New Report “Beyond Gruber” Shows Government Officials Flip-Flopped on Obamacare Subsidies Story


WASHINGTON, Nov. 20 – Today, the Competitive Enterprise Institute (CEI) published a report by businessman and finance expert Scot Vorse highlighting a growing body of evidence indicating government officials originally planned to offer Obamacare tax credits only on state-established insurance exchanges. In the report, a timeline of actions by the Department of Health and Human Services (HHS), the IRS, and several state governments shows the administration’s narrative on the subsidies issue changed only after dozens of states refused to set up exchanges.

“Based on the paper trail of several government contracts and other documents, it is clear Jonathan Gruber was not the only person working on Obamacare who believed subsidies would only be provided to individuals purchasing insurance on state-based exchanges,” said Vorse. “What the administration is saying today directly contradicts what HHS, Treasury, and the IRS did for the first two years of Obamacare’s implementation. It was not until many states opted out that the administration’s story began to change.”

In the latest Obamacare case accepted by the U.S. Supreme Court, King v. Burwell, the government is defending the IRS rule extending insurance subsidies to all states. The government contends the statutory language is a drafting error and everyone involved in developing and implementing Obamacare understood that offering subsidies on both federal and state exchanges was necessary to make insurance more affordable. Vorse’s findings demonstrate that although HHS helped states develop a tax-credit calculator, the department initially set out to establish its federal exchange without a calculator and would not provide users any information about tax credits. 

Note: The Competitive Enterprise Institute is coordinating and funding both the King v. Burwell case and the D.C. Circuit Halbig v. Burwell case. 

>> View Scot Vorse’s report, Beyond Gruber: How HHS Flip-Flopped on Federal Exchange Subsidies