In the two weeks since the federal appeals court decision against Obamacare subsidies, the Obama administration’s claim that Obamacare always intended to include subsidies for the federal exchange has been dismantled.
In addition, Obamacare architect Jonathan Gruber’s own words and writings make one thing abundantly clear: the language captured of Gruber on two separate videos stating that only state based exchanges are eligible for subsides was no “typo.”
Timothy S. Jost of Washington and Lee University has come to Gruber’s defense. Jost is no novice, and according to The Hill, “To healthcare policy experts, Jost needs no introduction. The veteran law professor has become a nationally recognized expert on the ACA in the three years since its passage. His blog posts for the journal Health Affairs are considered must-reads in Washington because of their clarity and up-to-the-minute analysis.”
In defense of Gruber, Jost has spoken out several times in the last few weeks since the two January 2012 clips were uncovered.
On July 28, 2014 on Health Affairs, Jost wrote “Of course, Professor Gruber neither drafted nor voted on the ACA, so his understanding in 2012 says nothing about what Congress intended in 2010. I would note, however, that Professor Gruber and I worked together on a study panel for the National Academy of Social Insurance on exchanges, and our publication on federally facilitated exchanges issued in December of 2011 clearly states that federal exchanges can issue premium tax credits,” he claimed. “Whatever Professor Gruber might have been thinking when he apparently made statements to the contrary in early 2012, he knew better.”
And on July 25, 2014 according to the Wall Street Journal, Jost gave a somewhat different excuse and wrote, “What I think he meant was that at that point in 2012 it wasn’t clear whether the federal exchange would be up and running in 2014, so that if you as a state want to make sure that people in your state get premium tax credits, you’ll be safer if you set up a state exchange.”
Professor Jost sure seems to know what Gruber was thinking, so I decided to see what Jost had written himself on the topic. I found several publications since the passage of Obamacare.
In an article on July 9, 2014 published in the Washington Post titled “Courts won’t void the Affordable Care Act over semantics,” Jost wrote, “The theory of these suits seems to be that the drafters of the ACA planted a secret bomb in the heart of the statute. It was so secret that it was never mentioned in any of the voluminous debates or hearings on the act.”
And in a second article on September 11, 2011 called “Yes, the Federal Exchange Can Offer Premium Tax Credits” published on Health Reform Watch, Jost wrote, “That this is a drafting error is obvious to anyone who understands the ACA… There is no coherent policy reason why Congress would have refused premium tax credits to the citizens of states that ended up with a federal exchange.”
Professor Jost’s view on subsidies appears consistent with Gruber’s “current” view. After reading Jost’s argument I became curious who was it that devised this “secret bomb”? Who was this naïve person that suggested such an “incoherent policy”? I found my answer in two 2009 reports written before the big ACA debate.
The first was titled “Legal Solutions in Health Reform – Health Insurance Exchanges: Legal issues.” In the Executive Summary, the report states, “The federal government can tax and spend for the general welfare of citizens, thus Congress could use tax incentives and its spending power to incentivize participation in a federal exchange or to develop a ‘play or pay’ framework with the states.”
The report continues, stating, “Congress cannot require the states to participate in a federal insurance exchange program by simple fiat… Alternatively it could exercise its Constitutional authority to spend money for the public welfare (the ‘spending power’), either by offering tax subsidies for insurance only in states that complied with federal requirements (as it has done with respect to tax subsidies for health savings accounts) or by offering explicit payments to states that establish exchanges conforming to federal requirements.”
The second document was a Working Paper, dated October 23, 2009, by the same writer titled “Health Insurance Exchanges in Health Care Reform Legal and Policy Issues.” In the second report, the author wrote, “The approach taken by the Senate bills is somewhat more problematic. Both bills would depend on the states in the first instance to implement exchanges. Under the HELP bill the states would be encouraged to establish exchanges complying with federal standards. Subsidies would be offered to states that established exchanges.”
Who was the author of these two reports? It was none other than Timothy Jost. I guess Gruber and Jost have more in common than just their views on Obamacare.