What does the Gruber video tell us about Halbig?

When it comes to the exchange litigation, what should we make of the Jonathan Gruber video that just came to light? In 2012, Gruber, who was heavily involved in debates over the ACA, responded to a question from the audience after a speaking engagement:

[T]hese health-insurance Exchanges … will be these new shopping places and they’ll be the place that people go to get their subsidies for health insurance. In the law, it says if the states don’t provide them, the federal backstop will. The federal government has been sort of slow in putting out its backstop, I think partly because they want to sort of squeeze the states to do it. I think 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’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, and that they’ll do it. But you know, once again, the politics can get ugly around this.

He apparently said something similar earlier that year. Gruber has since clarified that what he said “was just a mistake. People make mistakes. Congress made a mistake drafting the law and I made a mistake talking about it.”

Clarification notwithstanding, does Gruber’s statement tell us something about what the ACA means? For their part, the courts probably won’t care all that much. One person’s (disavowed) view offered two years after the ACA was enacted can’t substitute for a careful analysis of the statute.

Still, I don’t think Gruber’s statement can be written off altogether. As I’ve explained, I’m skeptical of the challengers’ claim in part because they’ve got no remotely credible evidence that Congress meant to use the loss of tax credits as a threat to get states to set up their own exchanges. To date, this Gruber video is the best they’ve found. It ain’t nothing.

But if you think what Gruber said is some evidence about what the ACA means, you can’t ignore other, similar evidence. That’s cherry-picking. So go ask John McDonough, who was intimately involved in drafting the ACA and is as straight a shooter as there is: “There is not a scintilla of evidence that the Democratic lawmakers who designed the law intended to deny subsidies to any state, regardless of exchange status.” Or ask Senator Max Baucus’s chief health adviser, Liz Fowler. She says the same thing. Or ask Doug Elmendorf, the current CBO Director: “To the best of our recollection, the possibility that those subsidies would only be available in states that created their own exchanges did not arise during the discussions CBO staff had with a wide range of Congressional staff when the legislation was being considered.” Or ask Peter Orszag, then-OMB Director: “[A]s someone who was there, [there is] zero chance this was the intent (as opposed to typo/poor drafting).”

Or ask Jonathan Cohn or Ezra Klein, both of whom followed the deliberations over the ACA closely. Neither heard a whisper about any supposed threat. Or ask Abbe Gluck, a law professor at Yale who details how “a basic understanding of the ACA’s legislative process makes clear that Congress intended for the subsidies to be available on the federal exchanges.” Or ask Aaron, who wonders, if this threat was so clear, why TIE never mentioned it. “Do you think we would have ignored this? We wouldn’t have been concerned?”

Better still, ask the states, which were on the receiving end of the supposed threat. According to a report from the Georgetown University Health Policy Institute, there’s no contemporaneous evidence that the states feared that declining to set up an exchange might lead to a loss of tax credits. How can it be that Congress unambiguously threatened the states with the possible loss of tax credits if the states never understood that threat?

In that vein, it’s telling that Gruber’s statement was made long after the ACA was passed. If Congress really meant to level a threat at the states to force them to establish exchanges, surely someone—anyone!—during the extended debate over the ACA would have said something—anything!—that made the point with comparable directness. The absence of any such statement still speaks volumes to me, whatever Gruber said in 2012.


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