Erstwhile Obamacare adviser Jonathan Gruber is going to play a key role in the Supreme Court battle over the law’s premium subsidies at HealthCare.gov.
The disgraced adviser to the Obama administration on Obamacare may be best known for calling the American voters “stupid” and bragging about preventing transparency in the passage of the health-care law, but Gruber’s notoriously candid style first got him into trouble when multiple recordings emerged of him explaining that premium subsidies were restricted to state-run exchange alone.
The Supreme Court will hear a pivotal case, King v. Burwell, on March 4, they announced Monday. A decision is expected to follow in June.
The case revolves around a phrase repeated throughout the text of the Affordable Care Act which doles out premium subsidies to health-care exchanges “established by the State.” The plaintiffs in this case, along with several others that haven’t made it to the Supreme Court, argue that the law restricts those subsidies to state exchanges — which would cut off the payments to the 37 states that currently use HealthCare.gov.
The Obama administration is arguing that Congress didn’t intend to cut off the subsidies and that an IRS rule that allows the agency to hand out the payments to all 50 states is legal. While the case was in lower courts, Gruber signed a brief in support of the Obama administration’s position, but several recordings that surfaced over the summer display Gruber making the opposite argument. The embattled economist called the multiple instances a mistake — just a “speak-o.”
But given his access to the Obama administration during the passage of Obamacare and his expertise on how the health-care law works, the plaintiffs are including Gruber’s initial understanding of the law in their case. Gruber’s name is mentioned six times during the 129-page opening brief which the plaintiffs filed Monday.
They’re not alone. The group coordinating the lawsuit, the Competitive Enterprise Institute, noted in October that while the Obama administration had cited Gruber in every brief during the King v. Burwell lawsuit before Gruber’s comments on subsidies became public, they scrubbed him from their final brief asking the Supreme Court not to hear the case.
But it’s not all about Gruber. CEI has also compiled evidence that the Department of Health and Human Services believed for months that only state-run exchanges were to received premium subsidies. (RELATED: Report: HHS Waffled On Federal Obamacare Subsidies)
“From the outset of this case we have argued that the Obamacare statue clearly limits subsidies to exchanges established by state,” Michael Carvin, lead counsel for the plaintiffs, said in a statement Monday. “[Our position] is further supported by factors ranging from the law’s legislative history and lower court rulings to Jonathan Gruber’s recently rediscovered statements.”
If Carvin prevails in March, Democratic Rep. Henry Waxman estimates that taxpayers will save $65 billion in subsidy payments through 2016. With a large majority of states operating on the federal exchange and few opting to take federal funding to create their own marketplaces, the future of Obamacare in those states may be bleak if the Supreme Court rules the subsidies illegal.
Setting up exchanges is an arduous task and even with years of preparation, several states who have already tried had to give up entirely — Massachusetts, Maryland, Oregon and Nevada all started over after the first open enrollment period. It would take years for states to establish their own exchanges and restore subsidy payments if the Supreme Court decides in favor of King.
The Obama administration also appears to be banking on winning the case. Even in the midst of this year’s open enrollment period, federal officials have refused point-blank to inform customers that the premium currently available at HealthCare.gov could skyrocket come June if the Supreme Court decides the subsidies are illegal. (RELATED: Tavenner Refuses To Warn Obamacare Customers About Risk To Subsidies)