Obamacare and the web of deceit.

Obamacare architect caught in web of contradictions on subsidies: Kevin O'Brien

Kevin OBrien, The Plain Dealer 
 
on July 29, 2014 at 5:51 PM, updated July 29, 2014 at 6:55 PM

Jonathan Gruber, MIT economist and Obamacare salesman, now trapped by his pronouncements that only states that set up their own health care exchanges would make their residents eligible for subsidies.Charles Krupa, AP 

Hypocrisy, deception and double-talk have never been seen as disqualification for membership in the Obamacare sales force. In fact, they're standard tools of the trade. The president himself has employed them all continually and shamelessly.

It is, after all, racist to refuse Barack Obama a pass when he blatantly contradicts himself. We all get that.

But what's the mainstream media's excuse for ignoring the colossal about face of one Jonathan Gruber on the subject of the availability of individual subsidies under the Patient Protection and Affordable Care Act? Gruber has neither the pigmentation nor the office to qualify him for the get off the front pages-free card that the press has issued Obama.

Gruber is a health economist at MIT and a big-time insider present at the creation of Obamacare and its predecessor in Massachusetts.

Until last week, Gruber was a willing expert commentator on the subject of Obamacare subsidies. From now on, he's going to be an unwilling one — a star hostile witness for the plaintiffs ofHalbig v. Burwell, a lawsuit that, if successful, would deal a body blow to Obamacare's already badly stressed financial side.

The lawsuit takes the ACA at its word: To make its residents eligible for federal premium subsidies under the ACA, a state must establish a health insurance exchange.

Obamacare apologists have argued strenuously that if one squints just so and reads between the lines of the law, one will discover that the federal government is authorized to make subsidies available to people who live in states that have not established their own exchanges.

The ACA says no such thing.

Rather, Section 1311 says exchanges whose participants qualify for subsidies must be established by states. And to avoid any confusion about what "state" means, Section 1304 helpfully defines the term as "each of the 50 States and the District of Columbia."

The U.S. Court of Appeals for the D.C. Circuit came to the only legal conclusion possible: no subsidies in states that haven't established their own exchanges. If Congress had wanted to offer subsidies through federally established exchanges, it had 2,400 pages of Obamacare legislation in which to say so. It never said so.

Now comes Gruber to argue that the ACA is not to be taken at its word — that "there was never any intention to literally withhold money, to withhold tax credits, from the states that didn't take that step. That's clear in the intent of the law and if you talk to anybody who worked on the law."

He's not just arguing with the court. He's arguing with himself. Maybe the whole thing is just too wonky for the papers of record to get into, but conservative online outposts have had a field day with it.

Gruber spent a couple of years barnstorming the country warning states that they had to set up their own exchanges, and that failure to do so would cut their residents out of the subsidy pool. In a 2012 speech, the advice came out as equal measures promise and threat:

"In the law, it says if the states don't provide them, the federal backstop will. The federal government has been sort of slow in putting out its backstop, I think partly because they want to sort of squeeze the states to do it. 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. 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'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, and that they'll do it. But you know, once again, the politics can get ugly around this."

Well, he got that last part right, because in the past week, the politics have gotten particularly ugly for Gruber.

Most states didn't take the not-very-subtle hint. They declined to establish exchanges, so Obama's IRS created an administrative rule out of thin air that the administration contends confirms subsidy eligibility on residents of states whose health coverage exchanges have been established by the federal government. The Halbig suit, which says the IRS had no authority to do that, was born and state exchange salesman Gruber now finds himself in a tight spot.

"I honestly don't remember why I said that," he told The New Republic last week. "I was speaking off-the-cuff. It was just a mistake."

Later in the same interview, he coined a new term: "But there was never any intention to literally withhold money, to withhold tax credits, from the states that didn't take that step. That's clear in the intent of the law and if you talk to anybody who worked on the law. My subsequent statement was just a speak-o — you know, like a typo."

He still claims the mantle of authority on the subject: "There are few people who worked as closely with Obama administration and Congress as I did, and at no point was it ever even implied that there'd be differential tax credits based on whether the states set up their own exchange."

Except that he said himself, repeatedly and forcefully, that there would be a difference — that residents of states without their own exchanges would not get subsidies.

So at the risk of overburdening the language with new terms, it's clear that either then or now, Gruber was telling a fib-o.

Halbig undoubtedly is headed for the Supreme Court, which the Obama administration will ask to detect legislative intent in favor of subsidies under federal exchanges, though the law explicitly makes no provision for such.

Legislative intent seems an odd argument to make in favor of a law that the executive branch treats like Silly Putty whenever it decides the actual words that Congress approved are politically inexpedient.

But no matter what happens, Gruber wins. And loses.

O'Brien is The Plain Dealer's deputy editorial page editor.