Obamacare Was Built on a Lie

Obamacare architect and consultant Jonathan Gruber (who had two contracts with HHS totaling $392,600) says the Affordable Care Act was written in a way to deceive voters or it wouldn't have passed. Here is the text of his comments from the Annual Health Economics Conference hosted by the University of Pennsylvania on October 17th & 18th, 2013:

"It's just, you can't do it politically, you just literally cannot do it. Okay, transparent financing … this bill was written in a tortured way to make sure CBO did not score the mandate as taxes. If CBO scored the mandate as taxes, the bill dies … lack of transparency is a huge political advantage. And basically, you know, call it the stupidity of the American voter or whatever, but basically that was really, really critical to getting the thing to pass."

Dr. Gruber, speaking January 10, 2012 at the Jewish Community Center of San Francisco, stated that insurance subsidies are tied to state-based exchanges:

"… if your governor doesn't set up an exchange, you're losing hundreds of millions of dollars of tax credits to be delivered to your citizens."

Dr. Gruber spoke to the Noblis Technologies speaker series on January 18, 2012. He was unequivocal in saying that subsidies are only available to those people who live in states that set up state exchanges and are not available to people who live in states with the Federal exchange:

"… 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 that you're going to pay all of the taxes to help all of the other states in the country."

Dr. Gruber spoke to Chris Matthews on July 22, 2014 and claimed that the language that prevented the people in the federal exchange from getting subsidies was a "typo." The "typo" Dr. Gruber refers to is that part of the PPACA (Obamacare) that only authorizes subsidies for the purchase of insurance on an exchange "established by the State under Section 1311." This "typo" appears 9 times in the legislation.

In fact, the answer to Chris Matthews' question is: "Yes, it was a significant policy decision to offer subsidies only to people in state exchanges. The architects of the plan thought that by not offering subsidies to individuals in the federal exchange, it would force the states to set up their own exchanges."

Beyond Gruber: How HHS Flip-Flopped on Federal Exchange Subsidies

Research by Scot R. Vorse of the Competitive Enterprise Institute shows that the Obama administration did not believe that tax credits (subsidies) would be available to people in the federal exchange. A February 2014 congressional investigation found that the IRS initially began developing a rule to make tax credits available only on exchanges established by a state. HHS had a similar understanding of the law — for nearly two years, it developed its HealthCare.gov website without any effort to offer tax credits on the federal exchange.

The subsidies offered under the ACA trigger taxes against employers and individuals under the law's employer and individual mandates. If the subsidies the IRS is issuing in those 36 states are illegal, then the IRS is also illegally subjecting more than 57 million individuals and 250,000 employers to illegal taxes.

King v. Burwell

By next June, the Supreme Court will rule on the issue of Obamacare insurance exchange subsidies in King v. Burwell, a case that could have significant ramifications for the Affordable Care Act. Obamacare supporters have defended the IRS rule on the grounds that the precise statutory language is a mere drafting error and that everyone involved in developing and implementing the ACA understood that subsidies were intended to be available on federal as well as state exchanges. However, a growing body of contemporaneous evidence shows that even many Obama administration officials believed just the opposite.