There are worse things to be called than stupid

Do-gooder Eleanor Roosevelt would have made a terrible spokesperson for the Affordable Care Act. (U.S. National Archives and Records Administration)

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.”

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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.

 

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Joshua DeCuir
3 years 8 months ago
And we wonder why people don't trust government. The problem with Mr. Gruber's comments is that they show how hollow were Pres. Obama's promises about transparency & openess. Here's note Obama-hater Andrew Sullivan on Gruber-gate: "Obama pledged to be that kind of honest, straight-talking president. Often he is. On the most important domestic policy achievement of his presidency, he wasn’t... I support the ACA; but I cannot support the kind of politics that made it happen. And I refuse to believe that a democracy has to operate this way for change to occur. Gruber’s arrogance and condescension are just meta-phenomena of this deeper dysfunction. Someone needs to treat Americans as adults again before this democracy can regain the credibility it so desperately needs to endure." Finally, is Mr. Sullivan's voice to be the sole voice of America regarding Republican policies & proposals? If so, that is disappointing, as he shows a decided aversion to any even-handed assessment of GOP proposals. For example, contra his doom-and-gloom apocalyptic descriptions of GOP policies, perhaps he'd care to look at proposals from Yuval Levin & Ramesh Ponnuru on health care reform. Or Sen. Mike Lee's middle class tax reform proposal. Or James Capretta's proposals regarding wage stagnation & the labor market.
ed gleason
3 years 8 months ago
A good example of using stats to confuse people is Mr.Hug's comment "the folks that lost their policies was about 6,000,000 and the Obamacare enrollees are about 8,000,000.' So I ask How many who lost or not renewed their non-complying policies enrolled in new complying policies ? maybe as high as 5.5 million and are not counted in Obama care enrolls???
J Cosgrove
3 years 8 months ago
Mr. Sullivan, If you cared about the poor, you would not be a spokesperson for the Democratic Party. You OP is so disingenuous after all the harm that Democrats have done to the poor and the underclass of our society.
Chuck Kotlarz
3 years 8 months ago
What is the “harm” that Democrats have done? Are you aware the divorce rate in deep red states runs 25% higher than in deep blue states? Life expectancy is two years shorter in deep red states than deep blue states. Deep red state incarceration rates run 50% higher than deep blue states.
Joshua DeCuir
3 years 8 months ago
Just one other point re: your comments about Social Security seems salient to me. Mr. Sullivan says "Logically, if the ACA is repealed, Social Security, which redistributes wealth from the young and healthy to the old and poor, should go next." The difference, it seems to me, is that Social Security has always been premised on the notion that the benefits one receives in old age are in some significant way tied to the benefits each worker has paid into the system over their working life, & not just income-transfer full stop. Roosevelt's rhetoric in support of Social Security (and that of Democrats for several generations after him) was full of moral language about the value & dignity of work, & social security benefits being tied to work. That, it seems to me, is a crucial difference between the rhetoric Gruber has used here & that Mr. Sullivan is justifying.
Robert Sullivan
3 years 8 months ago

Millions of workers benefit from the Affordable Care Act by being able to purchase insurance at affordable rates, regardless of pre-existing conditions. So they do pay into the system. The perception that its primary aim is to provide "free" health care to people who don't work is erroneous, but the Obama administration has not done a good job of correcting that misperception.

Joshua DeCuir
3 years 8 months ago
Precisely. So I'm a bit confused at your non-chalance over the duplicity that Andrew Sullivan points out was at the heart of the politics of its passage.
J Cosgrove
3 years 8 months ago
One of the things that the Gruber tapes has provided is that the only way the Massachusetts plan could have worked was due to a $400 million subsidy from the federal government. Apparently Ted Kennedy controlled a lot of money that was going to Massachusetts. This was not revealed in any news reports but was available if anyone had ever watched Jonathan Gruber. He has left a huge data base of videos as he let everyone know how important he was to this legislation. The ACA was never about cost so to call it the Affordable Care Act was the probably the most cynical part of all. It was about universal coverage and it may be failing on that too as many prefer to pay the penalty. There are still plenty of uninsured. Cost containment or lower costs were supposed to be way off in the future. One side benefit of this which is actually conservative in nature is that the ACA forces huge deductions on those signing up for it. It is essentially a catastrophic health care plan and will cause people to seek the cheapest health care possible because of these huge deductibles. It may in fact lower health care costs as people avoid seeking doctors or medical attention and search for cheaper alternatives. Of course there are more efficient and cheaper ways to accomplish the same objective but that was not politically palpable to Democrats and apparently Mr Sullivan. It would require the market not the government. It is all about appearances of supposedly helping the poor and not actual success. That is why we have such a big problem with the underclass today.
Richard Hug
3 years 8 months ago
Hold on just a minute...the other thing mentioned by Gruber is that the Romney care depends on $400,000,000.00 subsidy from the feds. My question is that, if the Massachusetts population is about 7,000,000, and the US population is about 300,000,000. Is my math correct in that will cost us a.......my calculator just blew up! There is not unlimited money in the United States. We need to figure out how to care for the poor, 100 percent of the time, and be able to afford it. According to Mr. Gruber, the affordable part if it is simply untrue. If only he had told us...we are now in a big pickle. Also, before we pat ourselves on the back, if I remember correctly...the folks that lost their policies was about 6,000,000 and the Obamacare enrollees are about 8,000,000. Yes, it helps, but all of a sudden I can't seem to find the number of folks that are still uninsured. How many of folks in the US do not have basic health insurance?
Michael Barberi
3 years 8 months ago
I was a senior partner in a worldwide consulting firm specializing in healthcare and other employee benefits. My clients included Fortune 200 corporations, Insurance and BC/BS Organizations, HMOs, States and the Federal Government. I said this on an earlier article when the ACA was made into law. The government and the Congressional Budget Office overestimated savings and profoundly underestimated total costs. As we have seen since its passage, the original cost of about $900 billion ballooned to $2.7 Trillion a few years later. Does anyone think that Congress, yes the Democrats, would have voted for the ACA if they knew about the real costs? Make no mistaken about what I am saying. It is a noble goal to insure the uninsured. The question is: At what price and in what way? It is true that most, if not all people think that healthcare costs is what they have to paid in premiums, copays and deductibles. There is nothing wrong with that thinking. However, most Americas are seeing deductibles as high as $5,000 and premiums higher than what they were paying under their old plans. We now know: You cannot keep your plan; You cannot keep your doctor; and average Americas will not be saving $2500 per year. President Obama lied to the America people by saying the opposite about 31 times. As for Gruber's arrogant and irresponsible comments, they are indicative of the mentality that went into the design of the ACA and the overall public communications strategy. God help us.
Joseph J Dunn
3 years 7 months ago
Actually, Jonathan Gruber did call the American people stupid. Mr. Gruber has acknowledged that remark, and expressed his regrets. Mr. Sullivan wants us to believe that Gruber’s comments make sense if placed in the context of his lead-up words, “In terms of risk-rated subsidies, in a law that said healthy 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.” This explanation is disingenuous. First, early in the text of the law is: “…the requirement (to purchase health insurance) will minimize adverse selection and broaden the health pool to include healthy individuals, which will lower health insurance premiums.” Before passage, there was plenty of discussion about the need for younger, healthier people to enroll, in order to make the ACA financially viable. As Sullivan states later in his article, “The healthy pay for the sick, to some degree, in all insurance plans.” In renters and homeowners and auto insurance, those who have no claim subsidize those who do. Americans understood this concept of insurance long before the ACA debate. Sullivan posits, or infers that Gruber thought, that the Obama administration wanted to “avoid any appearance of wealth redistribution.” To my knowledge, there is no wealth redistribution in the ACA. But the ACA contains specific income redistributions: upper income households pay a higher Medicare payroll tax, higher investment gains taxes, and a higher tax on earned incomes. This was much discussed prior to passage. In the broader context of President Obama’s many comments about getting the “one percent” to pay “their fair share,” Gruber’s comment on this, and Sullivan’s reliance on it, are implausible. Sullivan is concerned about possible gutting of the ACA in the coming Supreme Court challenge to subsidies for those who use the federal exchanges. But if the Court disallows these subsidies, Congress can amend the Act to reinstate them. In his closing paragraphs, he seems concerned that the ACA might be repealed. “Logically,” he writes, “if the ACA is repealed,” then Social Security, public education and public transit laws should be repealed, because these also redistribute wealth. I cannot help but consider this obviously histrionic, however logical Sullivan may consider it. All of us, regardless of political affiliation, might focus on finding a way forward, rather than reliving the debates that led to passage. There is always the opportunity to improve.
J Cosgrove
3 years 7 months ago
To my knowledge, there is no wealth redistribution in the ACA.
Depends what one means by wealth distribution. It certainly is the taking of money from group and giving it to another. It is just not from people who are necessarily wealthier. Actually in many cases it might be the taking of money from those who are less well off to subsidize those who have more money, This is not the same as regular insurance where people pay different premiums based on risk differences. Someone with a history of accidents pays a higher auto insurance bill and so does someone who lives in a flood zone pay higher home owners insurance. Similarly smokers pay higher life insurance bills. No this is not normal insurance but a compulsion of higher premiums on some to pay for the lower than usual premiums of others.
Joseph J Dunn
3 years 7 months ago
The only distinction I was drawing is between Wealth and Income. Wealth (accumulated savings) might be redistributed by an estate tax, or an outright wealth tax a la Piketty. But income (current earnings) is what is redistributed by our income tax system and by the ACA taxes. Other redistributions in the ACA are the requirement that employers keep the employee's premium contribution below a fixed percentage of the employee's earnings, and obviously the subsidies that run through the income tax system. Again, these affect income, not wealth. There are many perversions of classic insurance concepts in the ACA, including those you point out, but I focused on points made in Mr. Sullivan's article, not the totality of ACA.
Joseph J Dunn
3 years 7 months ago
J. Cosgrove, For a related article on the ongoing American healthcare discussion, see Fr. Rozier's "Behind the Headlines" www.americamagazine.org/real-story-about-ebola.
J Cosgrove
3 years 7 months ago
I read it but do not see the point you are making. I also read your comment on the Ebola OP. Are you talking about poverty in Africa? (I have been to Africa and have seen the poverty in places) Are you talking about personal habits here in the US? (my father died at 59 and smoked 3 packs a day, my mother lived to 88 and didn't smoke her last 45 years of life even though she had diabetes and was always overweight) I am not sure how either one is related to your comment on wealth re-distribution or the lack of it. Mr. Sullivan's article is implying that we are hypocrites if we don't support the ACA and its wealth redistribution. I maintain that those who support the ACA are the hypocrites because it is dysfunctional and there are better ways. His arguments are nonsense but geared to to the reader's ignorance of what is really happening. In that way he and Jonathan Gruber are very similar.
Joseph J Dunn
3 years 7 months ago
Sorry for the confusion. My comment on the Ebola article has nothing to do with redistribution or the ACA. But obesity, which Fr. Rozier mentions, is America's major health problem (per Kaiser Family Foundation and OECD) , and with obesity personal choice may be a more important factor than social determinants such as poverty. Sixteen percent have income below the poverty line, but 37 percent suffering obesity. To point this out is not to "overlook social and environmental influences", or to lack empathy, but to consider carefully the "determinants of health"--Rozier's main point. You and I are substantially in agreement regarding Mr. Sullivan's article. As to the ACA, there's not enough ink.

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