Jonathan Gruber did not really call the American people stupid. He called them merciless and cruel. The debate over the Affordable Care Act has not generated much evidence to contradict this view.
You may be sick of hearing about the sick, but as Ebola hysteria subsides, the ACA (“Obamacare”) is getting almost as much attention as it did last fall, when its primary website took an embarrassingly long time to sputter to life. Part of the new interest comes from the takeover of the Senate by Republican Party, still ostensibly committed to repealing the ACA “root and branch,” and from the new threat that the U.S. Supreme Court will strike down a key provision of the law over because of its confusing language. But the juiciest and simplest story comes from the impolitic comments by economist Gruber, who will be forever known as an “architect of Obamacare.”
Gruber got a lot more famous this week, thanks to videos released by the conservative website Daily Caller and by CNN. In one, he essentially brags about the political strategy behind Obamacare to an economics conference at the University of Pennsylvania in October 2013. You don’t get invited to speak at these things unless you can come up with insider stories so that attendees don’t regret rushing back from lunch, and Gruber complied. According to Forbes’s Avik Roy, Gruber described New York Sen. Charles Schumer as someone who, “as far as I can tell, doesn’t understand economics,” and called a staffer to Maine Sen. Olympia Snowe an “idiot.” Those were the remarks that conference attendees undoubtedly cherished and repeated the most, but a more subtle slander is now causing a furor in Washington.
In discussing the passage of the ACA, Gruber confided, “[a] 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 to get anything to pass.
Those two sentences have dominated “Grubergate.” Vox’s Sarah Kliff writes, “The broader context of Gruber's arguments is that they seem to confirm a lot of what conservatives already believe about Obamacare: that it was sloppily drafted by out-of-touch technocrats who view the American people with contempt.”
But New York magazine’s Jonathan Chait argues that Gruber was accurately describing “an irrational political system in which tiny bits of fact can be decontextualized and manipulated by demagogues.” (Death panels!) Chait’s quibble is with Gruber’s choice of word: “‘Stupidity’ is unfair. Ignorance is a more accurate term. Very few people understand economics and public policy. This is especially true of Obamacare—most Americans are unaware of the law’s basic functions or even whether their state is participating.”
Few of the early stories about Gruber’s remarks called attention to what he said just before the “stupidity” bomb: “In terms of risk-rated subsidies, in a law that said health people are gonna pay in—if it made explicit that healthy people are gonna pay in, sick people get money, it would not have passed.”
Another video, released on Thursday by CNN, has Gruber telling an audience at the College of the Holy Cross in 2010, “[Obama] knew when he was running for president that quite frankly the American public doesn't actually care that much about the uninsured.” To me, that stands as Gruber’s most cynical and negative statement about voters (a perverse kind of American exceptionalism), but CNN states with disappointment that “Gruber’s language is not as stark as in three previous videos.”
Gruber’s “gaffes” amount to an admission that the Obama administration feared voters would not accept the ACA if they knew how much it would benefit poor people, the ones who couldn’t afford to get sick. Though the growing uninsured population, as well as personal bankruptcies caused by illnesses, had worried just about everyone in Washington (even Republicans) before Obama took office, it was now considered politically risky to do anything about the problem. It was imperative to avoid any appearance of “wealth redistribution.”
The truth about insurance
The healthy pay for the sick, to some degree, in all insurance plans. (Chait: “If you are a relatively healthy person who gets insurance through your job, you are subsidizing your sicker co-workers in just the same, hidden way” as Obamacare.) But before the ACA, the very sickest and poorest could be excluded from this scheme, through exorbitant premiums and the denial of coverage because of pre-existing conditions. People with good jobs didn’t have to worry about this, and if you weren’t covered by an employer, you could buy cheap, bare-bones insurance—if you were young and healthy and didn’t want to subsidize things like maternal care and mental health services.
A lot of Americans thought (and still do) that this was “the best health care delivery system in the world.”
In the Holy Cross video, Gruber also states:
What the American public cares about is costs. And that’s why even though the bill that they made is 90% health insurance coverage and 10% about cost control, all you ever hear people talk about is cost control. How it’s going to lower the cost of health care, that’s all they talk about. Why? Because that's what people want to hear about because a majority of American care about health care costs.
Now that is, by far, the dumbest thing Gruber said on these videos. He’s talking about the overall cost of health care in the United States, something that .01 percent of the electorate has ever thought about. To almost all voters, “cost” means how much they pay for insurance premiums and for co-payments when they use medical services. They don’t care that aggregate spending is going down (or increasing at a slower rate) if their own premiums are going up. They don’t care that more people are getting basic health care, and they hate the idea of health care cost-efficiency, which has no benefits for an individual consumer.
The Affordable Care Act has similarities with Social Security, another big government program whose wealth-redistribution aspects had to be hidden from public view in order to secure passage by Congress. Social Security has an “individual mandate” in the form of a payroll tax, which individuals must pay (on wages up to $118,500) even if they have the means to fund their retirement with more lucrative investments. The fiction—or lie—is that Social Security beneficiaries are only getting back what they put in, but the program was designed so that retirees would get back many times more than their contributions. (According to a 2012 report by the AP, that’s no longer true for average workers, but “because benefits are progressive, low-income workers will continue to receive a positive return. For high-income workers the return went negative two decades ago.”)
Logically, if the ACA is repealed, Social Security, which redistributes wealth from the young and healthy to the old and poor, should go next. Then public education, which redistributes wealth from the childless and from private-school families to children with fewer economic advantages. And don’t forget public transit, which is sold to voters as a way of reducing auto traffic (no sure thing) rather than as a way to subsidize people who can’t afford to drive to work (a more certain result).
Just as Gruber said of the ACA, if the equalizing effects of such programs are made “explicit,” they might have a tougher time getting funds from Congress and from state legislatures. This outcome would presumably delight libertarians. It would also take us farther from a just and civil society, and history will not regard that as a smart move.