The big story of the day is that Obamacare foes have unearthed what they call a smoking gun: Video of Jonathan Gruber, a key architect for the Affordable Care Act, in January 2012 seeming to endorse the argument that subsidies would not be available to those who get coverage on the federal exchange. This seems to bolster the case made in Halbig — that the law never was intended to provide subsidies to the three dozen states without their own exchanges — which, if upheld by the Supreme Court, would gut the law.
In an interview with Jonathan Cohn, Gruber claims he made a mistake, suggesting he merely meant that if the federal government delayed setting up exchanges in states that had refused to create their own, people in those states might not get subsidies right away. “There was never any intention to literally withhold money, to withhold tax credits, from the states that didn’t take that step,” Gruber said.
I’ve tracked down several Gruber interviews and studies that show him discussing these subsidies as national in scope, and undercut the idea that he thought at the time that subsidies wouldn’t go to states without their own exchanges. These occurred before, concurrent with, and after the controversial interview in question — and as such, they support the suggestion that he may have merely erred.
In fairness, these examples don’t definitively prove he made a mistake in the video. But they bolster the possibility that this is what might have happened.
1) Wisconsin governor Scott Walker turned down the money to set up the state exchange in January of 2012. Yet in February of 2012, Gruber, who had conducted an earlier study on the impact of subsidies on Wisconsin’s individual market, was still discussing that study as relevant, and the Daily Caller was treating that study as relevant, too.
And as late as September 2012, many months after Wisconsin said it would not take the money for the state exchange, Gruber publicly discussed a new study he’d worked on that assumed the subsidies would still go to Wisconsinites. That study is here.
All this is hard to square this with the idea that he thought subsidies wouldn’t go to any state that wasn’t setting up its own exchange. “In my reports on Wisconsin I never assumed that the state would run its own exchange — whether it did or not was irrelevant for my reports,” Gruber tells me. (See clarification below.)
“I have worked with a wide variety of states that are and are not setting up state exchanges,” Gruber emailed me. “In every single case I assumed that tax credits would be available to their residents, as is clear from any sensible reading of the Affordable Care Act.”
2) Here’s Gruber in a March, 2012, interview with the Daily Beast:
The bottom line is that the ACA approach is one where we redistribute toward those in need, but within a budget-conscious approach that makes individuals who can afford care pay for it. Basically, those who are below the average income in the U.S. either get free public insurance (if they are very poor) or get tax credits to offset the cost of private insurance, so that no one has to pay more than 9.5 percent of income for quality insurance.
Again, that’s plainly national in scope — those below the key income level in the United States — and there’s no mention of any individuals in any states not qualifying.
3) Here is Gruber in a January 2011 paper:
The second way that the Affordable Care Act addresses the high costs of nongroup insurance is through the introduction of new tax credits to make health insurance affordable through the exchange. The typical middle-class family in the United States would now be provided financial support to ensure that they would not have to spend an unfair amount for the insurance they need to protect their family.
Again, plainly national in scope. Indeed, the context is a discussion of the fact that the law establishes “exchanges in every state.” As early as February 2011 Republican governors were already discussing the possibility of not setting up their own exchanges.
4) In studies Gruber has conducted to assess the impact of the Affordable Care Act, he has based his modeling on the assumption that the subsidies are national. Here is how he describes the subsidies in a June 2011 study:
Under the ACA, these subsidies come in two forms. The first is an expansion of the Medicaid program to all individuals with incomes below 133 percent of the poverty line…The second is tax credits to offset the cost of private non-group insurance. These tax credits are designed to cap the share of income that individuals have to spend to get insurance….
The subsidies go to all individuals who qualify; there’s no controlling for states being excluded.
None of this is definitive. Gruber’s quotes in the newly surfaced video — and in another problematic interview that has now come to light — show him claiming flatly that the possible denial of subsidies would be an incentive to states to set up exchanges. My above examples do not show him definitively saying the opposite — they don’t show him definitively saying subsidies do definitely go to those on the exchanges. But they certainly bolster the possibility that he did think this and erred in those interviews.
Beyond this, it isn’t even clear how relevant Gruber’s quotes are to the core question that will decide this case, which is what did Congress intend for the Affordable Care Act. On that question, Jonathan Cohn makes a pretty good case that the available evidence undercuts the Halbig view.
CORRECTION: I originally botched the timeline on the Wisconsin exchange. Here’s how it went. The Gruber study I originally referenced of the subsidies’ impact was actually done in 2011, before Wisconsin governor Scott Walker turned down the money to set up the exchange, which happened in January of 2012. I apologize for the error.
However, here are some additional facts. Gruber was still discussing his study as relevant in February of 2012, after Walker’s decision, as was the Daily Caller. And as late as September 2012, many months after Wisconsin said it would not take the money for the state exchange, Gruber publicly discussed a new study he’d worked on that assumed the subsidies would still go to Wisconsinites — that study is here — which would seem to suggest he didn’t think they would not be forthcoming.
“In my reports on Wisconsin I never assumed that the state would run its own exchange — whether it did or not was irrelevant for my reports,” Gruber tells me.
I said above that the interviews and studies I cited did not definitively prove that he had merely erred in his interviews. I do think that everything I cited still clearly bolsters the possibility that he erred. But I was sloppy in my first stab at this, and I shouldn’t have been. I’ve rewritten the above to clarify.