An online video has surfaced in which MIT professor Jonathan Gruber, one of the top outside experts consulted during Obamacare’s drafting, appears to endorse the view advanced by conservatives that the law’s tax credits would not be available for people using HealthCare.gov.
The Competitive Enterprise Institute, a conservative think tank, published the video on Thursday evening. The organization said it was shot at a January 2012 event hosted by Noblis, a non-profit research group, at which Gruber spoke.
During a Q&A session, Gruber was asked in the video about Obamacare’s health insurance exchanges. He said he thought the federal government “wants to squeeze the states” to set up their own exchanges by being slow to develop the federal website, which would be the back-stop for any state that didn’t establish one. He then moved onto the tax-credit issue.
“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,” he said in the video. “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 and that they’ll do it. But, you know, once again the politics can get ugly around this.”
It is not clear what Gruber’s rationale would have been for taking this position at the time, and he did not immediately respond to TPM’s request for comment on Friday. The final Internal Revenue Service rule covering the tax credits was released in May 2012, several months after Gruber spoke in the video.
A federal appeals court ruled earlier this week that, based on Obamacare’s language, tax credits should not be available to people who use HealthCare.gov. Another appeals court ruled the opposite way on the same day. The issue could be heading to the Supreme Court. If tax credits were invalidated for the federal exchange, it could affect nearly 5 million people in the 36 states using the website and send premiums skyrocketing.
The health policy world was quickly consumed by the Gruber video, and conservatives seized on it as supporting evidence that the tax credits should not be allowed for those shopping on HealthCare.gov and that this was Congress’s intent all along.
“Gruber is not a member of Congress, so this isn’t direct evidence that Congress intended to offer tax credits only in state-established Exchanges,” the Cato Institute’s Michael Cannon, a major force behind the lawsuit, wrote. “But he may be the next best thing.”
Others who followed Obamacare from its early days seemed perplexed by Gruber’s comments in the video.
1. These comments from Jon Gruber are so bizarre and fascinating: http://t.co/I5m87cWLZT
— Ezra Klein (@ezraklein) July 25, 2014
2. I interviewed him dozens of times in this period and never heard anything like this.
— Ezra Klein (@ezraklein) July 25, 2014
While Gruber’s is not the final word on congressional intent, he was intimately involved in helping to draft the law. The New York Times reported in 2012 that he worked closely with the White House and congressional staff while the bill was being developed.
More recently, though, Gruber has dismissed the current lawsuit challenging the tax credits on HealthCare.gov.
“It is unambiguous this is a typo. 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?” Gruber said this week on MSNBC. “Why would Congress set up the mandate and go through all that political battle to allow it to be destroyed? It’s just simply a typo, and it’s really criminal that this has even made it as far as it has.”