Obamacare architect explained intent behind allowing subsidies only on state exchanges

Jonathan Gruber, a professor at MIT, is widely is regarded as the architect of both Romneycare and Obamacare. Following the D.C. Circuit’s decision in Halbig, he asserted that the provision of Obamacare limiting subsidies to the state exchanges was a “typo.” Indeed, he found it “criminal” to suggest that Obamacare was intended to work this way.

But William Jacobson (via one of his readers) has unearthed video from 2012 in which Gruber explains why Obamacare limits subsidies to participants in state exchanges — the view of the statute he now finds “criminal.”

Gruber stated: “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.”

This, of course, is precisely what the D.C. Circuit concluded in Halbig.

Gruber’s use of the word “politically” is the key to understanding why Obamacare limits subsidies to state exchanges. As Gruber went on to explain in the 2012 talk, by limiting the subsidies, Congress put pressure on states to open exchanges so that their citizens will receive the subsidy benefit.

Are Gruber’s 2012 remarks legally significant? They should be because, as Jacobson says, they confirm that there is a solid rationale, of which Obamacare’s architects were well aware, that explains why Obamcare, by its unambiguous terms, limits subsidies to participants in state exchanges.

It is now quite untenable to argue that interpreting Obamacare in accordance with its plain language defeats the purpose of the law, much less that this interpretation renders the law absurd. To the contrary, as Gruber said, such an interpretation is entirely consistent with the “political” purpose of the law

As a practical matter, though, Gruber’s 2012 remarks may not be of much consequence. Liberal judges will not be moved by it; presumably, their determination not to sink Obamacare is absolute.

As for the judges who matter most — Chief Justice Roberts and Justice Kennedy — they already had all the information they would need to uphold the Halbig result. For them, I suspect, the question would be whether it is politic to pull the trigger.

JOHN adds: Lest anyone doubt Gruber’s role as a principal architect of Obamacare, check out this adoring profile in the New York Times of March 28, 2012, right around the time of the video:

After Mr. Gruber helped the administration put together the basic principles of the proposal, the White House lent him to Capitol Hill to help Congressional staff members draft the specifics of the legislation.

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