Gruber: "It Was Just a Mistake"

| Fri Jul. 25, 2014 10:17 AM EDT

Why did Jonathan Gruber tell an audience in 2012 that states which failed to set up Obamacare exchanges would be depriving their residents of federal subsidies? Jonathan Cohn caught up with Gruber this morning and got an answer:

I honestly don’t remember why I said that. I was speaking off-the-cuff. It was just a mistake.

....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. And that was the basis of all the modeling I did, and that was the basis of any sensible analysis of this law that’s been done by any expert, left and right.

I didn’t assume every state would set up its own exchanges but I assumed that subsidies would be available in every state. It was never contemplated by anybody who modeled or worked on this law that availability of subsides would be conditional of who ran the exchanges.

So there you have it: Gruber screwed up. More importantly, as he points out, he's performed immense amounts of technical modeling of Obamacare, and all of his models assumed that everyone would get subsidies even though not every state would set up its own exchange. As Cohn says, this was pretty much the unanimous belief of everyone involved:

As I’ve written before, I had literally hundreds of conversations with the people writing health care legislation in 2009 and 2010, including quite a few with Gruber. Like other journalists who were following the process closely, I never heard any of them suggest subsidies would not be available in states where officials decided not to operate their own marketplaces—a big deal that, surely, would have come up in conversation.

Kudos to Peter Suderman and his sleuths for uncovering this and getting everyone to talk about it for a day. It's a news cycle win for conservatives. But restricting subsidies to state exchanges just flatly wasn't part of Congress's intent. There's simply no way to rewrite history to make it seem like it was.