Tag Archives: Jonathan Gruber

Consequentialists Dismiss Obamacare Consequences

15 Sunday Feb 2015

Posted by in Obamacare

≈ Leave a comment

Tags

, , , , , , , , , , , , , , ,

supreme-court-obama

The King vs. Burwell case now before the U.S. Supreme Court turns on whether the Affordable Care Act (ACA, or Obamacare) authorizes the payment of federal subsidies to consumers in states that do not sponsor their own state health insurance exchanges (up to 37 states, by some counts, depending on how certain “hybrid” exchanges are treated). In those states, Obamacare must be purchased on the federal (or a hybrid) exchange. Proponents of the law strongly desire the court to uphold the subsidies. However, the “plain language” of the law states that tax credits apply only to insurance purchased “through an Exchange established by the state.” That language does not appear to support the governments position in the case. In addition, one of the chief architects of the ACA, Jonathan Gruber, seemingly exposed the real intent of this provision:

“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 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.”

Who could have given a better description of the motive?

Others insist that the awkward language in the ACA on this point might have been a typographical error, that the tax credits were intended to subsidize purchases on any exchange, and that other wording in the legislation makes the legislative intent “ambiguous” at worst. Harvard law professor Laurence Tribe subscribes to this view. Tribe argues elsewhere that a ruling which finds federal-exchange subsidies illegal would throw the health insurance market into turmoil. Thus, taking a “consequentialist” approach, Tribe argues that the court should be reluctant to disrupt the market by ruling that subsidies were intended to be unavailable to states without exchanges under the ACA. This conveniently dismisses the fact that Obamacare itself has had and will continue to have so many negative “consequences.”

Obviously, not all agree that a ruling against the government would be such a travesty. A victory for the King plaintiffs would not increase anyone’s premiums. What it would do is prevent the IRS from shifting the burden of those premiums from enrollees to taxpayers. According to  Michael Cannon,  arguments against the plaintiff’s case have:

“… misrepresented the impact of a potential ruling for the plaintiffs by ignoring three crucial facts: (1) a victory for the Halbig [and King] plaintiffs would increase no one’s premiums, (2) if federal-Exchange enrollees lose subsidies, it is because those subsidies are, and always were, illegal, and (3) the winners under such a ruling would outnumber the losers by more than ten to one.”

Nevertheless, the  consequentialist argument suggests that the court might be reluctant to rule against the government in the absence of a viable and immediate alternative to Obamacare. That belief helped motivate the most recent GOP plan, sponsored by Senators Richard Burr, Orin Hatch and Representative Fred Upton, which is due for a vote in the House of Representatives next week. This alternative has been called “Obamacare Lite” by some GOP critics, and it does retain a few of the most popular Obamacare provisions. However, it eliminates some highly intrusive aspects of the ACA (the individual and employer mandates) and attempts greater reliance on markets to control costs. This review in the Washington Free Beacon is mostly favorable. Peter Suderman at Reason explains that the proposal would involve tax credits designed to promote affordability, but they would be less distorting and less generous than under the ACA. Here is a fairly complete but mixed review of the GOP alternative.by Robert Laszewski:

“My sense is that voters will end up liking parts of both Republican and Democratic ideas. They might ask a reasonable question: Why can’t we take the best from both sides? If Democrats would just admit Obamacare needs some pretty big fixes, and Republicans would be willing to work on making those fixes by putting some of these good ideas on the table, the American people would be a lot better off. In fact, I am hopeful that this is eventually what will happen once Obamacare’s failings become even more clear (particularly the real premium costs) and both sides come to understand that neither will have a unilateral political upper hand.”

Laszewski is critical of the plan’s potential for creating a new set of winners and losers, but his objection losses sight of the fact that distortions in the ACA create so many winners and losers as to be indefensible. For example, the ACA limits differences in age rating, effectively transferring wealth from younger premium payers to much wealthier seniors, while the GOP plan loosens those limits. Similar distortions were created by Obamacare’s mandates, taxes, lack of choice in health coverage, revocation of individual coverage, poorly designed provider incentives and reduced physician reimbursements, to give a short list.

I like many of the ideas in the Republican plan, but it is a compromise. Its reforms should reduce the cost of coverage. It increases choice, leverages market incentives, and reduces tax distortions, including the tax advantage of employer-provided coverage. At the same time, it wholly or partially retains ACA provisions that make coverage more affordable at low incomes and provide continuous coverage for those with pre-existing conditions. It also encourages the creation of state pools for high-risk individuals. These provisions might or might not  mollify “consequentialist” sentiment on the Supreme Court, leading to a majority ruling against the government in King vs. Burwell. If not, and while the question before the court is more narrow, the irony would be for the court to uphold the many destructive consequences of Obamacare.

The Incredible Glibness of Being Gruber

16 Tuesday Dec 2014

Posted by in Uncategorized

≈ Leave a comment

Tags

, , , , , , , , ,

Gruber Comic

Jonathan Gruber is apparently a man of contradictions. He told a congressional committee last week that he “did not write any part of the Affordable Care Act.” He was asked at the hearing why he had claimed in 2012 that he did write part of the law. According to Peter Suderman, writing in Reason, Gruber replied “that it was ‘an effort to seem more important than I was,’ and that he was ‘speaking glibly.’” Video evidence of Gruber’s glibbery keeps stacking up in the wake of his sworn testimony.  He made the same “glib” claim at least twice in 2010 and again in 2012. In those videos, Gruber seemed pleased to issue disclaimers to his econ classes at MIT and other audiences that he “helped write” the ACA (Obamacare). From Suderman:

“There is no way to reconcile his multiple past statements with the statements he made this week while under oath. Either Gruber spent two years lying about his role in writing the law, or he was lying this week in his sworn congressional testimony.”

Now, Gruber has been subpoenaed again by the House Oversight Committee, this time in relation to his work and the income he earned as an Obamacare advisor. However, the subpoena covers all documents and exchanges with government employees, including work product, the results of economic model simulations, and any communications related to contracts and the funding of his research. Poor Gruber is in hot water. Lying to Congress, if that charge were pressed, could earn him up to five years in prison.

Of greater importance is that he very likely furnished the administration, as the law was being drafted, with economic projections showing that some existing private health plans would be cancelled. In his testimony last week, he admitted that his model simulations showed as much. Of course, President Obama was quite glib in his repeated assertions that “if you like your health plan, you can keep your health plan.” From Reason:

“Shouldn’t that mean that Gruber knew that administration’s repeated promises that those who like their health plans could keep their plans under the law weren’t true? 

Gruber was asked about the promise…. ‘I interpreted the administration’s comments as saying that for the vast majority of Americans the law would not affect the productive health insurance arrangements that they have,’ he said. ‘I did not see a problem with the administration’s statement.’

Of course he didn’t. Gruber is, after all, someone who argued that ‘lack of transparency’ was key to passing the health law.”

In fact, on the question of lost coverage, Gruber’s own comic book on the ACA made the same assurances as the Administration. See the frame at the top of this post! More contradiction.

Another crucial point is that Gruber claimed to have written the part of the ACA related to state health insurance exchanges. He stated on multiple occasions (captured on video) that the federal health insurance subsidies created by the ACA were intended as incentives for states to create their own exchanges. The “plain language of the law” is consistent with that claim; it is explicit in providing for subsidies only when a policy is purchased through a state exchange, not a federal exchange. Next year, the Supreme Court will hear the case King vs. Burwell, which turns upon whether the law itself disqualifies ACA insurance buyers in 36 states from collecting federal subsidies. Gruber’s videos appear to be quite damaging to the government’s case.

There Oughta NOT Be a Law

11 Thursday Dec 2014

Posted by in Uncategorized

≈ 1 Comment

Tags

, , , , , , , , , , , , , , , , , ,

image

We have too many laws and too many busy-bodies wishing to force others into conformity with their own moral and  behavioral strictures. It is more excessive in some jurisdictions than others, but the unnecessary criminalization of harmless behavior is a spreading canker. The death of Eric Garner  in New York City exemplifies the horrible consequences, an aspect which sets it apart from the death of Michael Brown in Ferguson, Missouri. Last week, Mark Perry posted links and summaries of three essays on Garner’s death “and what it teaches us about over-criminalization, government force, police brutality, the regulatory superstate, and the violence of the state.”

Both the Brown and Garner cases involved tobacco products, a primary target of busy-bodies worldwide. Garner was choked to death by police who restrained him for violating a law against selling individual cigarettes (“loosies”). Brown, then a suspect in a strong-arm convenience store theft of Swisher cigarillos, was shot by an officer claiming that Brown charged him in the street after a physical altercation moments earlier. Both incidents are said to have involved excessive force by police toward African Americans, but grand juries refused to indict the officers in both cases. Whether excessive force was used against Brown or Garner, or whether racism was involved, a major contrast is that the Garner case involved the enforcement of a law that seems ridiculously petty.

The three links provided by Perry are from:

    • J.D. Tuccille, who argues that over-regulation of behavior not only leads to conflict but also encourages corruption in law enforcement.
    • Randy Soave, who discusses the incentive structure faced by police and the extent of over-regulation, “from cigarettes to sodas of a certain size, unlicensed lemonade stands, raw milk, alcohol (for teens), marijuana, food trucks, taxicab alternatives, and even fishing supplies (in schools)“.
    • Jonah Goldberg, who elaborates on a simple truism: if you pass a new law, it must be enforced. Enforcement means force, and force is what government is all about. Therefore, if you insist on more detailed control over others, you can expect some violence.

Michael Munger makes the same point, condemning both the left and the right for their failure to understand the simple but far-reaching flaw in our polity:

“The left is outraged that the state is not doing exactly what the left expects from an idealized, unicorn state. In fact, the state is actually made up of actual human-style people, and people are flawed. The left wants to rely on abstract systems, and then be perpetually astonished when things go really wrong. It’s not bad people that are the problem. The THING, the thing itself is the abuse, folks…. The right is just denying that there is a problem, the system is working, the jury has spoken, etc.”

In “Worse Than Racism,” Eric Raymond discusses Garner’s death in the context of Alexis de Tocqueville’s  “soft despotism,” our penchant for promulgating rules for others “all justified in soothing ways to achieve worthy objectives. Such as discouraging people from smoking by heavily taxing cigarettes. Eric Garner died in a New York minute because ‘soft despotism’ turned hard enough to kill him in cold blood.”

Raymond presses hard:

“Every one of the soft despots who passed that law should be arraigned for the murder of Eric Garner. They directed the power of the state to frivolous ends, forgetting – or worse, probably not caring – that the enforcement of those ‘small complicated rules’ depends on the gun, the truncheon, and the chokehold. 

But we are all accessories before the fact. Because we elected them. We ceded them the power to pass oh, so many well-intentioned laws, criminalizing so much behavior that one prominent legal analyst has concluded the average American commits three inadvertent felonies a day.”

Finally, here’s an interesting connection: research  advocating high taxation of cigarettes  was published in 2008 by none other than Jonathan Gruber. Yes, the architect of Obamacare who often gloated on camera at academic conferences about the clever lack of transparency in the health care law and the stupidity of the American voter. He was also busy providing a rationale for the morality meddlers to more heavily tax and regulate “unacceptable” behavior. It is fitting and ironic that such an infamous elitist as Gruber has a connection to the soft despotism that led to the death of Eric Garner.

Obamacare’s Verity Disparity

26 Wednesday Nov 2014

Posted by in Uncategorized

≈ Leave a comment

Tags

, , , , , , , , , ,

156570_600

Increase demand for health care and reduce the cost of care… that was the the major thrust of the Obamacare sales job. It didn’t take an MIT economist to realize that the promise would be unattainable without major steps to enhance the supply of medical care. Unfortunately, nearly everything in the ACA and its implementation ensured the opposite, from the medical device tax to compliance burdens on providers and low reimbursement rates. Given the supply constraints, it should be no surprise that access to care among the newly insured is limited. Scott Atlas notes that Obamacare placed an emphasis on general care rather than specialist care, despite the growing need for specialists to serve the needs of an increasingly elderly population:

“Virtually all patients with serious diseases today are managed by specialists and with advanced technology. For seniors, visits to specialists have increased from 37% of visits two decades ago to 55% today. And that’s appropriate, because those are the doctors who have necessary training and expertise to use the complex diagnostic tests and devices, state-of-the-art procedures, and novel drugs of modern medicine. … Fittingly, Americans unambiguously prioritize the latest medical technology.”

Atlas also points out that most of the newly insured obtained their coverage via Medicaid:

“Medicaid is already refused by more than half of doctors across America, according to 2013 data from a 2014 Merritt Hawkins survey. Likewise, more than 20% of primary care doctors already accept no new Medicare patients, five times the percentage who refuse new privately insured patients.

In 2012 alone, CMS reported that almost 10,000 doctors opted out of Medicare, tripling from 2009. And, counter to the administration’s demonization of private insurers, it is Medicare that consistently ranks at the top of the charts for the highest rates of claim refusals….”

In describing the campaign to make Obamacare law, the pejorative “sales job” never seemed more appropriate in light of the recent revelations provided by the Jonathan Gruber videos. He is the aforementioned MIT economist, and his statements indicate that the law’s team of elite architects knew full well that selling it would require deceit. Here are links to two perspectives on this crew’s dishonesty and contempt for voters: first, Clive Crook provides a Democrat voter’s perspective on certain tendencies in the party that he finds regrettable:

“This syndrome of Democratic disdain, I think, has two main parts. First, liberals have an exaggerated respect for intellectual authority and technical expertise. Second, they have an unduly narrow conception of the values that are implicated in political choices. These things come together in the conviction that if you disagree with Democrats on universal health insurance or almost anything else, it can only be because you’re stupid.

Voters recognize this as insufferable arrogance and, oddly enough, they resent it. Democrats who might be asking where they went wrong in the mid-term elections — not that many of them are — ought to give this some thought. The conviction that voters are stupid, however, isn’t just bad tactics. It’s also substantively wrong.”

Jonah Goldberg offers a view of the Obamacare deceit from the right:

“Speaking of transparency, the Washington Examiner’s Timothy Carney notes that Obama frequently attacked the ‘special interests’ opposed to the bill even though the very same interests supported the bill thanks to the generous bribes — er, ‘subsidies’ — included therein. From the Rose Garden in 2009, Obama attacked drug companies for opposing the bill, even though he knew the drug lobby helped craft it. (Carney notes, ‘Behind closed doors, the White House apologized to drugmakers for that line, blaming a ‘young speechwriter.’’)”

Here is an earlier SCC post on the Gruber videos, including the damage wrought by Gruber to the government’s argument in the upcoming King v. Burwell case to be heard by the Supreme Court next year.

Obamacare Gets a Whole New Grube

13 Thursday Nov 2014

Posted by in Uncategorized

≈ 1 Comment

Tags

, , , , , , , , ,

obamacare-cartoon

Is anyone unaware at this point that Obamacare (the ACA) was built on a foundation of lies? The “tax vs. penalty” controversy was squirrelly, as the administration shifted positions in defending the individual mandate before the Supreme Court in 2012. Surprisingly, that court decision went in favor of the ACA despite the obvious flip-flop. Of course, we heard Obama say, “if you like your plan, you can keep your plan,” and “if you like your doctor, you can keep your doctor,” both of which were patently false statements. Now, we have the curious case of Jonathan Gruber, the celebrated MIT economist and a chief architect of the ACA. A citizen journalist (“real” journalists were asleep at the switch) uncovered a series of video clips of Gruber in which he strongly asserts that there was willful deceit involved in the crafting and selling of the health care law. Some Gruber:

“This bill was written in a tortured way to make sure CBO did not score the mandate as taxes. If CBO [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 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….”

Ron Fournier, at the first link above, writes:

“Liberals should be the angriest. Not only were they personally deceived, but the administration’s dishonest approach to health care reform has helped make Obamacare unpopular while undermining the public’s faith in an activist government. A double blow to progressives. …Gruber’s remarks are evidence that the administration intentionally deceived the American public on the costs of the programs. …And so even I have to admit, as a supporter, that Obamacare was built and sold on a foundation of lies.”

Even worse for those clinging to hope that the ACA will survive intact, in July, a year-old video came to light in which Gruber confirmed that the Obamacare subsidies were intended as an inducement  to states to provide their own insurance exchanges, rather than relying on the federal exchange. This is now the subject of another case before the Supreme Court, King vs. Burwell. Sacred Cow Chips featured a post on Gruber’s statement in July, when he attempted to pass-off the remarks as mistaken, a “speak-o” as he put it, but he said the same thing on at least three separate occasions. In so doing, Gruber helped to make the case that subsidies were not intended for individuals purchasing insurance through the federal exchange.

There has been a spate of recent contentions that Obamacare is “working” after all. Lest any hypocrite take solace that the lies and deceit were worthwhile after all, the positive news is scant. Of course, the number of uninsured has declined to some extent, but almost entirely via Medicaid enrollment, for which access to providers is often problematic. Premia have increased for many previously insured under individual policies. Overall measures of premia are distorted by subsidies and the so-called “risk corridors,” basically bailout funds kicked back to health insurers to keep them profitable. There are a host of other problems. You can read about some of them here.

Obamacare Web Weavers Tangled Again

27 Sunday Jul 2014

Posted by in Uncategorized

≈ 2 Comments

Tags

, , , ,

Speak-O 

Did Congress intend to deny subsidies to those purchasing health insurance on federal exchanges under Obamacare? The DC Circuit Court ruled that it did, based on the “plain language of the law,” in last week’s Halbig v Sebelius decision. Shikha Dalmia writes that the howls of protest from some ACA supporters are disingenuous at best, especially those from health economist Jonathan Gruber, who was a key player in designing the law. In 2012, his standard talking points included assertions about incentives for states built into the law. On at least three occasions, Gruber said that any state would be crazy not to set up its own exchange because that would deny its citizens the right to federal tax credits on premium costs. Obviously, Gruber did not anticipate the backlash against the ACA, as manifested (among other things) by 36 “crazy” states refusing to set up their own exchanges.  

Earlier this week, before proof of Gruber’s earlier statements had surfaced, he insisted to Chris Matthews that the “plain language” on this point in the ACA was something like a typo. Later, when the first Gruber video was revealed, he stated that his comment was mistaken, that it was a “speak-o.” Hahaha! Nice try.

Key legislators certainly knew that the state exchange requirement was built into the ACA, as this video of remarks from Max Baucus at a Senate Finance Committee hearing proves. Of course, many legislators might have missed this point, but the bill never went through a careful mark-up process, and of course some lawmakers, like Nancy Pelosi, felt that they had to “pass the bill to find out what’s in it.” Well, after all, should busy legislators be bothered to read a 1,400 page bill prior to a vote?