At a
hearing in front of the House Oversight Committee this morning,
MIT economist and Obamacare Architect Jonathan Gruber attempted to
explain away recently unearthed comments about the Affordable Care
Act’s subsidies that could prove troublesome for the health law as
it heads to the Supreme Court again next year. But his new
explanation doesn’t make much sense.
To understand today’s testimony, you have to go back to a video
taken in January 2012.
The video shows Gruber at a conference, where he’s asked about
what would happen if states declined to establish health insurance
exchanges under Obamacare. Gruber says in the video 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.”
This line was something of a bombshell when it was discovered
this summer, because it showed Gruber, one of the most influential
and widely quoted Obamacare experts, clearly saying
exactly what the challengers in a series high-profile
suits against the administration’s implementation of the health law
have argued: that, despite the Internal Revenue Service decision to
allow health insurance tax credits to flow through either federal
or state-run exchanges, the plain text of the law only allows for
tax credits (subsidies) in state-established exchanges. The
challenge was recently accepted by the Supreme Court, further
raising the prominence of the remarks.
When this remark initially surfaced over the summer,
Gruber described
it as a “speak-o,” the verbal equivalent of a typo. But that was
hard to believe given that Gruber elaborated on it at length, and
given that another recorded remarked quickly surfaced in which
Gruber said almost exactly the same thing. The recordings strongly
suggested that he meant to say what he said, and that he knew what
he meant when he said it.
In today’s testimony, Gruber offered a new explanation, saying
that what he meant when he made the remarks in 2012 was that he
wasn’t confident the federal government would set up an exchange;
if the federal government didn’t build a fallback, then that would
mean that states choosing not to build their own would lose access
to tax credits. In the prepared version of his testimony, he
puts it like this: “The point I believe I was making
was about the possibility that the federal government, for whatever
reason, might not create a federal exchange.”
For several reasons, it’s difficult to buy this updated
explanation. For one thing, it conveniently ignores
the question Gruber was asked in that January 2012 presentation,
which was about the establishment of exchanges. “It is my
understanding that if states don’t provide them,” the questioner
says, “then the federal government will provide them for the
states.”
In his response, Gruber doesn’t dispute this at all. In fact, he
opens his response by saying, “yeah,” in agreement with the
questioner. He does mention that the federal government has
slow-walked the creation of its exchange, perhaps in order to
encourage states to set up their own, but he doesn’t once raise the
possibility that the federal fallback won’t exist at all. Instead,
he talks only about the consequences of states declining to
establish their own exchanges, not the consequence of what might
happen if states decline and the federal government also
fails to create an exchange.
Nor does he raise the possibility that the federal government
might fail to set up an exchange in the other recording. In that
recorded speech, he says that “if your governor doesn’t set up an
exchange, you’re losing hundreds of millions of dollars of tax
credits to be delivered to your citizens.” Again, he’s not saying,
“if your governor doesn’t set up the exchange and the federal
government also doesn’t set up an exchange.” He’s just
saying that this is the result of a state not building its own
exchange.
Gruber’s suggestion that he was thinking that the federal
government might fail to create an exchange is also odd given that
the federal government is required by law to do so if a
state does not. Asked about this requirement today by Rep. Justin
Amash (R-Mich.), Gruber claimed not to recall the exact details of
what the law entails. That’s tough to believe given that Gruber
spent years as a high-profile, well-paid consultant to states
considering setting up their own exchanges. But even if he does not
remember the details now, it is even harder to believe that Gruber
did not know about this requirement back in 2012, when he was in
the midst of consulting work for multiple states.
Finally, Gruber admitted that he has come up with this
explanation for what he must have been meant entirely after the
fact. While “thinking about how I could have made that
statement, I believe that’s what I had in mind,” he said today.
This is an explicit admission that he’s rationalizing his prior
statement in order to fit with what he now believes.
Gruber’s appearance before the committee came after numerous
additional videos surfaced this fall in which Gruber suggested that
the process leading to the passage of Obamacare was
not transparent. In those videos he said that the law relied on
a convoluted structure to confuse the public about how it worked,
and was written in a “tortured” way to achieve a desirable score
from the Congressional Budget Office. His appearance was a kind of
penance and public shaming, and he repeatedly attempted to distance
himself from those remarks. Instead what he ended up proving was
that he could torture his own remarks too.
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