Jonathan Gruber describes Obamacare, circa 2012

by on July 25, 2014 at 12:46 am in Current Affairs, Law, Medicine | Permalink

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 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.

There is more detail here, from Peter Suderman, along with the video and also the fuller context for those (such as myself) who have not been following this issue very closely.

jeff July 25, 2014 at 12:52 am

*mood afilliation*

Evan Harper July 25, 2014 at 8:57 am

Shh, only Tyler is allowed to dismiss things as “mood affiliation” without any argument or explanation.

bavery99 July 25, 2014 at 12:57 am

What Gruber says immediately before the portion quoted above

“They’ll be the place that people go to get subsidies for health insurance. In the law it says if the states don’t provide them the federal backstop will” – Gruber

Seb July 25, 2014 at 3:56 am

At that point he is saying you will go to the state exchanges and get subsidies and if the state doesnt provide exchanges the feds willprovide an exchange as backstop but then he goes to the quoted text to say that a state that doesnt provide exchanges they gets the fed exchange but no subsidies.

He is consistent in explaining that the dual structure was designed on purpose.

Bill July 25, 2014 at 9:46 am

Isn’t the DC Circuit saying that IF the state does not establish an exchange, then there is no subsidy. But, some states DID use the Federal backstop exchange and DID choose to be in the program, so Tyler’s excision misstates Gruber’s statement by leaving out the first sentence.

The other question I have is this: the state can make the Federal Government an agent for the purpose of running an exchange. Who said the state can’t delegate to others to set up or administer an exchange.

Bill July 25, 2014 at 4:17 pm

“Putting aside the fact that no one thought the states wouldn’t want to run the exchanges themselves (indeed, Senators were demanding that option for their states), the exchange provisions simply do not work in the same way as Medicaid. Unlike the ACA’s Medicaid provisions, the exchange provisions have a federal fallback: Medicaid is use it or lose it; the exchanges are do it, or the feds step in and do it for you. In other words, this isn’t Medicaid; it’s the Clean Air Act (CAA). If a state decides not to create its own implementation plan under the CAA, its citizens do not lose the benefit of the federal program—the feds run it. The same goes for the ACA’s exchanges and so it would be nonsensical to deprive citizens in federal-exchange states of the subsidies. More importantly, if we are going to compare apples to oranges, the ACA’s Medicaid provisions have an explicit provision stating that if the state declines to participate, it loses the program funds (this was the provision at issue in NFIB v. Sebelius in 2012). The ACA’s subsidy provisions, in contrast, have no such provision, strong evidence that the subsidies were was not intended to be forfeited if the states did not participate. If the challengers are going to insist on strict textual arguments, this is exclusio unius 101: the rule of interpretation that provides that where Congress includes a specific provision in one part of the statute but does not include an analogous provision elsewhere, that omission is assumed intentional.”

Handle July 25, 2014 at 10:43 am

Clearly a drafting error.

Doug July 25, 2014 at 3:14 pm

The “They’ll” and “them” in that sentence refers to state exchanges. So replacing the pronouns, the quote reads:
“The state exchanges will be the place that people go to get subsidies for health insurance. In the law it says if the states don’t provide the state exchanges, the federal backstop will. 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.”
In other words, just as Tyler’s quote implies, he is saying that if there is no state exchange, you get to use the federal exchange as a backstop to actually get insurance, but you don’t get to have any tax credits (i.e. subsidies). Not misleading at all to leave out the first sentence.

Bill July 25, 2014 at 4:18 pm

See my comment above.

Edwardseco July 25, 2014 at 1:05 am

But, they told us no new taxes:)..

Jan July 25, 2014 at 6:14 am

Wrong president.

Michael July 25, 2014 at 10:24 am

No, in 2008, Obama did, in fact, say that he would not raise taxes of any kind on people who made less than $250k. Here’s a direct quote:

“I can make a firm pledge,” Mr. Obama said in September 2008. “Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.”

http://www.nytimes.com/2012/12/07/business/obamas-tax-plan-would-spare-many-affluent-families.html?_r=0

Boonton July 25, 2014 at 11:48 am

Which of those taxes (income/payroll/capital gains) was increased for a family of $250K or less in the ACA bill?

ZZZ July 25, 2014 at 12:00 pm

What part of “any form of tax increase” was unclear?

Boonton July 25, 2014 at 1:32 pm

Well when you list a set of specific and major types of taxes that makes it rather unclear. If the price of postage stampes goes up a nickle I suppose some partisans will claim that’s a ‘tax on mail’ but normal people are more concerned with income/payroll/capital gains taxes (and actually the first two more than the 3rd).

Marie July 25, 2014 at 7:12 pm

I think the day I’m federally required to mail a letter I’ll consider an increase in the price of a stamp to be a tax increase, yes.

TallDave July 28, 2014 at 10:51 am

Section 1401 imposes a 40 percent excise tax on “Cadillac” health insurance plans. This new tax will apply to health plans valued in excess of $10,200 for individuals and $27,500 for families. Those thresholds will grow annually by inflation plus 1 percent. The tax takes effect in 2018 and is projected to raise $32 billion by 2019.

Jan July 25, 2014 at 1:04 pm

He was talking about his particular plan at that time, in the middle of an economic crisis. It’s not like a pledge that says he will never sign a bill that raises taxes under any circumstance.

TallDave July 28, 2014 at 10:52 am

“I pledge to never do X, unless my plans change.”

dearieme July 25, 2014 at 3:53 am

Margaret Thatcher was brought down over the fiasco of the Community Charge aka Poll Tax. O would seem to have a similar fiasco on his hands, though presumably less of the media will be keen to beat it up.

andrew' July 25, 2014 at 5:24 am

We won’t even pause to tip our hat at tax extortion tactics on our way to ignoring the law in some way (ignoring it with a court order not to will just mean a little more work).

The usefulness of the tax extortion is in the past, so it is time for the law to mean something else.

Just Another MR Commentor July 25, 2014 at 7:45 am

Margaret Thatcher was an anti-free market ideologe and that’s what brought her down. She refused to accept the truely liberal idea of free movement of labour and open borders when she blocked the Argentine immigration to the Falklands in 1982.

Brian Donohue July 25, 2014 at 9:37 am

I happened to be in London at the time, and I loved the way Thatcher went down swinging.

Of course, it’s a bit of a poor analogy, because Thatcher was run out by her own party, not the voters, and Obama can’t run again anyway.

On the other hand, there is the recent tradition in American politics, going back to Reagan and peaking with the impeachment of Clinton, of the opposition party trying to bring down two-term lame duck Presidents, which I find an expensive distraction and waste of time.

prior_approval July 25, 2014 at 11:36 am

Actually, that recent tradition started with Nixon.

andrew' July 25, 2014 at 4:40 am

Gruber was paid what? Interesting we don’t get much comment in that.

Earl July 25, 2014 at 1:36 pm

Gruber got $400k. Of your money.

Jan July 25, 2014 at 6:20 am

So, assuming it works out that subsidies can only be awarded via state run exchanges, this will become kind of like the Medicaid expansion. The question will be whether state leaders are too stupid and too apathetic about their citizens’ health care needs that they leave tons of federal assistance on the table (which their residents pay in federal taxes) to make a political point.

chuck martel July 25, 2014 at 6:43 am

That’s the federal technique of coercion. Enact a state law that makes driving with a blood alcohol content over .08 a criminal offense or no money for road repairs. The state legislatures are black-mailed into following the federal program.

Jan July 25, 2014 at 8:02 am

Too bad it didn’t work for Medicaid expansion.

Dave Anthony July 26, 2014 at 1:36 pm

Why? Medicaid has been proven very ineffective and provides healthcare outcomes no better than the uninsured. Sounds like an expensive waste of money.

Boonton July 25, 2014 at 9:19 am

How is that blackmail? If the state needs money from the Feds for road repairs then by definition they are saying they want taxpayers who live in *other* states to fund a portion of their roads. Sorry but if you’re going to ask someone for something they are going to ask you for something in return. If they want uniform DUI laws then that may be the price you pay for not funding your own roads fully.

Rusty Synapses July 25, 2014 at 11:27 am

I don’t think you’re looking at this correctly. The money is taken from all, then given back to those who comply. That’s not to say that if you comply, you’re looking to other states to fund (your roads, for example) – you could still get back less than you put in, even if you comply. The point is the federal power to tax, when combined with conditions on state grants, is a strong force to coerce states to do almost anything (if you have whatever federal approval you need for the plan) – you get to take money, and put whatever conditions you want on giving it back (although S. Ct. just recognized a limit on that with Obamacare).

I (weakly) support Obamacare and medicaid expansion, but I actually don’t think the Republicans who are resisting medicaid expansion are wrong in their views (they are not just being cruel to the poor by denying “free” money) – there is inertia once expanded, and no guarantee funding won’t be cut in the future – I’m not sure I believe anyone is being sincere who doesn’t admit that’s a realistic possibility.

Boonton July 25, 2014 at 1:35 pm

That might be valid if the states that didn’t want the DUI laws also were demanding massive tax cuts coupled with massive reductions in spending. In reality they want Federal money but not conditions on that money, which makes sense. Federal politicians do the dirty work of collecting the taxes while the state politicians get the glory of arranging for nice new roads and bridges while claiming to voters they didn’t tax them anything. It’s hardly unreasonable then for the Fed. politicians to more or less say “if you’re going to offload the blame to us then you have to give us something too….like being able to claim we got tough on drunk driving”.

mulp July 25, 2014 at 1:49 pm

If isn’t “free money” going to the poor but “free money” going to Medicare dependent facilities that must provide “free services” to the poor by Federal mandates. The Republicans are not the ones acting on the principle that hospitals must be mandated to provide free stuff because Republicans want to redistribute from crony capitalists to the poor.

No Republican has to my knowledge proposed ending EMTALA and calling for hospitals to refuse to help those at risk of severe medical problems who can’t pay cash or provide good insurance policy benefits.

And that is the Republican free lunch economics where Republicans can attack Obamacare as big government solution to a problem that does ot exist because NO ONE IS DENY NEEDED HEALTHCARE IN AMERICA because the free market obviously provides free stuff to the poor who have no money.

Andrew' July 25, 2014 at 7:11 am

Or: “the question will be whether federal leaders are too stupid and apathetic about choice that they don’t pass a law allowing people to opt out.”

Jan July 25, 2014 at 8:09 am

If you consider Congress is comprised of members elected by people from all the states and that these members are charged with passing policies that benefit all citizens, it’s weird they would want to give states an option to opt out of something that would be good for every state.

Boonton July 25, 2014 at 9:22 am

Opt out how? Say a state doesn’t want to do an exchange? Fine they don’t have too. So the Feds do one. The Feds give subsidies to people in that state who go to the exchange and buy insurance.

Hang on, whose opting who out here? If everyone in Texas hates Obamacare then no one will buy a policy from the exchange and there’s no Federal subsidy for anyone. But if there are citizens in Texas who go to the exchange who exactly is the state of Texas to ‘opt them out’ of subsidies?

Marie July 25, 2014 at 7:18 pm

Plenty of people in Texas who don’t like ACA will use the exchanges because ACA has taken other options out of their reach.

In fighting ACA as a state, the hope would be to return those other options. It’s quite a gamble, but individual Texans opting out will go broke or be breaking the law and will have little impact on ACA, but the entire state opting out might have some influence and no one is breaking the law. It’s a little like collective bargaining.

Michael July 25, 2014 at 10:32 am

You’re assuming your conclusion, which is that O-care style healthcare actually improves people’s health, on net. A big part of the right’s concern with the law is that it doesn’t, or, at least not relative to the cost. (On the Medicaid expansion, they have solid facts and studies behind them.) On the health insurance portions of the law, it is a fundamental point behind the objection to the law.

It is a fallacy to think that people who don’t share your ideological particulars are ‘stupid’.

Oakchair July 25, 2014 at 11:20 am

The evidence from Massachusetts shows that Obamacare will improve peoples health
http://www.washingtonpost.com/blogs/ezra-klein/post/study-romneycare-is-making-massachusetts-healthier/2011/08/25/gIQA524T7R_blog.html
And Massachusetts didn’t expand wellness programs, provide billions in funding to increase healthy food choices for neighborhoods lacking them, mandate restaurants provide nutritional labeling, make smoking cessation programs free, increase funding and rules to increase breast feeding, increase funding for at home nurse visits etc etc etc.
So a big part of the rights concern isn’t based on reality.

Michael July 25, 2014 at 12:30 pm

That study relies entirely on self-report health data, which should always be view with a bit of skepticism. But, the important point is the cost tradeoff of it, how much health improvement for how many dollars? Because of O-care, I now have a health care plan with chiropractic, acupuncture and in-patient drug rehab coverage. All of which are expensive with little to no actual health benefits. Add in the mandates for drug coverage for name-brand prescriptions where there are effective generics, and the dozens of other hidden costs, and the case for the law starts looking soft.

mulp July 25, 2014 at 1:53 pm

Why are you using “chiropractic, acupuncture and in-patient drug rehab coverage” just because its included?

Or are you arguing that only the AMA should be allowed to decide on allowed medical care and the drug users should be sent to prisons?

Oakchair July 25, 2014 at 2:19 pm

You could view it as untrue if you think there was a state wide conspiracy where everyone decided, “hey were going to lie and say we’ve gotten healthier so that 4 years from now people can use it to advocate for obamacare!!!”
—-how much health improvement for how many dollars?
Well given that the only three studies ever done on the costs of obamacare found that after 10 years it would slightly lower total health costs (despite expanding coverage to 30million). Your question is kind of a weird one to ask.
The case of the law only looks soft if you ignore all the evidence.

Michael July 25, 2014 at 2:47 pm

Mulp,
Apparently you don’t know how insurance works. You have to pay the premium, no matter whether you use the service or not. And now I’m legally obligated to pay that premium.

Oakchair,
Maybe you should pay a little attention to the relevant studies on the matter. Self-report studies are interesting, but highly unreliable. They can shed some light on areas where there is corroborating evidence, but in this instance, none was cited.

Oakchair July 25, 2014 at 4:54 pm

Despite Massachusetts seeings its uninsured rate decrease (from 8.4% to around 3%) hospital admissions for preventable reasons fell by 2.7%. So even as more people had access to health care in Mass they saw a decline in preventable diseases needing hospital admissions.
http://www.nber.org/digest/nov10/w16012.html

Boonton July 25, 2014 at 11:47 am

(On the Medicaid expansion, they have solid facts and studies behind them.)

No they don’t.

Michael July 25, 2014 at 2:47 pm

And your evidence is?

Boonton July 25, 2014 at 4:01 pm

Flash, you are walking down the street and you suddenly have a heart attack…you clutch your chest and fall to the ground. Horrified people call 911 and you are rushed to a hospital.

I think whether or not you have coverage will at this point matter less than factors like how close is the hospital, how good are they etc.

Flash, we invent a time machine and go back a week in time and give you health care coverage (say you didn’t have it). Would the outcome change in a week when that heart attack happens? Not likely…maybe if you immediately got to a doctor and immediately got some type of diagnosis and started treatment. Chances are it won’t matter.

Flash, we go back 6 months and give you coverage. Again chances of things turning out differently are still going to be slim IMO.

But…

Flash, we go back 5 years. Well now things get interesting. Perhaps for 100 ‘yous’ in alternative universes so many get on BP medication, so many get lectured about exercise etc. Differences will start to emerge.

Long story short there’s no reason to expect to see an immediate change in health outcomes upon the expansion in coverage, instead one has to track coverage over a period of years, even over a decade instead.

Thomas July 25, 2014 at 4:49 pm

Nothing like short stories for evidence. Boonton, MFA?

Boonton July 25, 2014 at 5:21 pm

Actually the assertion that health insurance is useless to health is something that people who make it are obligated to provide evidence to support. My little story illustrates why simply looking at the health metrics of people who switched from uncovered to covered a shortwhile ago is likely flawed.

Marie July 25, 2014 at 7:22 pm

Boonton,

Do you have any reason to believe the folks who now have coverage under ACA are using the preventative treatments you claim common sense argues will pay off in the long run? And you are aware that the jury is still out on whether more involvement over the course of a lifetime with medical professionals actually improves health outcomes in the long run or not, right?

Boonton July 25, 2014 at 9:07 pm

Jury still out? Yes I’m fine with that assertion. Keep in mind that coverage costs something like $6K per year and many people aspire to ensure that they carry coverage at all times. If you’re going to dismiss increased coverage as useless because it’s alleged that coverage doesn’t improve health care outcomes, then I think you have a serious burden to meet.

And let’s also be real here. Imagine in the alternative universe we heard news stories about millions of employers dropping coverage and many people opting to pay the mandate fees/tax rather than buy coverage from the exchange. In that alternative universe would those poopooing increased coverage as a good be telling us Obamacare was great because it finally got people to ditch useless coverage and freed up $6K per person per year? Or would they be riding decreased coverage as some type of Katrina disaster?

Marie July 25, 2014 at 9:36 pm

Boonton,

Medical insurance is asset protection. For those with substantial asset, it was very important to maintain coverage.

My questions were based on your argument. As I read it, you acknowledged that there might not be improved health outcomes right now from medical coverage, but believed logic dictated that folks who had access to essentially preventative care and early intervention would in the long run see improved health outcomes. Wasn’t that your story’s point?

But this would depend upon people using their coverage the way you indicate they would — for preventative care and early intervention. Do you have any reason to believe folks are using the new coverage in that way? Because I have used my new coverage less than I used my old coverage, for those purposes. My family has also used the new coverage less than it used the old coverage, for those purposes. It’s not automatic that people will use the plans the way you believe they will use them.

Your argument also relies upon the supposition that preventative care and early intervention will improve long term health outcomes rather than diminish them. I believe studies are still assessing whether that is true or not, for a population. I know that seems to go against common sense, but there have been many cases in which early ongoing intervention actually wound up causing more problems than it addressed. There’s a school of thought that these programs are an overall loss.

You’re asking us to believe ACA will pan out in the long run, even though evidence indicates it is not panning out in the short run. You can’t ask us to believe that based on a “it’s just common sense” argument. If you can’t give us solid reasons to believe your long term hopes are valid, then we’ll all just have to see how it works out.

TallDave July 28, 2014 at 10:57 am

In 2009 we were told this was a huge crisis and people were dying left and right.

Now that it’s been passed, we’re told the effect takes decades to show up.

Vivian Darkbloom July 25, 2014 at 8:33 am

Who cares what Jonathan Gruber said? What possible relevance could that have?

Vivian Darkbloom July 25, 2014 at 8:34 am

To answer my own question, I guess the only relevance would be that Jonathan Gruber is a hypocrite if he now claims something else. But, again, why would anyone care?

Justin July 25, 2014 at 9:15 am

Gruber was one of the leading public policy intellectuals involved in the ACA and was/is highly respected the supporters of the ACA. Given that Gruber was on record about the lack of federal subsidies for states that don’t have exchanges, it’s pretty tough for supports of the ACA to argue that it was always understood that there would be federal subsidies.

Boonton July 25, 2014 at 9:23 am

Might be relevant if Gruber’s expertise was on interpreting the language of health care statutes. Instead he is a health care policy wonk which is not quite the same thing.

Dave Anthony July 26, 2014 at 1:40 pm

You don’t have to be a policy wonk to understand what is very clear English.

Vivian Darkbloom July 25, 2014 at 9:42 am

Gruber is not a member of Congress. His after-the-fact (and conflicting after-after-the-fact) comments should be irrelevant to the legal debate. I now see Gruber says exactly the opposite of what he clearly stated in that video. It’s relevant to show he’s a hypocrite and a hack and perhaps it also shows something about the lying, cynical politics involved, but again, irrelevant to the legal issue. He now claims the whole thing was a typo (as if they spelled “state exchange” wrong, or something). Why the media (e.g. MSNBC) give people like that such a prominent platform to speak from on serious legal issues such as this one is beyond me. I hope that as a result of this, the media banish him from existence. His credibility strikes me as less than zero.

Boonton July 25, 2014 at 9:48 am

Or perhaps Gruber, not being an expert in law, simply was operating off his best ‘common sense’ reading of the language at the time but now accepts the view of many legal experts that it was functionally equal to a ‘typo’, which is not exactly uncommon in passed laws (but, granted, bad form for those keeping track).

Liar, hypocrite? I’m not sure you have actually thought about what those words mean and how they would connect to the debate.

Vivian Darkbloom July 25, 2014 at 10:02 am

Right, Boonton. So, we don’t we just agree this guy is not worth listening to. Do you always get your legal opinions based on what a “health care expert” understands before or after consulting with “legal experts”? Why should he be our filter on things legal? So we can appreciate the hearsay? Or because he’ll add appropriate political spin to the message?

Boonton July 25, 2014 at 10:34 am

Do you always get your legal opinions based on what a “health care expert” understands before or after consulting with “legal experts”?

If I needed a legal opinion I’d get one from a lawyer. But that would cost me a lot so no when it comes to simple talk I’m perfectly fine with non-lawyers chiming in with the knowledge that there’s always a risk they can be wrong.

With a health policy wonk you need two things, the guy has to understand how the law works and then he has to articulate what pros and cons the policy will have. Granted that’s much more speculative and subjective when it comes to the world of ‘expert opinion’.

So we can appreciate the hearsay?

I don’t think you know what that word means.

Michael July 25, 2014 at 10:41 am

You do realize that Gruber was paid by the administration to help draft the law, right? RTFA.

Boonton July 25, 2014 at 10:58 am

The administration didn’t draft the law, Congress did. By draft I assume you mean the actual writing of the legislation?

Michael July 25, 2014 at 12:32 pm

Maybe you should actually read the article before you start commenting on it.

Boonton July 25, 2014 at 1:38 pm

Why? You don’t seem to read the comments you comment on?

DF July 25, 2014 at 11:53 am

The relevance of what Gruber said is this:

One part of the anti-Halbig argument is that not only did Congress not enact what Halbig says, but that it is “absurd” to think that they ever would have enacted something like that. (“Absurd” is something of a technical term of statutory construction here – you try to avoid reading a statute in a way that would produce “absurd” results.)

The fact that Gruber (a proponent of the law, an expert on the subject, who worked both with the administration and Congress at the time the law was being drafted) would say that that is what the law says in a context that makes it clear he thinks it is perfectly reasonable that Congress would act that way is strong evidence that it is not “absurd” at all.

Gruber now says he has no idea why he said what he did in the video.

Boonton July 25, 2014 at 1:52 pm

I do agree with your point DF, although I would note with a long and complicated text it’s possible even for a very intelligent and honest person to read part of it as prep for one discussion (is it a good idea for states to do their own exchanges or not) while ignoring another part. As a whole, though, a court has to read the entire law together and if two parts seem to say two different things the courts have to veer towards the ‘less absurd’ reading unless there’s very good evidence Congress really intended the ‘more absurd’ sounding idea. Gruber’s video then would have been much more powerful if it had been made *before* the law passed in the context of something like “we have to have as few states as possible use Healthcare.gov as the exchange platform…it’s really vital that each state have their own exchange…hence we gotta put a lot of powerful carrots and sticks to make that happen!”

Of course not only does that not exist it makes no sense when applied to how the law is designed to work. While clearly the laws designers wanted very badly for states to expand medicaid (to help those who couldn’t affoard buying insurance even with subsidies). There’s nothing magical in theory or practice about the exchange website being run out of servers from a state capital or from healthcare.gov and the theory that lawmakers wanted to place a ‘landmine’ to attack those who didn’t like the law doesn’t make much sense. The only people punished by denying subsidies are those who buy policies from the exchange. The subisides never went to the states themselves so denying subsidies would not end up ‘punishing’ any state that didn’t cooporate with the law. You could argue that about Medicaid but not the subsidies.

charlie July 25, 2014 at 9:19 am

I’m not sure that a typo is covered by the first part of a Chevron test.

And to the extent you believe that the bill was rushed, that isn’t intent under the second part of the test. It does seem a bit of a legal fiction that a “state” exchange is run by the feds.

The ruling is the worst thing for republicans. As they fear, removing entitlements is painful and hard even after a year. And it might force the adminstration to fix to worst part of Obamacare which is the overly expensive plans.

mulp July 25, 2014 at 2:01 pm

The Republicans are campaigning against Obamacare because cost containment has restricted the networks on the policies in the exchanges and the policies to cover all providers do not get subsidies and are much more expensive because of the broader network of more expensive providers and the lack of subsidies.

No one is calling for repeal and returning to denial of insurance to the sick or old because the working poor need to be punished by death, or whatever the rational is for denying treatment for heart disease or diabetes until the ambulance is called. It is not like treating heart disease or diabetes cause heart disease and diabetes to suddenly spread widely through the US population.

B.B. July 25, 2014 at 9:27 am

There is something obnoxious about taking away our money and using it to bribe us into complying with the wishes of the government.

In Massachusetts, where I live, Mitt Romney and a Democrat legislature came up with a plan that worked reasonably well and was relatively uncontroversial. Supposedly, the ACA was modelled on RomneyCare. Ironic, then, that the ACA is making a mess in Massachusetts.

If the ACA is so wonderful, there is no reason that each state could not have created and funded its own version of the ACA. No one needed the federal government to get involved at all. No one needed elites from Ivy League schools to tell them what to do with their money.

It is narrow minded for Gruber to say that states that refused to play the ACA game are hurting the poor. What is hurting the poor is authoritarians who think they can’t dictate other people’s lives. The federal government has the option of just giving the states some cash and let them experiment.

Gruber and his friends are like muggers who say “your money or your life,” and then blame the victims for getting shot. Gosh, we gave them a choice, why did they choose unwisely and get hurt? The states that refused the ACA are not unreasonable; the politicians that blackmailed the states are unreasonable.

Boonton July 25, 2014 at 9:35 am

I’m not understanding what your problem is. If a state doesn’t want an exchange the Fed does one for them. If a person in the state signs up on the Fed exchange, the Fed gives them a subsidy if they qualify. What exactly is the problem?

Yes yes, I know you’d rather have some other type of system like the Fed giving states ‘money to experiment’, whatever that means (how does that address your objections? Why should I have my money taken away to fund Texas doing ‘experiments’?). But who exactly is the state to tell the person in the state that they can’t get a subsidy from the Federal gov’t? Texas is free to say as a state they will not play along with Obamacare but I’m unclear how your liberty loving rant addresses the fact that some citizens of Texas don’t buy the Republican party line and choose to buy plans from the Federal Exchange. Why is Texas as a state entitled to tell the Fed. gov’t it maynot give them subsidies? New Jersey as a state doesn’t get to nix oil subsidies the Feds might give Texas companies.

Oakchair July 25, 2014 at 11:23 am

Half of the funding for the ACA came via ending corporate subsidies in Medicare and improving Medicare efficiency. Since Medicare is a federal program it is impossible for the states to have used saving from it to fund their own versions of the ACA.
So in your mind states that refuse to expand Medicaid which is paid for are not hurting the poor? How is denying health access to millions of poor people not hurting those people?

Boonton July 25, 2014 at 11:46 am

Is that even trying to answer the question I posed? The Fed gov’t offers a subsidy to someone in Texas who uses the Fed. website to get insurance. Who is the state gov’t of Texas to say that person must ‘opt out’ of the subsidy? Because you say the Fed gov’t paid for that subsidy by cutting Medicare/Medicaid? So what? If the Fed. gov’t ends a subsidy for cranbury farmers and increases one for cattle ranchers can the state of NJ ‘order’ the subsidy ended on grounds that it has ‘paid for it’ since it has few ranchers but lots of cranbury farmers?

Dave Anthony July 26, 2014 at 1:46 pm

LOL @ improving Medicare efficiency. Says someone who apparently knows no-one who works in a hospital. A lot of the savings come from screwing the hospitals from getting reimbursed for care from seniors who come back in with the same health issues even though in many of these cases the hospital has no way of actually curing them. So a patient comes in with complications resulting from COPD every other week, the hospital gets dinged on their reimbursement and the patient refuses to go on hospice which is what they really need. Or patient has cardiovascular issues or diabetes and refuses to actually do the things doctors suggest (eat healthier, exercise more), the hospital gets screwed — they would actually be better off if the patients just died rather than keep coming back.

Ostap July 25, 2014 at 10:27 am

Does anyone who is neither insane nor a moron really believe that the sponsors of the bill, the people who wrote the bill, or the people who voted for the bill intended that only people who used state exchanges would receive subsidies? Sure, if you’re a lawyer opposed to the bill, go right ahead and argue that the obvious error, which is contradicted by other parts of the bill, is not an error. Nothing to lose, and maybe you’ll get some judges to agree with you. Otherwise, though, it is an utterly ludicrous position.

Widmerpool July 25, 2014 at 10:51 am

You’ll have to do better than that Ostap. The bill’s ardent supporters have searched high and low for contemporaneous evidence that anyone who is in this group believed that subsidies would also be available for the federal exchanges. They have found none. Gruber, who is certainly a member of the group, apparently believed otherwise. That’s the current state of things.

Boonton July 25, 2014 at 10:56 am

Actually the bill doesn’t really make sense if subsidies are only available for state run exchanges while at the same time asserting the Fed Gov’t would run an exchange for any state that didn’t opt or didn’t want to set up its own exchange.

The idea of ‘legislative intent’ isn’t to try to data mine everything anyone said about the bill when it was debated to discover it’s meaning (for most of the US’s history the bulk of debate wasn’t even written down and in the pre-Google era such mass searches were very difficult). It’s to assume the bill makes sense and to read it in a way that would make sense to someone reading the bill in the time it was passed. Not an easy task given that most stuff produced by committee leaves a lot to be desired and legal language is notorious for flouting common-sense reading to begin with but it isn’t impossible.

Widmerpool July 25, 2014 at 11:19 am

The idea of legislative intent is not as expansive as you think. To quote Scalia:

“The power of executing the laws necessarily includes both authority and responsibility to resolve some questions left open by Congress that arise during the law’s administration. But it does not include a power to revise clear statutory terms that turn out not to work in practice.”

In this case there are perfectly plausible reasons (as laid out by the Halbig plaintiffs) as to why this approach (subsidy for state exchanges, not for federal) would make sense (i.e., a carrot for the states to set up exchanges).

Boonton July 25, 2014 at 11:42 am

Except the statute is not clear so just because you can imagine that maybe Congress wanted to have a carrots and sticks approach to states setting up their own exchanges (and nothing in either the law nor the logic behind the law implies that states setting up websites was very, very important) doesn’t mean that the law should be read that way.

Ostap July 25, 2014 at 11:46 am

As a “carrot” to people who were rabidly opposed to the very idea of the bill, who everyone knew had no intention whatsoever of cooperating in the slightest in helping the law succeed, the drafters of the bill placed a landmine in the heart of the bill. Sure, that makes lots of sense.

Boonton July 25, 2014 at 1:30 pm

I think you’re confusing “was there a plusible reason why people might want an ACA that gave no subsidies to states that didn’t set up exchanges” with “was it plausible that the ACA that passed had the intention of excluding states that didn’t set up exchanges from getting subsidies”….remember to watch the language here, it isn’t the state that gets the subsidy but the person who signs up. The state of Texas gets no subsidy when people use Healthcare.gov, it’s the individuals who sign up so the only ones ‘punished’ by excluding them from subsidies are those who are cooperating with the bill.

Michael July 25, 2014 at 2:51 pm

If you read the original article, or watch the relevant video, then you will have a key Obamacare architect explain why it makes sense.

Ostap July 25, 2014 at 11:17 am

Right. The bill was designed to ensure health care for all. Everyone realizes that poor people cannot afford health insurance. Democrats realized that middle class people would rebel if they were forced to pay the true cost of their insurance. And so they designed a bill in which massive subsidies would flow to poor and middle class people who bought their own insurance. The bill makes no sense – none, zero – without the subsidies.

Do you really believe that the Democrats designed a bill in a way that would allow states run by opponents of the bill to destroy it?

Widmerpool July 25, 2014 at 11:28 am

I think this complex bill was hastily and poorly drafted – a recipe for numerous landmines along the way. Opponents said so at the time. There is a limit to what courts can do to fix poorly-drafted legislation. Happens all the time.

Ostap July 25, 2014 at 11:35 am

“I think this complex bill was hastily and poorly drafted”

No disagreement from me there, but if anything that works in favor of the argument that the people who wrote and voted for the bill had no intention of planting a fatal landmine in the heart of the bill.

Widmerpool July 25, 2014 at 11:47 am

No disagreement from me that proponents do not want this to happen. The problem, as I mentioned above, is that there is only so far a court is willing and able to go in fixing things. At some point, the proponents of the law are stuck with the law as drafted. We’ll see if that’s the case here. I would also note, as mentioned above, that there is a plausible reason why the law would have been drafted in this manner.

mpowell July 25, 2014 at 1:25 pm

Stop with the bait-and-switch. Either we are stuck with strict textual interpretations of a bill or we are not. Very few people are seriously advocating the former. If it’s the latter, arguments like, “well the bill was hastily written, what a bad thing to do”, are not actually good arguments that the bill did not intend the IRS interpretation. Another problem is to assume that the courts have to fix this kind of problem. No, they don’t. The executive does. There’s a long history of it. That’s what the IRS did. Now the court is trying to wreck things because they don’t like the bill.

Thomas July 25, 2014 at 4:56 pm

Yes, Mr. Powell? And so a law becomes a political mandate for the executive to determine it’s legislative intent and also determine how to implement it, regardless of what is actually written in to law by the political process? Why am I not surprised?

Dave Anthony July 26, 2014 at 1:51 pm

Yes, I believe that the Democrats’ lobbyists who wrote the bill were probably incompetent (and looking out for their own interests more than the public at large) and then the way the bill was quickly shoved through with reconciliation measures was probably flawed. I suppose they probably should have thought about that before they passed it.

It takes an incredibly naive person to believe that this bill was somehow a magical cure-all for americas health care problems and that there wouldn’t be massive problems caused with 14,000 pages of resulting rules and regulations from a 1,000+ page bill.

If they want to fix it, they’d better start compromising with the majority party in the house rather than petulantly whining about how activist judges are screwing America by interpreting the sh*tty bill they passed using the words actually written in the bill.

Michael July 25, 2014 at 2:52 pm

The number of left leaning Democrats who have been arguing in bad faith on this bill is astonishing.

Yancey Ward July 26, 2014 at 1:43 am

You could literally play a video of Harry Reid or Nancy Pelosi saying that the subsidies were intended only for the state-established exchanges, and it wouldn’t be accepted as evidence from any of these commenters. Now, I don’t expect much of the commenters above, but to have someone of Gruber’s stature claim he doesn’t remember saying these things or why he said them is pretty astonishing to even someone as cynical as I am. To publicly lie like that should be embarrassing to a normal human being.

Yancey Ward July 26, 2014 at 1:45 am

Well, the people who wrote the bill and voted for it intended to deny Medicaid to the citizens of states that didn’t agree to the Medicaid expansion, and that provision didn’t just apply the new enrollees- it applied to all the old ones as well. You need to find a new argument.

libert July 25, 2014 at 3:06 pm

Question: when policy analysts such as Gruber (& CBO for that matter) were modeling the impact of the legislation, they had to estimate the size of the subsidies. When they did so, did they assume that the subsidies would be available in all states or only ones with state-run exchanges? That seems like a more telling question.

Boonton July 25, 2014 at 3:51 pm

Good question, I wonder though if what they came up with was just a model itself where you input the amount of subsidy and it predicts how many would sign up.

Yancey Ward July 26, 2014 at 12:53 am

When the modeling was done, there was literally no way to estimate who would set up and exchange and who wouldn’t. The safest bet, and the one pretty much all Democrats in Congress operated on, is that no state would turn down the money.

Boonton July 26, 2014 at 2:33 pm

That might make sense if you were the CBO trying to score the bill but a health care model would probably not try to simulate the bill as much as provide the equations needed to simulate variations on the bill (i.e. how many would sign up if insurers increased premiums by 20%, lowered by 20%, if subsidies were X or Y etc).

Bill July 25, 2014 at 5:19 pm

So, who is this Senator Gruber anyway.

I looked and I looked for his statement in Floor debate.

Can this be that a Libertarian website that relies upon a close reading of legislative history is citing someone who wasn’t a legislator or participated in floor debate as the “quote of the day” for legislative intent.

Naw, you would have expected those close readers of legislative intent to have pointed this deficiency out because they are close readers of LEGISLATIVE history and intent.

The legislation is in several parts and exchanges are used differently in each to address different needs for different groups, and for different opportunities for states to opt in or out.

“Unlike the ACA’s Medicaid provisions, the exchange provisions have a federal fallback: Medicaid is use it or lose it; the exchanges are do it, or the feds step in and do it for you. In other words, this isn’t Medicaid; it’s the Clean Air Act (CAA). If a state decides not to create its own implementation plan under the CAA, its citizens do not lose the benefit of the federal program—the feds run it. The same goes for the ACA’s exchanges and so it would be nonsensical to deprive citizens in federal-exchange states of the subsidies. More importantly, if we are going to compare apples to oranges, the ACA’s Medicaid provisions have an explicit provision stating that if the state declines to participate, it loses the program funds (this was the provision at issue in NFIB v. Sebelius in 2012). The ACA’s subsidy provisions, in contrast, have no such provision, strong evidence that the subsidies were was not intended to be forfeited if the states did not participate. If the challengers are going to insist on strict textual arguments, this is exclusio unius 101: the rule of interpretation that provides that where Congress includes a specific provision in one part of the statute but does not include an analogous provision elsewhere, that omission is assumed intentional.”

I like the inclusion unis et exclusio alteriius argument the best.

Ipso facto.

Amen

Yancey Ward July 26, 2014 at 1:20 am

Congress had to write an explicit provision for removing Medicaid funds because the states were already receiving other Medicaid funds under the Medicaid Act- the ACA had to explicitly modify that pre-existing law in order to enact the exclusion. No such explicit provision is required for the exchange subsidies because the states had no pre-existing program utilizing them. Defining which type of exchanges qualify for subsidies is sufficient in that case.

Zach July 25, 2014 at 8:09 pm

There is a very important subtext to the entire Halbig case, and in fact to the entire dispute over extralegal modifications to Obamacare:

Administrative changes to a law disenfranchise Congress.

Obama can change the text of the law to read “established by the States or the Federal Government” any time he wants to. Which is to say, any time he is willing to bargain with Congress to achieve mutually acceptable modifications. Which is to say, never.

Changing laws without involving Congress takes away an important source of leverage on the executive branch.

Yancey Ward July 26, 2014 at 1:00 am

The people who express disbelief that Congressional Democrats would ever consider denying some people the subsidies based on whether or not a state actually set up an exchange seem to be either ignorant or dishonest. Congressional Democrats also in the ACA literally intended to deny preexisting Medicaid enrollees coverage because their states declined the Medicaid expansion. The states that declined the expansion had sue and win in federal court just to keep the ACA from removing all their federal Medicaid funds.

Dave Anthony July 26, 2014 at 1:56 pm

Congressional Democrats were also too stupid to imagine that a state could set up an exchange and that it would fail like it did in the case of Oregon. $300 Million gone, wasted. If it was JP Morgan losing that much money on a bad investment they would be dragging people to testify in front of Congress and imposing fines. But because it was a bunch of incompetent government employees, nothing else happened.

Boonton July 26, 2014 at 2:30 pm

Actually the Medicaid expansion provision is a problem for your case here. Whether or not Medicaid was expanded is a big deal since the ACA is designed to cover people either thru employment, exchanges or medicaid (and Medicare for those over 65).

But the exchange is more or less just a web site. Whether or not states set up their own or just use healthcare.gov really doesn’t matter one way or the other. 50 state exchanges or all 50 states on healthcare.gov wouldn’t really matter one way or the other.

Since getting states to go along with the ACA was important for Medicaid but NOT the exchanges, why would Congressional Democrats care to insert a draconian provision to punish states that didn’t opt to do their own exchange?

Yancey Ward July 26, 2014 at 1:37 am

Finally, Gruber’s comments matter because of two things- he was involved in the drafting of the law, and he is a recognized expert on the ACA- probably the most authoritative expert in the public realm. Had he been saying in early 2012 that it didn’t matter whether or not the states set up their own exchanges, you can be sure the Ezra Kleins of the world would be pointing to that as support for the argument that Congress never intended to deny the subsidies to citizens of non-compliant states. If he had just made a statement today that he originally thought the law excluded subsidies being available on the federal exchange, and that he had changed his mind, that wouldn’t be as damning as his attempt to claim he didn’t remember saying the things he said and that he had no idea why he said it. The latter is just flat out lying, and calls into question all the arguments that Congress didn’t intend exactly what the DC panel claimed in its decision.

In addition, we also have the IRS discussions that led up the rule in question. Until March 2011, the IRS was also interpreting the law exactly the way it was written.

I think this case is sure to end up at the Supreme Court, and I think it will come down to John Roberts. If he just goes by the plain language of the sections in question, the administration is going to lose the court case, though I expect them to ignore the decision, or find a work-around that requires yet another court challenge. Or Roberts may do what the 4th Circuit did and just throw up his hands and declare it ambiguous.

Boonton July 27, 2014 at 10:16 am

IMO this would have mattered more if he was saying this *before* the ACA passed. “We need a mechanism to force states to set up their own exchanges rather than relying on the Federal one so we need some strong carrots and sticks!” Of course in Mass. they didn’t let each town opt to set up an exchange or go with the state one. After the law passed he might have simply been reacting to what other people said the law said (and no he did not ‘write the law’).

Given poorly chosen wording legislative intent follows what it makes sense for the law to have and sorry the ‘carrot/stick via free money’ mechanism simply does not make any sense for exchanges. It does for Medicaid expansion since the laws design is to cover the very poor with Medicaid, the well off with either employer based or exchanged purchased coverage and the in between with subsidies to buy exchange insurance.

In reality the states were given the option to set up their own exchanges not because it’s vital to the law’s design but because Democrats wanted to counter accusations that they were ‘imposing’ a top down system on the states by allowing states as many options as possible to do things their way. Like many other examples in the health care debate (the public option, trigger, etc) no good deed goes unpunished.

Boonton July 27, 2014 at 11:46 am

DeLong provides additional quotes:

‘Yes, so these health insurance exchanges… will be these new shopping places and they’ll be the place that people go to get their subsidies for health insurance. 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 up its backstop in part because I think they want to sort of squeeze the states to do it”

That would clearly seem to indicate he was not thinking about how the law was written but how it was being implemented (that the Feds wouldn’t be able to get their exchange up in time). If that was the thinking then yes if a state didn’t do an exchange and the Feds were not yet able to provide one there would be no subsidies possible and that state would be leaving money for their residents sitting on the table….hence his advice to states at the time that it would be silly not to get an exchange going.

Comments on this entry are closed.

Previous post:

Next post: