Did Scott Walker Just Deal an Obamacare Legal Challenge a Major Blow? An Architect of the Case Says No


Did a case challenging the administration's implementation of Obamacare just take a major hit?

That's how liberal pundits are framing a newly surfaced video of Wisconsin's Republican Governor Scott Walker saying in a Wall Street Journal video that "there's no real substantive difference between a federal exchange, or a state exchange, or the in between, the hybrid, the partnership."

The video is making the rounds today, and many of those highlighting it are arguing that it undermines an upcoming Supreme Court challenge to the law's implementation. Challengers in King v. Burwell, which the High Court is set to hear in March, argue that the text of the law does not allow subsidies to flow through the federal exchanges, pointing to language in the law that says that subsidies are only available in an "Exchange established by a State." The Internal Revenue Service, which manages the subsidies, wrote a rule allowing the subsidies in federal exchanges as well. 

The argument being made about Walker's quote, then, goes something like this: If Walker—an outspoken Republican critic of Obamacare—is right that there is no meaningful difference between the two types of exchanges then the administration's decision to allow subsidies in federal exchanges would be legally defensible.

Here's the full Walker quote:

When I looked — and I spent nearly two years looking at this . . . I visited [Washington DC], as a new governor in December in 2010. As part of that visit I met with Secretary Sebelius, the head of the federal department of HHS, and have spent the last two years with my team, my administration, my cabinet, working with the federal government trying to fully understand and comprehend what it meant to my state and other states. And it was clear! It's a SINO, "state in name only."

This really isn't an exchange that the states run or even run in a partnership. The federal government determines what's going to be covered. How it's going to be covered. And the only distinction is whether or not a state can say that they're running it, put up a sign that says they are running it. But, in the end, there's no real substantive difference between a federal exchange, or a state exchange, or the in between, the hybrid, the partnership. And so I said, if I can't run it, if I don't have control over it, why would I take the responsibility of explaining to people something that I don't have any control over. [emphasis added]

Ian Millhiser of Think Progress, who first posted the video, notes that Walker's conclusion was reached after a careful review of the evidence. "Walker lays out the breadth of his nearly two-year inquiry into the differences between federally-run and state-run exchanges," Millhiser writes. "He met with the most senior Obama Administration official entrusted with health policy, and he had an entire team of advisers working to determine whether there were practical differences between the two types of exchanges."

So is this a major blow to the challengers' case?

Michael Cannon, the Director of Health Policy at the Cato Institute and one of the architects of the legal challenge to the law's implementation, says the video doesn't undercut the challenge.

In an email, Cannon provided four reasons why Walker's quote won't damage the case. 

First, these comments could have been made by someone who agrees with the King plaintiffs' interpretation. Walker was talking about which option gave states more control. In that context, he said creating its own Exchange gave Wisconsin officials no more control.

Second, if Millhiser wants to argue that Walker shared(-es) the government's interpretation of the statute, all he needed to do was point to an (ill-advised) proposal Walker put forward years ago that was premised on the idea that he could move people off of [Wisconsin's state-created health program for low-income individuals] BadgerCare and into subsidized coverage through Wisconsin's federal Exchange.

Third, even that wouldn't necessarily tell us Walker shared the government's interpretation, because Walker could (plausibly) claim that he was (irresponsibly) hedging his bets.

Fourth, it is a little ironic and telling that Millhiser bolsters his claim of Walker sharing the government's interpretation of the statute by noting that Walker reached that conclusion after meeting "with the most senior Obama Administration official entrusted with health policy." Wait, you mean Kathleen Sebelius didn't tell him subsidies aren't available in federal Exchanges? I am shocked.

To that I would add that it's useful to note and recall the political context of Walker's remarks.

At the time, state governments were deciding whether or not to implement their own exchanges. There was a lot of pressure from Obamacare supporters and from the administration, who wanted states to run the exchanges themselves. One of the administration's main arguments was that if states ran their own exchanges, they would have more "flexibility" to configure the exchanges as they saw fit. In response, critics argued that the flexibility was mostly imaginary.

This is the debate that Walker was referencing in the WSJ.com video. When he says he concluded that there was no difference between a state exchange and a federal exchange, he's pretty clearly talking in terms of the flexibility and authority that state officials would have to manage and customize their own exchanges. 

Liberal backers of the administration's implementation of Obamacare are clearly hoping that this will be their version of the Jonathan Gruber recordings that surfaced last year.

In a video and an audio recording from 2012, Gruber, an MIT professor who worked with the administration and Congress on crafting the health law and has claimed to have written portions of it, stated explicitly that states that choose not to set up exchanges themselves would be cutting citizens off from subsidies. He said this at least twice, and he said it very clearly, elaborating on the consequences. There's really no way to explain it away; Gruber's own after-the-fact rationalization of his remarks doesn't make sense. Gruber's remarks were damaging enough that all reference to his work and name was removed from the government's briefs in King. 

Whatever you make of Walker's remarks, they're not really comparable to Gruber's. 

NEXT: Georgia Supreme Court Considers Whether Nude Dancing at Strip Clubs Is a Protected Right

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  1. So if Moonbeam says he likes O-care, does that mean it’s constitutional?
    WIH does Walker’s opinion have to do with anything related to this? Are the straws so sparse the lefties are grabbing at crap like this?

    1. Pretty soon they’ll be picking comments from HuffPo articles and Change.org petitions.

    2. Are the straws so sparse the lefties are grabbing at crap like this?


    3. Are any of the lefties arguments based on anything more than bad contextualization and straw grasping?

  2. Unless Walker intends to submit his own opinion as amicus curiae, I don’t see how his words have any relevance. This is a governor’s perspective on his own responsibilities to implement an obligation placed upon his state by the federal government. It is completely immaterial to the law itself, as Walker played no part in writing or passing the law.

    1. “It is completely immaterial to the law itself, as Walker played no part in writing or passing the law”

      But Gruber sure did play a part in it – despite liberal’s selective amnesia on his role.

      1. liberal’s selective amnesia

        They will argue until blue in the face that “shall not be infringed” can be interpreted in every possible way except “no restrictions can be placed upon it”, so it is little wonder that they think “established by the State” can mean whatever is most convenient to their cause.

        The only truly disturbing aspect is that the Courts seem to be on board with entertaining their collective delusions.

        1. It’s really a mistake to think that liberals arguments about the meaning of the constitution are in anything resembling good faith. Their goal is to figure out how it is legally possible to enact the policies they want. They consider the constitution a quaint aged document that really ought to be heavily revised if it weren’t for the the dumb right-wingers who won’t let that happen. So, in the meantime, the only thing to do is work around it by reinterpreting it to allow whatever they want to allow. They really, honestly, do not give a shit, AT ALL, about the literal meaning of the constitution, or even the principles it is based on. Arguing with them about the constitution is pointless since they don’t fucking believe in it.

          1. Although, to be fair, I don’t really care about the constitution, either. I care about the principles it is meant to protect. I just happen to be in the happy position of having a legal document that provides at least a last vestige of protection for those principles.

            The point is, that I recognize that I have different principles from them, and that neither of us really care about the words on the piece of paper. Arguing about those words is a game for children. The real argument is over which set of principles is right.

          2. “When I use a word,” Humpty Dumpty said, in rather a scornful tone, “it means just what I choose it to mean?neither more nor less.”
            “The question is,” said Alice, “whether you can make words mean so many different things.”
            “The question is,” said Humpty Dumpty, “which is to be master?that’s all.”

    2. Scott Walker also thought that hairdo was the right thing to do, so even if he was agreeing with the government’s interpretation of the ACA, he obviously lacks credibility.

  3. Is Walker on the Supreme Court?

    His opinion is no more meaningful than mine.

  4. The only thing that needs to be said is that economic and functional similarity is not the same thing as legal equivalency.

    The liberals are sucking wind on this one.

  5. Possibly stupid question: did the IRS write its rule allowing federal exchange money during the “two year investigation?” If so, wouldn’t his conclusion take into account what the IRS (and thus the federal government) said it was going to do?

  6. No possible legal relevance, they’re just hoping it provides political ammo and that some on the Court will take that into account.

    1. I’m pretty sure the only Justices who would take it into account already know how they will vote.

      1. I wouldn’t say Roberts or Kennedy taking that kind of thing unofficially is beyond imagination.

        1. The real trick is how they will reverse engineer a reasonable-sounding justification for the decision. It’s like parallel construction, but instead of trampling one defendant’s rights at a time, they’re going for broke on trampling everybody’s.

          1. That’s the easy part, they’ll just say that since the exchanges are functionally equivalent they’re legally so

            1. Roberts wouldn’t dare take such a definitive and briefly worded opinion on such a controversial matter. I agree with John that the Chief Justice is very image conscious. Regardless of which way he sides, if he writes the opinion it will be wordy and full of meaningless flourish.

              Is there any precedent for the Supreme Court invalidating distinctions of law out of convenience?

              1. John = the HnR poster, not the Chief Justice

  7. ha! Walker gave Ginsberg the ammo she needed to uphold Obamacare

  8. The Obamacare Challenge… a major blow.

    Don’t know if it will be as successful as the Ice Bucket Challenge, though Shrike and Tony have good head starts.

  9. They’re trying to cancel out the impact of the Gruber revelations – they want Scott Walker to be their Gruber – “look, even the evil moustache-twirling worker-repressing Scott Walker agrees with us!”

    Of course, Walker didn’t, like Gruber, play a key role in developing Obamacare and boast of how they used deception to get the rubes to support it.

    They’re trying to create moral equivalence for low-info voters.

    1. Is Gruber involved in the issue in Burwell? Were some of his comments about the subsidies and exchanges?

      1. I’m discussing the *political* debate and how the progs are trying to recover from the hits they got from Gruber.

        Of course, the Supreme Court is above such things and pays no attention to icky politics. The Lord forbid that cynics should suggest such unworthy motives on their part!

      2. Ok, I see he did. That guy is the proverbial gift that keeps on giving!


      3. Where have you been?

    2. It doesn’t dawn on them that “the evil moustache-twirling worker-repressing Scott Walker” supports Obamacare to repress the workers?

  10. I believe Gruber explicitly articulated the intent of the distinction between state and federal exchanges as an outright attempt to intimidate the states by threatening to withhold subsidies. When it became obvious the whole thing falls apart without the subsidies, the feds went into, “That’s what we meant all along!” mode.

  11. First, Walker is saying that in practice the Fed’s run the State exchanges, it is only the label on the exchange that is different. I don’t think that is true because the States are the still the ones that build some of the infrastructure, but whatever. The point is that the law premises subsidies on what the label says, end of story.

    Second, let’s grant that the label isn’t important, but that it’s the practical control of the exchange that should influence subsidies. Walker is saying NO State exchange is truly a State exchange. So if anything, his argument could be used to support invalidating ALL subsidies. Which is absurd, of course, but about as absurd as the arguments supporters of Obamacare are making.

    1. Yes, he’s basically saying the states don’t really have any leeway to regulate plans on the exchange differently than the federal one, so why bother?

  12. Aw, come on! Who cares what the legislation actually says? It’s what they meant that matters! Intentions!

  13. You are allowed to be opposed to Obamacare and also believe that SCOTUS taking King v. Burwell is politically motivated and absurd.

    1. I can believe that you are a moron and also believe that you are a hack. Truly, it is a conundrum.

    2. Of course it’s politically motivated. Both sides are politically motivated. We have different principles, and we want our principles to prevail. But it’s hardly absurd to play the game of legal chess in which the rules are that the executive branch must enforce the law as it is actually written and not as they wish it was written. If your side fucks up and writes a law in a stupid way, we’re supposed to be all “oh well, it would be so UNFAIR for us to take advantage of your stupidity, so I guess we’ll just let you WIN!”

  14. Ummm. It doesn’t really matter if their isn’t a “substantive difference” between a federal and state exchange. The law makes the distinction between the two. I understand that the distinction is in name only. But, the law, for whatever reason, made the two distinct. And, I would argue that’s more proof the subsidies where excluded from the Fed on purpose. As everyone is pointing out, there really is no “substantive difference” between the two. So, why did the authors create an artificial distinction between the two?

  15. Ian Millhiser, like Matt Breunig, is intellectually dishonest. His feelings tell him what positions he should take, everything else be damned.

  16. The funny thing about King v Burwell is that the plaintiffs are not “challenging” the ACA. They are suing to force the IRS to enforce the law as written.

  17. And in another sign that Obamacare continues to work, the uninsured rate dramatically dropped last month, according to the one pollster the GOP continues to draw on, Gallup, in an article entitled “Uninsured Rate SINKS.”


    “The Affordable Care Act HAS ACCOMPLISHED one of its goals: increasing the percentage of Americans who have health insurance coverage. The uninsured rate as measured by Gallup has dropped 4.2 points since the requirement to have health insurance or pay a fine went into effect. IT WILL LIKELY DROP FURTHER as plans purchased during the current open enrollment period take effect.”

    I tell you this Peter because you told us all it would do no such thing. Pointing out just one of your erroneous predictions about Obamacare.

    Good luck to the GOP on just scuttling it.

    1. Peter said that a law that would force people to obtain health insurance plans would not cause them to obtain health insurance plans?

      Where did he say such a thing?

      1. Here you, go back in Feb. of 2014, Peter on a survey telling you all you needed to know about the uninsured and Obamacare, in an article entitled “The Uninsured like Obamcare LESS and LESS:

        “One of the most interesting public opinion phenomenons of the last several months has been the rapid shift against the president’s health care law amongst the people it was supposed to help the most?the uninsured. Unfavorable views of Obamacare continued to rise amongst those who lack insurance this month…”


        Oops! They like it more and more!

        1. D00d, can you not read?

          Gallup says “[t]he uninsured rate among U.S. adults for the fourth quarter of 2014 averaged 12.9%” while Peter says “[t]he Kaiser poll now finds that amongst the non-elderly uninsured, 54 percent say they do not approve of the health law while only 22 percent say they favor it, a split of 34 points”.

          The “uninsured rate” and “uninsured opinion of ACA” are not the same thing. It’s like the Presidential popular vote and the President approval rate ? you can certainly vote for Obama but not approve of the job he’s doing.

          Until you get the idea through your head that complying with a law and supporting it aren’t the same thing, you’re an idiot on the par of George W. Bush. You know, “Either you are with us, or you are with the terrorists.”

          1. C’mon, puddin’. Give us all just a bit of credit.

            Peter has made every attempt since day 1 to paint the worst picture possible of Obamacare…pointing out only polls that show disfavor, ignoring data that shows its working…if ever there was a shallow attempt at presenting what his view is through selective use of data, he has done it.

            He said the uninsured were lost. Gone. Kaput. Over. And he couldn’t have been more wrong.

            Tell you what…do note that he selected once again to ignore this current Gallup poll. If the numbers were reversed, he would have been all over it.

      2. Hey…here is one even better:

        “Obamacare HAS LOST the Uninsured.”


        By none other than Peter himself.

        1. Both of those pieces say people don’t like the law, not that they won’t buy insurance when forced to do so.

          I don’t like paying taxes, but I pay them because I really don’t like going to jail.

          1. Read the 2nd one again…his conclusion? Obamacare has lost the uninsured. Lost. What don’t you get about that word?

            Gallup just told you it gained the uninsured, in a dramatic way, and that the next few months it will be even more.

            Peter could not have been more wrong. But good try at a defense.

            1. So you are a fucking moron. Good to know.

              Suderman’s conclusion, in his own words (emphasis mine):

              It’s a bad system that’s worse than the old bad system. And at least for now, even the uninsured, the people who supposedly stand to gain the most from the law, think so too.

              1. Funny, I guess you thought he said, “Obamacare may lose the uninsured.” Or even, “Obamcare is losing the uninsured.”

                No, he said they were LOST. Brush up on your English skills, kbo. Peter is a journalist. He is supposed to use language with a sense of precision. You might get a pass for you lack of understanding, he doesn’t.

                1. So you’re going to double down on your argument that your reading of the title overrides the author’s own words in the body of the piece. Which is a blog post, and not part of the magazine, by the way.

                  1. That’s the title, and this is Peter’s first sentence in the article:

                    “Obamacare has lost the uninsured.”

                    Keep trying.

                    1. Jackand Ace|1.7.15 @ 5:01PM|#
                      “Keep trying.”

                      WIH would anyone try to get a fucking lefty ignoramus to understand English?

          2. As if you needed more, I’ll go you one further. In that same article, Peter says this:

            “That’s more than a political problem. It’s a policy problem?a threat to the law’s viability, especially when combined with other recent poll numbers showing that YOUNG PEOPLE, who are crucial to the law’s coverage scheme, are rejecting the law as well.”

            Oh really? Just another of his predictions. And what does Gallup say about the young?

            “Across age groups, the uninsured rate dropped the most among 18- to 25-year-olds, falling 6.1 points from a year ago.”

            Oops again.

            1. Fascinating. You not only want to proudly proclaim your inability to read, but you want to profusely insist upon it.

              1. Haha! That’s it, eh?

                1. Did you murder all the intelligent lefties? Was there an intellectual honesty convention for aspiring liberal thinkers that you firebombed?

                  1. Well, you’ve tried.

                    1. Where did you bury all the bodies?

                    2. Enjoy your evening, kbo! I enjoyed it.

                    3. Obstruction of justice!

                    4. Jackand Ace|1.7.15 @ 5:08PM|#
                      “Enjoy your evening, kbo! I enjoyed it.”

                      Passive-agressive behavior! What a surprise from a fucking lefty ignoramus!
                      Enjoy trying to read English, asshole!

    2. “And in another sign that Obamacare continues to work…..”

      Millions of people were forced out of health insurance plans that they wanted to keep and that were cheaper than the new ones they were forced into.

      So yes, Obamacare continues to work doing what it was intended to do – perpetrate a massive redistribtuion of wealth scheme by forcibly raising costs for a huge number of people in order to give others a handout.

    3. The uninsured rate as measured by Gallup has dropped 4.2 points since the requirement to have health insurance or pay a fine went into effect.

      Whatever you think of the program, this is funny.

  18. Well, that’s just, like, his opinion and stuff…

  19. It’s not relevant because Walker is not someone who helped write the bill.
    Gruber is.

  20. Obviously the ranting of a non-college graduate.

  21. If the courts in King v. Burwell, ultimately rule that those in the 36 states cannot receive federal subsidies it will be the greatest possible gift to Obama and the Democrats. Obama would give the Republicans in Congress one chance to pass a clean bill allowing subsidies in those states. If they do not the situation would be that taxpayers in Texas and all the red states that did not set up the state exchanges would have to pay taxes that went to subsidize those in the 16 states like NY and California that set up the exchanges. A typical single young person in NY making $20,000 would be paying $40 per month, after subsidies while the same person in Texas would pay $300 per month.

    “..Focusing attention on the insurance companies, which are simply intermediaries between the doctors and the patients, was a tragic error. It would like trying to solve a problem of high energy prices by focusing on gasoline stations. Only if the government sets prices can health care prices be controlled. Controlling prices does not automatically result in longer waiting times. Japan and Switzerland generally have shorter waiting times to see doctors than does the USA. Additionally, if prices were controlled there would be no such thing as “in-network” or “out-of-network” since all doctors would accept all insurance plans?”

    1. Additionally, if prices were controlled there would be no such thing as “in-network” or “out-of-network” since all doctors would accept all insurance plans

      Lol. In magic fantasy land, doctors don’t care how much they get paid and accept whatever the insurance company offers them.

    2. What’s hilarious about that quote is assuming that Japan and Switzerland, with populations orders of magnitude smaller than ours, can be compared to the US.

  22. C’mon guys. It doe not require a terribly advanced legal mind to recognize the OBVIOUSLY overpowering supervisory duty of SCOTUS to prevent the ruling from giving the citizens of disobedient states refusing to follow the law a cause of Action against the United States due to the time-honored legal doctrine of collateral estoppel. I wholly disrespect United States elderly oligarchy called SCOTUS but can’t be the only legal mind that can see this coming.? It is just too obvious that the intentions of Congress were ignored giving the Federal Government the duty of providing these incentives in States that established the exchanges or to people living in States who refused. The doctrine is older than this nation.

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