The Obama administration’s claim that Congress never intended for Obamacare subsidies to apply only to states that implemented their own Exchanges looks much, much weaker this morning. Reason’s Peter Suderman has passed along some video gold, in which the architect of the law says it was worded to place political pressure on states.
Jonathan Gruber, the MIT economist who worked on Romneycare in Massachusetts, helped the administration craft Obamacare and, in January 2012, stated pretty clearly that consumers in states that opted out of the law would be denied subsidies.
“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,” Gruber told an audience. “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,” he said, “and realize there are billions of dollars at stake here in setting up these exchanges.”