Obamacare: You’re probably familiar with Hans Gruber, the German terrorist-villain in the film Die Hard. Perhaps you’ve never heard of Jonathan Gruber. No relation, of course.
Unlike Hans, Jonathan has a high-pitched voice. He is also one of the nation’s foremost experts on health care policy and a key architect of the Obamacare law. Gruber suddenly became a celebrity again last week after some of his old comments on Obamacare resurfaced. We’ll see why in a moment.
The story begins with the D.C. Circuit Court’s long-anticipated Halbig decision, which was delivered last Tuesday. The issue before the court was whether the IRS could collect penalties from employers and issue subsidies for low-income purchasers of health insurance in states that failed to set up their own health insurance exchanges — that is, the 36 states that used HealthCare.gov instead.
The Halbig court read the statute and found it to be clear on its face. There was no ambiguity, and therefore no need to defer to the IRS’s contradictory interpretation or seek out evidence of the meaning elsewhere. On seven different occasions, the Obamacare law prescribes subsidies and penalties in relation to consumers “enrolled in through an Exchange established by the State under 1311,” with “state” defined as the 50 states and the District of Columbia. The bill referred specifically each time to “1311,” the section of the law on state-established exchanges. Not once do these sections refer back to the separate section (1321) on exchanges established by the federal government.
The same day, the Fourth Circuit Court of Appeals returned the opposite verdict in King. The judges there decided that the law was ambiguous on this question, and on those grounds deferred to the IRS interpretation. And precedent does dictate that this is the proper course where ambiguity exists — the question was whether that was the case here.
Both courts agreed that the law might have absurd results if only states with their own state-based exchanges could offer subsidies. But the Halbig court noted that this doesn’t matter — the law is the law and it’s not the role of the courts to clean up legislative messes or cure a case of legislative buyer’s remorse after a bad law is rammed through Congress. Provided that the law is constitutional, it takes an act of Congress to change it, no matter how absurd its results may seem. (The court also pointed out that the law is having other related and even more absurd results in the U.S. territories despite clear congressional intent.) Moreover, the court noted, there had been some discussion at the time the law passed of using the subsidies/tax credits for purchasing insurance as an incentive to encourage states to create their own exchanges.
“Nonsense!” the liberals cried when the decision came down. This law, they insisted, was never meant to be read this way. Completely ridiculous — radical conservatives are trying to explode Obamacare on a technicality.
But this is where Gruber comes in. He helped write and promote Obamacare, as he had done for RomneyCare previously. He was arguably the foremost expert on the law. Tape surfaced late last week of him discussing this precise question of state and federal exchanges on two separate occasions in 2012. In each case, he took the position of the plaintiffs in Halbig, that only state-based exchanges can give out insurance subsidies. Only later, after the Halbig suit was filed, would Gruber call this same position he had previously taken “nutty” and “stupid.”
When the first tape was released, he protested that he had made the verbal equivalent of a typo, even though the explanation he gives on the tape is quite extensive and clearly not a slip of the tongue. But then the second tape came out — this one, in which his comments on the matter were actually part of his prepared remarks and not off-the-cuff in answer to a questioner:
Now, the word of Jonathan Gruber (now or then) doesn’t determine what an act of Congress actually says. Nor should it. The Halbig court made clear that it didn’t rely on any of the legislative history to make its ruling — let alone the word of an outside consultant — because it found no ambiguity in the law itself that would justify going to other sources. But it also noted that nothing in the legislative history, nor in the rest of the law, contradicted its plain-language reading.
Gruber’s comments, however, take the argument even further. It matters little that he has said otherwise since, or even that at times he discussed the issue differently. These comments provide airtight evidence that the decision reached in Halbig does not stem from a kooky interpretation, or have results that the authors of Obamacare would have found absurd at the time they wrote and passed the law.
In short, Congress made a big mistake — one of many contained within the law — and chiefly because of the corrupted and hyper-partisan process by which it was passed.
Recall that after the special election of Sen. Scott Brown, R-Mass., in January 2010, Democrats were suddenly deprived of the flexibility they had expected to have in drafting the law’s provisions. They had expected a House-Senate conference committee in which they could iron out the kinks in the law and then pass it again through both the House and Senate. But suddenly, after Brown won, they realized they would never be able to pass any version of Obamacare through the Senate again. They no longer had the 60 votes they needed.
So the Democrats did the only thing they could: They took the version of the law they had already passed through the Senate on Christmas Eve 2009, and rammed it back through the House, warts and all. There was no second chance to consider this issue or any others in detail. In any event, most members had only a vague idea of what the bill did anyway. If they wanted a bill that didn’t do what Gruber would later describe in 2012, and what the Halbig plaintiffs insisted on in their case, then they were just plain out of luck, because the Senate law was written precisely as it was written.
Will Halbig be upheld? Probably not, but it is hard to say. The IRS may have an opportunity to bring it before the entire D.C. Circuit, which President Obama recently stacked with his appointees. It may or may not reach the Supreme Court, whose members may relish the opportunity to clarify the constitutional question of how much courts should defer to executive agencies when interpreting statutes.
Either way, the entire drama highlights the arrogance involved in passing a 2,000-plus-page law that overhauls the entire health care system by the seat of one’s pants, flying blind and without any input from the political opposition. If this court case actually does end up blowing up Obamacare, it will be a fitting end to this chapter of political history.