Jonathan Gruber was wrong!

7/25/2014 03:40:00 PM
Today Halbig's proponents are pouncing on the discovery of tape (above) from January 2012 in which health economist and Obama administration consultant Jonathan Gruber said:
"What’s important to remember politically about [Obamacare] 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. 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. But, you know, once again the politics can get ugly around this."
Unlike their previous evidence of Max Baucus's comments in a senate hearing, this one actually does say what they claim: for whatever reason, in January 2012 Gruber was under the impression that subsidies would not be available on federal exchanges.

However, this only supports the Halbig proponents' case if you ignore the dates. For one thing, 2012 is quite a long time after the ACA was signed into law, so that anything said in 2012 can't really be taken as evidence of what congressmen thought in 2009. But more importantly, at the time Gruber made these remarks he was already unambiguously wrong: 45 CFR 155.20, the section of federal regulations that defines "an exchange established by the state" to include federal exchanges, was proposed on July 15th, 2011, well before Gruber's remarks.

Gruber, of course, was not a member of Congress and his comments can't be construed as Congressional intent. But if you want to take his comments as evidence of the Obama administration's intent, you are simply wrong--they had explicitly and publicly taken the opposite position at least 7 months prior to Gruber's remarks! Here's how the administration described it's views at the time:
"The definition for an “Exchange” in §155.20 is drawn from the statutory text in section 1311(d)(1) and 1311(d)(2)(A). We interpret section 1321(c) of the Affordable Care Act to mean that this definition includes an Exchange established or operated by the Federal government if a State does not establish an Exchange."
That's pretty unequivocal, was made public well before Gruber's remarks, so don't go claiming that as of 2012, the Obama administration believed federal exchanges would not receive subsidies.

As a final thought, the proposed interpretation was made public in July 2011 explicitly for the purpose of soliciting public comment. A relevant question, and one to which I do not have an answer, is whether anyone submitted a comment challenging the administration's interpretation of "an exchange established by the state" for the purposes of calculating subsidies. That would be helpful in ascertaining whether anyone actually believed the Halbig proponents' interpretation at the time the rule was proposed. I'm hoping that a reader somewhere will have this answer.