Tags: Barack Obama | Exclusive Interviews | Healthcare Reform | Steve Malzberg Show | Scott Pruitt | Oklahoma | exchanges

Oklahoma AG: All 50 States Should Not Get Obamacare Subsidies

By Bill Hoffmann   |   Tuesday, 29 Jul 2014 06:21 PM

One of the architects of the Affordable Care Act has inadvertently thrown a monkey wrench into the healthcare law that may help states that didn't set up their own exchanges get tens of millions of dollars in tax credits, Oklahoma Attorney General Scott Pruitt tells Newsmax TV.

"The Justice Department has argued … Congress and, of course, the ACA intended that in all 50 states, irrespective of whether there was an exchange set up or not, that tax credits would be issued,'' Pruitt said Tuesday on Newsmax's "The Steve Malzberg Show.''

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"And here you have Jonathan Gruber — retained by the White House . . . [and] involved in the construction of the ACA at those very minute levels — saying unapologetically, unequivocally in 2012 that if the states didn't get on board, as he said, they would be penalized.

"Their citizens would not receive the tax credits, so it is exactly what we've been arguing, it is a confirmation of what we've argued from day one about the fact that Oklahoma along with 33 other states that have said no to an exchange, there are consequences.''

In January 2012, Gruber, an economics professor at the Massachusetts Institute of Technology, reportedly told a conference held by a non-profit science organization called Noblis:

"What's important to remember politically about this 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.

"So, you're essentially saying [to] your citizens you're going to pay all the taxes to help all the other states . . . 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. But, you know, once again the politics can get ugly around this.''

In a recent decision, however, a three-judge panel of the U.S. Circuit Court of Appeals for the District of Columbia ruled 2-1 in Halbig v. Burwell that the IRS could not extend subsidies to Americans who buy insurance through the federally run exchange, HealthCare.gov.

Later the same day, though, the 4th U.S. Court of Appeals in Richmond, Va., upheld the subsidies in their entirety in a similar case, King v. Burwell.

Pruitt told host Steve Malzberg that Gruber's statements could be used in court to force the government to cough up millions it has withheld from states that did not opt to set up their own exchanges.

"It's a hugely important matter, we actually filed a motion yesterday with the court in Muskogee, Oklahoma, in the eastern district of Oklahoma making them aware of the [Gruber audio] clip,'' Pruitt said.

"He says that the states would be penalized. He actually offers, as you saw proof of what our position is with respect to what's wrong.''

Just how far the court case will go, and whether it can be won, Pruitt isn't willing to predict.

"Yogi Berra one time said, predictions are pretty tough, particularly about the future,'' he said.

"What I would say to you is that the position that Oklahoma has taken from the very beginning, and we were the first state, we were the first one to go out and challenge the IRS rule.''

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