchanges.

Well, now some excitable conservatives and libertarians think they’ve found proof of Congress’ intent to deny health subsidies to more than half the country: a 2012 speech by an academic involved in the crafting of the law.

The academic in question is MIT economist Jonathan Gruber, who, as pretty much everyone is observing today, was an “architect” of the Affordable Care Act. The Competitive Enterprise Institute posted video of a January 2012 speech Gruber gave in which he said this:

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.

Caught red-handed! Obamacare goes down! Score one for freedom! Right…? A lot of conservatives seem to think so.

Gruber’s speech “suggests the falsity of the administration’s claim that this was a glitch and not a feature,” writes Fox News’ Chris Stirewalt. “If enough judges (or more likely Justices) agree with Gruber's assessment, subsidies could be dropped from the federal exchange,” observes Breitbart News. “It is now quite untenable to argue that interpreting Obamacare in accordance with its plain language defeats the purpose of the law,” declare the legal minds at Powerline. Gruber “suggests not that the law’s exclusion of federal subsidies is a ‘drafting error,’ but a fully-intended incentive structure in order to convince states to take up the burden of creating their own state exchanges,” reports the Daily Caller.

So is this MIT professor’s speech a good indicator of Congress’ intent, as so many conservatives want to believe? Not really. Gruber, his prestigious “Obamacare architect” title notwithstanding, is very conspicuously not and elected member of Congress, nor was a Congressional staffer.

Aaron Carroll, another health policy wonk whose been deeply immersed in the policy wrangling over the ACA, offered a simple, effective answer to anyone looking to divine Congress’ intent from Gruber’s remarks:

Is there a single CBO analysis which documents what would happen if states refused to set up exchanges and would therefore “lose” their subsidies? Were any of Gruber’s models set up in this manner? If not, then I don’t understand how anyone in Congress or who set up the law thought it was going to work.

I accept that the law was written poorly. I accept that there may be individuals who thought it would work in the way the DC Circuit majority said. But there are tons of analyses, reports, interviews, and more that show that no one involved thought that way.

As for Gruber himself, that one 2012 comment stands in opposition to pretty much everything else he’s said about the argument over federal subsidies. Earlier this week on MSNBC he said “literally every single person involved in the crafting of this law has said that it’s a typo, that they had no intention of excluding the federal states. And why would they?” Asked by the New Republic’s Jonathan Cohn why he said what he did back in 2012, Gruber was stuck for an answer: “I honestly don’t remember why I said that. I was speaking off-the-cuff. It was just a mistake. People make mistakes. Congress made a mistake drafting the law and I made a mistake talking about it.”

So what does this all mean? I think Kevin Drum has the right take on Gruber’s follies. “The fact that he bollixed an audience question two years after the law's passage doesn't mean much. It's a nice gotcha moment, but probably not much else.”

By Simon Maloy

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