Associates at Community Health Center wear buttons reading "Get Obamacare" during a session to enroll people in the nation's new health insurance system at the Community Health Center, Tuesday, Oct. 1, 2013, in New Britain, Conn.
Jessica Hill/AP

Adviser’s past remarks could give Obamacare a headache

Updated

Liberals and Democrats have been near-unanimous in ridiculing the central claim of a lawsuit that could cripple the Affordable Care Act in much of the country, dismissing it as an opportunistic attempt to bring down the law over a drafting error.

The challengers backing the lawsuit say that the law doesn’t allow the government to offer subsidies to those shopping for health insurance in federally run state marketplaces – also known as exchanges – which would make health insurance prohibitively expensive for millions of Americans.

The challengers got a boost Thursday evening when a video surfaced showing Massachusetts Institute of Technology professor Jonathan Gruber, an adviser to the Obama administration during the drafting of the health care law, saying in 2012 that subsidies weren’t available on federal exchanges.

Two federal courts came to opposite conclusions this week on whether the health care law authorized a rule from the Internal Revenue Service that allowed subsidies to be available in the federally run exchanges. The law states that the subsidies are available in “an exchange established by the state,” a formulation its challengers say bars subsidies in federal exchanges. The law’s supporters say, viewed in context, the federally run state exchanges should include subsidies. Since the law’s passage, at least 36 states, mostly run by Republicans, have refused to set up state exchanges.

One theory put forth by the challengers is that the feds wanted to pressure states to set up exchanges by denying them subsidies if they didn’t – an interpretation that would conveniently allow opponents of the law to undermine it. 

Gruber’s remarks, seen in a video discovered by a commenter on the conservative legal blog Volokh Conspiracy named Rich Weinstein, were publicized by the Competitive Enterprise Institute, a conservative group backing the lawsuits. Here’s an excerpt, which begins about 30 minutes in.

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.

Although Gruber’s remarks were made long after the passage of the law, the comments are a real problem for the Affordable Care Act’s supporters, because one of the key arguments against the lawsuits is that no one who worked on the law envisioned denying subsidies to those in federally run-exchanges.

Virtually all of the law’s supporters, from the lawmakers who voted for it it to the president who signed it, say that the subsidies were always meant to be available to federally run exchanges. Democrats and liberals hoped to undercut the challenge to the law by framing it as a partisan effort to destroy the Affordable Care Act. Gruber himself previously said that the challengers were offering a “nutty,” “screwy,” and “stupid” reading of the law.

“It’s important to remember that he’s just one person. If you think what he said is some evidence about what Congress meant, you should also care about what others who were involved in the drafting process say,” said Nicholas Bagley, a professor at the University of Michigan Law School. “And the view from those who were working on the Hill is well-nigh unanimous: Congress didn’t mean to use the availability of tax credits as a threat to get states to establish their own exchanges.”

Gruber told The New Republic that he had made a mistake

“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,” Gruber told The New Republic’s Jonathan Cohn. “But there was never any intention to literally withhold money, to withhold tax credits, from the states that didn’t take that step. 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-o—you know, like a typo.”

A second recording has surfaced showing Gruber making similar statements about subsidies not being available on federally run exchanges. Asked over email whether those remarks were a mistake, too, Gruber wrote back, “same answer.” 

Legally, the impact of Gruber’s remarks is unclear. 

“As a legal matter, it should really not carry much weight at all. To begin with, the main crux of the D.C. Circuit opinion is based in a strict textualist reading of the statute, that is looking only at the word of the statute and not to any outside sources,” said Rick Hasen, a law professor at the University of California-Irvine. “Even among those who look to legislative history, a statement of a non-legislator made outside of a hearing should be entitled to very little weight.” 

Politically, however, the video is a boon to opponents of the Affordable Care Act.

“As a political matter, I think it provides a nice piece of ammunition and rhetorical points for people who subscribe to this theory, because here you have one of the architects of the law making a statement that appears to support their position,” said Hasen.

If nothing else, expect Gruber’s remarks in the video to be repeated endlessly by conservatives trying to bring down the Affordable Care Act. 

Gruber’s statements could also help give the conservatives on the Supreme Court cover to ignore their own past statements on the subject. Abbe Gluck, a Yale Law professor, noted earlier this week that the Supreme Court’s four conservative justices who dissented from the 2012 decision upholding the individual mandate all assumed in their dissent that subsidies were available in federal exchanges. That assumption won’t bind the justices this time around – but it does show that most believed that subsidies would be available on the federal exchanges. 

“That the four dissenters contemplated subsidies on the federal exchange shows how bizarre it would be to have a law without them,” said Adam Winkler, a law professor at UCLA, in an email. “It’s not significant in a ‘gotcha’ kind of way, as this wasn’t a question specifically addressed by the court. But it is telling for how one would imagine the law would work.”

Far more than Gruber’s remarks or the appearance of hypocrisy on the part of the justices, the main political question for the Supreme Court is whether it is willing to strip millions of people of their ability to purchase affordable health insurance.  

Pointing to South Texas College of Law professor Josh Blackman, another legal analyst who made a similar observation, Hasen asked, “Is Roberts, and I would say, is Kennedy, going to be willing to deny health care subsidies to millions of people because of what Jon Stewart has called a typo?”

Correction: A previous version of this article erroneously identified Josh Blackman as a professor at the University of Texas, he is a professor at the South Texas College of Law. 

Federal Courts and Federal Judiciary

Adviser's past remarks could give Obamacare a headache

Updated