The federal government never intended to be the primary provider of exchanges. The states were all supposed to have their own exchanges, but most have opted out of having their own. Instead choosing to let the federal exchange provide the coverages.
The law was written to only allow state run exchanges to get subsidies. This was done to essentially force the states to set their own exchanges, and apply political pressure on Republican governors to accept Obamacare. If they didn’t, constituents were supposed to be outraged that they were paying more for insurance than other Americans because they lost the subsidies.
“In the law, it says if the states don’t provide [exchanges], the federal backstop will,” Gruber said in a newly unearthed 2012 presentation. “The federal government has been sort of slow in putting out its backstop, I think partly because they want to sort of squeeze the states to do it. I think 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.”
Then Gruber tried to argue that his very well-stated, and deliberate, point was simply him misspeaking. Hard to believe, and not true, I know.
Good thing we uncovered more audio of him saying the same thing.
“That is really the ultimate threat — will people understand that gee, if your governor doesn’t set up an exchange, you’re losing hundreds of millions of dollars in tax credits to be delivered to your citizens,” Gruber says in the audio clip, resurfaced by Morgan Richmond and John Sexton. “So that’s the other threat, is will states do what they need to do to set it up.”