Sunday, November 16, 2014

The Ultimate Irrelevance of Grubergate

So, many people have gone hysterical over the publicity surrounding revelations of embarrassing quotations and video clips from Jon Gruber talking about aspects of Obamacare.  SCOTUS is taking on a case that might remove federal subsidies from individuals on state exchange insurance plans that are not linked to the federal system thanks to some publicized remarks by Gruber, even though he has never been a member of Congress, and numerous commentators are carrying on about how Obamacare would never never never have passed Congress if people had known what Gruber said about how those fines are really taxes just like SCOTUS later said, not to mention how much he looks like the epitome of pompous arrogance when he declared that "voters  are stupid."  Hot stuff.

So, if SCOTUS decides that those subsidies won't get paid if the state exchanges do not hook up with the federal one, well, there is apparently some easy way to do this without changing how the state's system works.  Of course, there may be some states with exchanges run by tea party GOPsters who may just take advantage of this to actually let insurance premia from their state exchanges go up sharply for their citizens just to show how anti-Obamacare they are.  Of course, it is harder to raise such premia on people with insurance than simply refusing to extend coverage to people who do not have it as is going on in lots of those states where local anti-Obamacarers are refusing to accept money from the federal government to extend Medicaid to their poorer citizens who do not have any, which option would not even be happening if SCOTUS had not broken precedent to let states opt out of this Medicaid expansion.

As for  this matter of how revealing that those fines are really taxes way back when would have killed the possibility of passing Obamacare, one should keep in mind that it had been revealed by opponents that Obamacare would give us death panels, would never work because nobody would sign up for it, and it would cause insurance premia to soar to infinity, not to mention that the medical profession would probably not take any patients with such plans. This probably explains why all along polls have shown that when asked, most Americans say they oppose "Obamacare," even as they say they support all of its individual provisions. And, hey, if it had been known that the fines were taxes, all those Republican congressional representatives and senators who voted for Obamacare because Obama had granted their requests for changes in the law would not have done so, thereby tanking it, given how we know that Republicans are so against tax increases (just kidding, folks, for anybody who thinks that I thought there were any Republicans who did vote for it... )..

 Barkley Rosser


bakho said...

Die hard conservatives don't like Obamacare subsidies because they think of tax dollars going to black people and don't like it. The tax dollars don't go to poor people, they go to insurance companies, medical administrators and bloated doctor salaries.

Many of us HATE our insurance companies. We know it is a rip off. People are forced to slog through 8pt legalese fine print to try to understand how they will be ripped off by insurance. There are fines for not reading the fine print. Navigators help, but workers cannot take time off to spend an hour with one deciding which insurance company will rip them off the least. Single payer- Medicare expansion- enrollment by default would be much more palatable.

BigI and MedAm had to be paid not to block health care so we have a FUBAR delivery system.
-jonny bakho said...


Obama made many compromises with several GOP members of Congress in hopes of getting them to support his bill. He was persuaded upfront by the strong opposition of such interest groups as insurance companies and others not to pursue single payer. He was then pushed by trying to get Charles Grassley on board not to egven allow a public alternative option. The system is fully private, if government run, not at all the "socialized medicine" so many of its critics label it.

So, we ended up with this hodge podge of a Rube Goldberg system. However, it really does seem to be better than what was there before, and indeed a majority of people do apparently support all of its provisions, even if they are not able to put it together that they constitute the supposedly awful "Obamacare."

I could repeat Gruber's most notorious remark at this point, but will refrain from doing so.

run75441 said...

Dr. Rosser

As both Maggie Mahar and I will tell you, a two tier system is better than single payer. Most European healthcare systems are hybrids of both public funding of healthcare and supplemental commercial healthcare insurance. This is similar to commercial Supplemental Insurance for Medicare Part A&B, etc.

One reason you might not want single payer was what happened in England. Thatcher took so much $$ away from the NHS that it still hasn't recovered and severely underfunded. So they ration care. (If you're over a certain age, you're not eligible for certain surgeries (even if you're in good health and benefit would clearly out-weigh risk.) Would you really trust the Repubs to keep single payer fully funded? said...


WHO rated the French system the best in the world a few years ago. It is a hybrid system, so I am not against a properly structured hybrid system that covers everybody, something that the US remains the only OECD nation still not to do, even after ACA, and even though Hayek himself advocated universal national health insurance, something that most who cite him somehow do not know.

OTOH, the British system is a lot more than just "single payer." it is indeed full-blown socialized medicine, in contrast with the Canadian system, which is merely single payer. What is the difference? In the UK system health care workers are employees of the government, just as those in the VA system in the US are, whereas in Canada they remain privately employed, often by themselves. A more fully socialist system does make it easier for the state to cut its funding, and indeed, the UK has one of the lowest percentages of GDP spent on medicine among the high income countries, about 8%, compared with 17% in the US and about 10-12% in France, Germany, and several other high income European nations.

Myrtle Blackwood said...

The Australian Federal Government is said to spend 16% of the 2013 budget on health, btw.

I guess if you were to understand the difference between private and public service provision you could compare the death rate on Australia's First Fleet vs the death rate on its Second Fleet. The latter was private and the number of convict deaths was simply atrocious.

Health provision is 'public' in its nature. Selling medical care only to provide the incentive for customers to keep coming back is like stealing to sell again. It is highly profitable, but only for a tiny minority.

run75441 said...

Dr. Rosser:

The issue I think we can both agree upon is Congress blocking Medicare from negotiating with the healthcare industry on hospital supplies, pharma, services, hospitalization, etc. If it were to do so, I believe we would see greater savings with Medicare and healthcare in general for those not on Medicare.

Thanks for the reminder on the UK. Sometimes you read so much detail you tend to lose much of it until someone runs you over with it again. I do not believe a hybrid such as the PPACA is that bad. I was uninsurable in 2012 because of what happened to me and now they have to insure me.

I do believe the Repubs have dug themselves a hole with SCOTUS taking this up and yes SCOTUS taking this up is out of the norm (still waiting for Chemerinski to comment on it). Going backwards to what existed before the PPACA is not going to enhance the Repubs image with those who are experiencing insured healthcare for the first time.

Thaomas said...

Who knows what SCOTUS will do but the idea that Congress thought it was so important for states to set up exchanges that they did not wish to provided subsidies to citizens of states that did not set up exchanges (yet for some unexplained reason provided for setting up Federal exchanges when sates did not) seems very far fetched to me.