Although Gruber’s remarks were made long after the passage of the law, the comments are a real problem for the Affordable Care Act’s supporters, because one of the key arguments against the lawsuits is that no one who worked on the law envisioned denying subsidies to those in federally run-exchanges…
“As a legal matter, it should really not carry much weight at all. To begin with, the main crux of the D.C. Circuit opinion is based in a strict textualist reading of the statute, that is looking only at the word of the statute and not to any outside sources,” said Rick Hasen, a law professor at the University of California-Irvine. “Even among those who look to legislative history, a statement of a non-legislator made outside of a hearing should be entitled to very little weight.”
Politically, however, the video is a boon to opponents of the Affordable Care Act.
“As a political matter, I think it provides a nice piece of ammunition and rhetorical points for people who subscribe to this theory, because here you have one of the architects of the law making a statement that appears to support their position,” said Hasen.
Why is this so important? Because Gruber made this argument in January 2012. This was after the filing of Pruitt v. Sebelius (a Halbig-like case brought by Oklahoma’s state attorney general) but before the U.S. Supreme Court’s ruling on the constitutionality of the Affordable Care Act, and before all the other related cases were filed. At the time he gave this talk, Halbig’s argument was barely on the radar. Yet Gruber, one of the law’s architects, clearly had an understanding of the provision that liberals now say no one shared.
I’ve listened to Gruber’s whole presentation to make sure this wasn’t a poorly phrased snippet unfairly clipped out of context. It’s not. Gruber is succinctly stating the argument made by the plaintiffs in Halbig: that premium subsidies will not be available on federal exchanges, and that this is supposed to incentivize states to build their own exchanges.
To be sure, this was still two years after the law passed, and my understanding is that the court is not supposed to pay attention to post-facto statements about the law’s effect or intent. But unless this is some sort of elaborate hoax, I think this definitively puts to rest the notion that none of the bill’s architects could possibly have thought or intended that the law would have this effect. Gruber thought the law would have this effect — and if anyone would know, he would.
GRUBER: You know, someone wrote today a very clever thing, which is whenever we fight about the Constitution, we always wonder, Well, what did the framers really mean? Well, in this case, we don`t have to wonder. We know what the framers of this law meant. We can ask them. We can go to the people who wrote this law and say, Did you ever intend this as a poison pill, or is it just a typo? And every single one of them say it`s just a typo.
So there`s no mystery here. There`s no wondering about original intent in writing this law. This typo — this is just a typo. And if the courts pass this and if it eventually makes it to the Supreme Court, we`re talking about seven million Americans who would become uninsured because of this typo, if they really interpret it that way. It’s just crazy.
I don’t mean to overstate the importance of this revelation. Gruber acknowledging this feature of the law is not direct evidence of congressional intent. But Gruber is probably the most influential private citizen/government contractor involved in that legislative process. He was in the room with the people who crafted this bill. There may be videos of them talking about this feature too. (I wouldn’t know; I only researched congressional statements made pre-enactment.) At a minimum, however, with the D.C. Circuit and the Fourth Circuit and now Jonathan Gruber lining up against the idea that it is implausible that Congress could have meant what it said, we can dispense with that argument once and for all.
Interestingly, Gruber changed his story around the same time it seemed this provision might imperil the statute he had worked so hard to craft, enact, and protect.
Just one year later—after the IRS issued a final rule purporting to authorize tax credits in federal Exchanges, after Jonathan Adler and I published our research on this issue, and after people started filing lawsuits challenging that final rule—Gruber was singing a different tune…
Gruber really does have one of the greatest empirical minds in health economics. When he’s not wearing his advocacy hat, I pretty much take what he says as gospel. So when he claims this or that economic dynamic makes it implausible that Congress meant what it said, I guarantee he was aware of all those factors back in 2012. To claim he wasn’t, now that would be implausible.
As I wrote a few months ago, this is also the same Gruber who said in January that Obamacare wasn’t designed to save money, even calling the idea that savings were a “misleading motivator” for Obamacare. This was after he very actively promoted the deficit-reducing side of the law before it was adopted and called Obamacare “a historic and cost-effective step in the right direction” toward saving our health-care cost problems. He’s also the guy whose work was used to create the appearance of a consensus among health economists about the ACA, without revealing that he was a paid contractor.
Gruber has a history of saying interesting things about his favorite health law. “What we know for sure,” he told Ezra Klein in 2009, “is that [Obamacare] will lower the cost of buying non-group health insurance.” In fact, Obamacare has increased the underlying cost of non-group health insurance by 49 percent in the average county. Now, Gruber says that Obamacare “isn’t designed to save money.”
I wrote on Tuesday that both sides are wildly exaggerating the policy implications of this D.C. court decision. If the Supreme Court upholds the appeals court ruling in Halbig v. Burwell, every state government will set up its own exchange. In other words, the ruling is nothing but a speed bump for Obamacare.
But it’s important for the public record to reflect the fact that it’s not “nutty” or “stupid” or “cynical” or “dishonest” to assert that the Affordable Care Act only authorizes the flow of subsidies through exchanges established by state governments. That’s in fact what the law actually says. It’s what the D.C. Court of Appeals ruled that the law says. And no less an authority than Obamacare’s principal architect, Jonathan Gruber, agrees.
I believe that Gruber sincerely does not remember making these remarks. Memory is fallible; at some point, Gruber probably changed his mind and forgot that he had ever believed otherwise. People show a strong tendency to edit their recollections of prior beliefs to reflect the “correct” answer, and even brilliant economists are not immune to this common cognitive bias.
But though I do not fault his honesty, I also think that in January 2012, Gruber did believe that premium tax credits would only be available on state-created exchanges, and that this would give states a strong incentive to create exchanges.
We can draw two conclusions from this: First, the reading of the law by Halbig’s plaintiffs is clearly not ridiculous or dishonest; if it is a mistake, it is a mistake that one of the law’s chief architects could make. And second, we should be very skeptical of people who are now telling us, four years later, what the legislative intent was. Memory really is extraordinarily unreliable, and as we see here, it’s very easy to forget what you believed even a couple of years ago. This is one reason that courts ignore post-facto statements about intent and concentrate on the legal text and the legislative history.
Letter to the Honorable Darrell E. Issa Providing Additional Information About CBO’s Cost Estimate for H.R. 4872
December 6, 2012
This letter responds to Chairman Darrell E. Issa’s request for information about CBO’s March 20, 2010, cost estimate for H.R. 4872, the Health Care and Education Reconciliation Act of 2010, in combination with H.R. 3590, the Patient Protection and Affordable Care Act. Specifically, the chairman asked for a description and explanation of CBO’s assumption that the premium assistance tax credits established by that legislation would be available in every state, including states where the insurance exchanges would be established by the federal government.
To the best of our recollection, the possibility that those subsidies would only be available in states that created their own exchanges did not arise during the discussions CBO staff had with a wide range of Congressional staff when the legislation was being considered. Nor was the issue raised during consideration of earlier versions of the legislation in 2009 and 2010, when CBO had anticipated, in its analyses, that the credits would be available in every state. CBO’s analysts reviewed H.R. 4872 and H.R. 3590 to try to ensure that the agency’s estimate accurately reflected the legislative language, as they do for all legislation that they analyze, but that question did not arise in the course of that review, and CBO did not perform a separate legal analysis of that issue.
Via the Corner.