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No, Scott Walker didn't demolish the legal case against Obamacare

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Did a Republican governor deliver a striking blow to the pending Supreme Court case against Obamacare? The liberal ThinkProgress site thinks so: it published video Wednesday of Wisconsin's Scott Walker saying there is "no real substantive difference between a federal exchange or a state exchange."

That statement is important because it cuts against the argument that plaintiffs are making in the King v. Burwell case: that there's a huge difference between federal and state exchanges, and therefore the states using the federal marketplace can't give out subsidies to shoppers.

Here's a quick guide to the Walker comments, how they tie into the case, and what they're likely to mean for Obamacare's fate before the Supreme Court.

1) What did Scott Walker say?

ThinkProgress posted a clip from 2013 interview that the Wall Street Journal conducted with Walker. In it, Walker is asked about his decision not to build an Obamacare exchange, instead opting to have Wisconsin rely on Walker says that after spending "two years looking at this," and meeting with Health and Human Services Secretary Kathleen Sebelius, he concluded that "there's no real substantive difference between a federal exchange, or a state exchange, or the in-between, the hybrid, the partnership." Here's the video:

And here's a transcript of what Walker said:

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.

Walker wasn't discussing the King v. Burwell case in these comments — instead, his remarks were meant to argue that state exchanges didn't actually give states much independence at all. The federal government, he argues, would determine "what's going to be covered" and run a whole host of other issues. But ThinkProgress argues these comments are also applicable to the case.

2) What do Walker's comments have to do with the Supreme Court?

supreme court

(Chip Somodevilla / Getty News Images)

One key issue — arguably, the key issue — in King v. Burwell is whether the federal exchange works the exact same way as state exchanges. The plaintiffs argue that it doesn't: that the statutory language of the Affordable Care Act only allows state exchanges to give enrollees subsidies to buy health insurance.

The defendants disagree. They think what Walker says is right: that the state and federal exchange were meant to function the exact same way, with the federal government stepping in and building marketplaces that could do everything one that a state built would.

That's why ThinkProgress argues that the Walker remarks matter. They make the same point that the Obama administration has made repeatedly in court: that Congress intended for state and federal marketplaces to work the exact same way.

What the Supreme Court is really trying to divine in its case is congressional intent. What matters to them isn't necessarily what Scott Walker thought the law meant, but what Congress thought, at the time it wrote the Affordable Care Act, its words meant.

Ian Millhiser, justice editor at ThinkProgress, writes that the Walker remark "reveals that a man who was tremendously motivated to find flaws in the law’s framework wasn’t even able to spot the alleged flaw identified by the King plaintiffs, and it raises grave constitutional doubts about these plaintiffs’ legal theory."

3) Will the Supreme Court care about Walker's remarks?

jon gruber

MIT economist Jon Gruber's comments have factored into the legal case against Obamacare. (Chip Somodevilla / Getty News Images)

Gaming out what the Supreme Court will think is always tricky. The legal battle in King centers on whether Congress intended to limit subsidies to state exchanges. Scott Walker, obviously, was not in Congress helping to write the law. And so his words probably won't do much to sway the Supreme Court.

At the same time, this hasn't stopped those involved with the case from citing those outside of Congress to make their legal cases. Most notably, the plaintiffs seized on comments from MIT economist Jon Gruber, discovered earlier this summer, where he seems to suggest that Congress meant to limit subsidies to state exchanges. (Gruber has since said he was speaking off the cuff and believes all states should have subsidies.)

In arguments filed with the Supreme Court last month, the plaintiffs cite Gruber's comments as proof of their position. The idea here is that Gruber was consulting with Congress and the White House during the health law's drafting, and should have a decent sense of what legislators were thinking. While he's not a member of Congress himself, plaintiffs think his words should be taken as a decent proxy of the body's viewpoint.

You could see the defendants in King take a similar approach to Walker's comments. He's a governor who says he spent two years studying the Affordable Care Act, talked at length with both administration officials, and, one would expect, Republican members of Congress, and came away thinking that that state and federal marketplaces are identical.

There is, however, one reason that Gruber's comments could carry more weight with the Supreme Court than Walker's. Gruber's remarks were really specific to Obamacare's tax credits. In one video, Gruber talks about how there are "billions of dollars at stake here in setting up these exchanges."

The Walker comments don't get to that level of granularity. They more generally address the fact that the state and federal marketplaces should work the same. And that could make them less of a force in the courtroom, when the Supreme Court hears arguments on this case on March 4.

4) So is there any reason to pay attention to the Walker comments?

While the Walker comments may not prove legally relevant, they do speak to how marginal the plaintiffs' argument — that the federal exchange can't distribute subsidies — was during Obamacare's implementation.

Walker is an outspoken opponent of the Affordable Care Act — to the point that his state returned exchange grant funding to the federal government. He had lots of motivation to find holes and problems with Obamacare in the two years he said he spent studying the the law. Indeed, he spent that time building a case against the exchanges, arguing that the fact that the federal government gets to set the rules for state exchanges means they're not really state exchanges at all.

The fact that Walker never came across the idea that Congress has intended to make subsidies illegal on federally-run exchanges underscores the fact, often denied by the plaintiffs in King, that this simply wasn't an interpretation that had any mainstream foothold up until the plaintiffs made it the centerpiece of their court case.

This was, for what it's worth, also my experience as a reporter covering Obamacare. It's backed up by Congressional staff who worked on the law: there has, for years now, been widespread agreement that of course every exchange would have access to subsidies. This is a point where Michael Cannon (the CATO expert who helped draft the King argument) and I disagree, and you can read more of his viewpoint on the subject in my interview with him. Walker's comments may not be very legally relevant, but they're evidence of a larger context that is legally relevant.

Correction: An initial version of this post incorrectly identified the website that posted the Walker video. It is ThinkProgress, a news site owned by the Center for American Progress.