7 Facts That Prove Obamacare Subsidies Fiasco Is Not a 'Typo'

7 Facts That Prove Obamacare Subsidies Fiasco Is Not a 'Typo'

Since July 22, when a federal appeals court panel dealt a potentially major blow to Obamacare by ruling that participants in health exchanges run by the federal government in 34 states are not eligible for billions of dollars in tax subsidies, several facts have emerged which question Jonathan Gruber, an MIT economist and chief architect of Obamacare, and his views on whether the intent of Obamacare was that subsidies should only be available for state-run Obamacare exchanges. 

Here are the seven most important facts we have learned in the last ten days about Gruber’s views:

The tapes are clear – Two clips from two different speeches in January 2010 have surfaced wherein Gruber clearly states that subsidies are only for state exchanges. Specifically:

  • The clips are confirmed as Gruber speaking and in one of the clips his state-only exchange comment was made during the prepared portion of his speech
  • Gruber makes the same argument, provides significant detail, and uses similar language in both clips
  • Both speeches were made two months before Obamacare had been signed into law by President Barack Obama, but only ten months before the time individual states were required to not only notify Health and Human Services (HHS) of their intent to set up an exchange but also submit a plan to HHS specifying the implementation details of their exchange

Numerous Gruber publications support the tapes After the first clip was discovered, Gruber claimed his remarks were a “mistake” made while “speaking off-the-cuff.” However, a second video and three separate reports and articles were discovered by Breitbart that demonstrate Gruber believed Obamacare subsidies were only for state run exchanges.  

DOJ relied on a Gruber article – In order to defend itself in its Virginia Commonwealth Obamacare lawsuit, DOJ used one of the three uncovered reports, titled “Getting the Facts Straight on Health Care Reformwritten by Gruber for The New England Journal of Medicine in December 2009. In the lawsuit, the Commonwealth argued that Congress exceeded its Article 1 powers in enacting Obamacare. Page 6 of DOJ’s Reply Memorandum in Support of Defendant’s Motion for Summary Judgment specifically names Gruber’s article – “See, e,g., Jonathan Gruber, Getting the Facts Straight on Health Care Reform, 361 NEW ENGL.J. OF MED. 2497, 2498 (2009).” 

Gruber spent significant time reviewing the Senate-proposed Obamacare bill and strongly supported the plan – As an article published on the Huffington Post by Jane Hamsher titled “How the White House Used Jonathan Gruber’s Work to Orchestrate the Appearance of Broad Consensus” makes clear: 

On Monday the 23rd, the DNC was sending the Brownstein column around in its entirety…one of 71 emails they would send touting Gruber’s work and it was included in OFA’s Monday Morning News Clips on BarackObama.com.

The Brownstein article mentioned above was published on November 21, 2010. The Senate bill had been read into the record and placed on the Senate Legislative Calendar under General Orders on December 24. Brownstein starts this widely distributed article by saying:

When I reached Jonathan Gruber on Thursday, he was working his way, page by laborious page, through the mammoth health care bill Senate Majority Leader Harry Reid had unveiled just a few hours earlier. Gruber is a leading health economist at the Massachusetts Institute of Technology who is consulted by politicians in both parties.

The article quotes Gruber as saying “Everything is in here… I can’t think of anything I’d do that they are not doing in the bill. You couldn’t have done better than they are doing.”

Congress relied on Gruber – As Michael F. Cannon, Cato Institute’s Director of Health Policy Studies, points out in his blog, “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.”

However, as highlighted in the Hamsher article, then-Speaker Pelosi touted “the Gruber Analysis” on her website. Furthermore, Senator Reid read from the piece on the floor of the Senate, saying that it provided substantiation from someone “who is one of the most respected economists in the world.” Moreover, on December 3, Kathleen Sebelius released a statement on the “Benefits of Health Insurance Reform for Businesses.” She substantiated claims made in the statement by citing Gruber’s November 3 testimony before the HELP Committee, and his November 5 paper. 

Gruber’s argument is logical – During the January 2010 time period when these two recently uncovered clips of Gruber occurred, individual states were considering whether or not to set up their own exchanges. Even though HHS was pressuring states to establish their own exchanges, many governors, especially Republican governors, were balking. Gruber’s comment–“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”–is a logical argument and a form of leverage HHS and the Obama administration likely used to pressure GOP governors to set up their own exchanges.

Gruber’s independence and credibility are damaged – Having a second tape and several publications emerge after Gruber claimed it was a “mistake“he  made while “speaking off-the-cuff” has severely damaged Gruber’s credibility. Unfortunately for Gruber and the Obama Administration, this is not the first time Gruber’s credibility has been questioned. In January 2010, after he had made numerous speeches and had several of his publications widely distributed and heralded as credible independent work, Gruber had to admit he was not independent. And, as Jane Hamsher wrote in her article, “In December 28, Gruber published an op-ed in the Washington Post — in which he neglected to mention his contract to consult with the White House on this very issue. He was asked point-blank if he had any contracts related to the piece for which he was being paid, and he said ‘no.’  The Post subsequently published a correction.”

In the less than two weeks since the federal appeals court decision, the Obama administration’s claim that Obamacare always intended to include subsidies for the Federal exchange has been dismantled. Now, Obamacare appears headed back to the Supreme Court, where even more damaging material is sure to emerge. Whatever the outcome, Obamacare architect Jonathan Gruber’s own words and writings make one thing abundantly clear: the language stating only state Obamacare exchanges are eligible for subsides is no “typo.”


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