Jonathan Gruber is “ObamaCare’s architect” and a MIT professor. He is also the guy who made two poorly worded statements about the Affordable Care Act. This isn’t the type of story we like to cover on our site, as it is full of mind-melting juicy talking points that leave one non-the-smarter. That being said, the story is connected to a few really important aspects healthcare reform that we should be talking about, and taking a step back it’s about a man who may deserve a lot more respect than the media is slinging at him right now.
Who is Jonathan Gruber and What Does He Want With My ObamaCare?
Jonathan Gruber is an MIT economics professor who was key in creating both “Romney Care” and “ObamaCare”. Love his work or hate it, that is no small feat for one man. Over the years Jonathan Gruber has done a ton of smart stuff including, according to Wikipedia:
Jonathan Gruber is a professor of economics at MIT (Massachusetts Institute of Technology). He is also the director of the Health Care Program at the National Bureau of Economic Research, where he is a research associate. He is an associate editor of both the Journal of Public Economics and the Journal of Health Economics.
From 2003–06 he was a key architect of Massachusetts health care reform, also known as “Romneycare”. In 2006 he became an inaugural member of the Health Connector Board, the main implementing body for that effort. In that year, he was named the 19th most powerful person in health care in the United States by Modern Healthcare magazine. During the 2008 election he was a consultant to the Clinton, Edwards and Obama presidential campaigns.
He was elected a member of the Institute of Medicine in 2005.
In 2006, Gruber received the American Society of Health Economists Inaugural Medal for the best health economist in the nation aged 40 and under.
In 2009 he was elected to the Executive Committee of the American Economic Association.
In 2009–10 Gruber served as a technical consultant to the Obama Administration and worked with both the administration and Congress to help craft the Patient Protection and Affordable Care Act, often referred to as the ACA or “Obamacare”. The act was signed into law in March 2010, and Gruber has been described as an “architect”, “writer”, and “consultant” of the legislation. He was widely interviewed and quoted during the roll-out of the legislation.
In 2011 he was named “One of the Top 25 Most Innovative and Practical Thinkers of Our Time” by Slate Magazine. In both 2006 and 2012 he was rated as one of the top 100 most powerful people in health care in the United States by Modern Healthcare Magazine.
What Did Jonathan Gruber Say About ObamaCare?
Jonathan Gruber said two things that are being used sling mud at the Affordable Care Act, let’s discuss them both now:
Jonathan Gruber Says: Lack of Transparency… the Stupidity of the American Voter…
Let’s get this one out of the way first. The quote below is from a talk Gruber gave where he was trying convey the fact that something as simple as the semantics of calling something a mandate or a tax can make or break a bill. If you read everything he said or watch the video above you might not even catch what is wrong with this, but when the clip is taken out of context it can seem really messed up. Just so it’s clear, the point is being taken out of context a lot right now.
This bill was written in a tortured way to make sure CBO did not score the mandate as taxes. If [Congressional Budget Office] scored the mandate as taxes, the bill dies. Okay, so it’s written to do that. In terms of risk-rated subsidies, if you had a law which said that healthy people are going to pay in -– you made explicit that healthy people pay in and sick people get money — it would not have passed… Lack of transparency is a huge political advantage. And basically, call it the stupidity of the American voter, or whatever, but basically that was really, really critical for the thing to pass. And it’s the second-best argument. Look, I wish Mark was right that we could make it all transparent, but I’d rather have this law than not.
The problem here is that the law really was passed with what are now taxes being called mandates and probably would not have passed with the mandates being called taxes. It wasn’t until the National Federation of Independent Business v. Sebelius that the mandate’s fee was declared a tax. Given the status of Gruber this statement could not only be used to sway public opinion away from the Affordable Care Act, it could be used in lawsuits against the ACA moving forward as the next statement you’ll find below on subsidies already has.
Like the right to work law that limits collective bargaining, or the fact that Joe the Plumber isn’t a plumber, or when big business put initiatives on ballots that say the opposite of what people trying to vote for to confuse voters, or the President saying “if you like your plan you can keep it”, the truth about politics is that sometimes grey area marketing wins out over total qualified truth.
We have to ask ourselves: is the problem here Gruber’s choice of words, the semantics of mandates or taxes, or the fact his poorly worded point hints at an important truth that applies to politics in general.
What Gruber Says About the Remark:
While he hasn’t publicly commented he was on MSNBC and pointed out that he was speaking off-the-cuff at an academic conference, spoke inappropriately, and regrets making those comments. He then goes on to discuss the point he was trying to make at the time.
Jonathan Gruber Says: Subsidies are Tied to State Exchanges Used as Justification For Lawsuit
The “stupidity” statement makes a good talking point, but the Jonathan Gruber’s “subsidies” statement was actually used as part of an argument in a lawsuit that has thus far found subsidies to be illegal in 36 states. The statement below comes from a 2012 question-and-answer session, following a lecture he gave at a non-profit research group based outside of Washington.
Questioner: You mentioned the health-information [sic] Exchanges for the states, and it is my understanding that if states don’t provide them, then the federal government will provide them for the states.
Gruber: Yeah, so these health-insurance Exchanges, you can go on ma.healthconnector.org and see ours in Massachusetts, will be these new shopping places and they’ll be the place that people go to get their subsidies for health insurance. In the law, it says if the states don’t provide them, the federal backstop will. 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. 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 in the country. I hope 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, and that they’ll do it. But you know, once again, the politics can get ugly around this.
The problem here is that in Gruber’s opinion, and remember he helped to create the law, that if a state doesn’t set up an exchange then it’s citizens can’t get tax credits. Well that is exactly what three lawsuits are currently charging. Two of those lawsuits have initial rulings against citizens getting tax credits.
FACT: About 87 percent of people enrolled in ObamaCare’s Health Insurance Marketplaces receive subsidies.
Regardless of who said what, we should all be focusing on the fact that losing subsidies would be a major loss for the people and a best a Pyrrhic victory for even the most hardened repealer out there. Subsidies in 36 states may be on the line, but the tax provisions that collect the revenue to fund those aren’t.
The end result of subsidies being illegal in the 36 states that could lose them would most likely be states going back and setting up their own marketplaces, this would be funded by tax dollars. This means in a worst case scenario people lose subsidies, but we all still pay for them until states set up their own marketplaces. Sure that could drive a repeal under a Republican President in 2016 or could result in states refusing to set up exchanges (many refused Medicaid expansion after-all), but at what cost? Note: that question was rhetorical, but the answer is in the tens of billions including $36 billion in subsidies.
Gruber’s Response to The Subsidies Comment:
This response was given to newrepublic:
I honestly don’t remember why I said that. I was speaking off-the-cuff. It was just a mistake. People make mistakes. Congress made a mistake drafting the law and I made a mistake talking about it.
During this era, at this time, the federal government was trying to encourage as many states as possible to set up their exchanges. …
At this time, there was also substantial uncertainty about whether the federal backstop would be ready on time for 2014. I might have been thinking that if the federal backstop wasn’t ready by 2014, and states hadn’t set up their own exchange, there was a risk that citizens couldn’t get the tax credits right away. …
But there was never any intention to literally withhold money, to withhold tax credits, from the states that didn’t take that step. That’s clear in the intent of the law and if you talk to anybody who worked on the law. My subsequent statement was just a speak-o—you know, like a typo.
There are few people who worked as closely with Obama administration and Congress as I did, and at no point was it ever even implied that there’d be differential tax credits based on whether the states set up their own exchange. And that was the basis of all the modeling I did, and that was the basis of any sensible analysis of this law that’s been done by any expert, left and right.
I didn’t assume every state would set up its own exchanges but I assumed that subsidies would be available in every state. It was never contemplated by anybody who modeled or worked on this law that availability of subsides would be conditional of who ran the exchanges.