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July 25, 2014 12:32pm
By: Fred Lucas

Fight-over-ObamacareOne of the architects of Obamacare has changed his view on state exchanges and federal subsidies.

Federal courts in Washington, D.C., and Richmond, Virginia, this week issued opposing rulings on whether state residents can get tax credits from the federal government if their state did not set up its own health care exchange.

In an interview on MSNBC Tuesday, MIT economist Jonathan Gruber, who helped design the Affordable Care Act, dismissed the D.C. court’s position – one he advocated in a 2012 speech.

“It is unambiguous this is a typo. Literally every single person involved in the crafting of this law has said that it’s a typo, that they had no intention of excluding the federal states and why would they?” Gruber said.

“Look, the law says that people are only subject to the mandate if they can afford insurance, if it’s less than 8 percent of their income,” Gruber continued. “If you get rid of these subsidies, 99 percent of the people who would get subsidies can no longer afford insurance, so you destroy the mandate. Why would Congress set up the mandate and go through all that political battle to allow it to be destroyed? It’s just simply a typo, and it’s really criminal that this has even made it as far as it has.”

But on Jan. 18, 2012, Gruber spoke before the Noblis Innovation and Collaboration Center in Falls Church, Virginia, when an audience member asked: “It’s my understanding that if states don’t provide [exchanges], then the federal government will provide them for the states.”

Gruber responded that was not correct.

“What’s important to remember politically about [Obamacare] 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 said. “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 and realize there are billions of dollars at stake here in setting up these exchanges,” he said. “But, you know, once again the politics can get ugly around this.”

After the law was enacted, Gruber became a consultant for state governments such as Wisconsin, Minnesota and Colorado to set up their exchanges, according to Forbes.

The two contradictory videos were first brought to the public’s attention by Ryan Radio of the Competitive Enterprise Institute, a conservative think tank, and then highlighted by Peter Suderman of Reason, a libertarian magazine and website.

(H/T: Forbes, Hot Air)