Obamacare architect: Expect steep increase in health care premiums
Medical insurance premiums in the United States are on the rise, the chief architect of President Barack Obama’s health care overhaul has told The Daily Caller.
Massachusetts Institute of Technology economist Jonathan Gruber, who also devised former Massachusetts Gov. Mitt Romney’s statewide health care reforms, is backtracking on an analysis he provided the White House in support of the 2010 Affordable Care Act, informing officials in three states that the price of insurance premiums will dramatically increase under the reforms.
In an email to The Daily Caller, Gruber framed this new reality in terms of the same human self-interest that some conservatives had warned in 2010 would ultimately rule the marketplace.
“The market was so discriminatory,” Gruber told TheDC, “that only the healthy bought non-group insurance and the sick just stayed [uninsured].”
“It is true that even after tax credits some individuals are ‘losers,'” he conceded, “in that they pay more than before [Obama’s] reform.”
Gruber, whom the Obama administration hired to provide an independent analysis of reforms, was widely criticized for failing to disclose the conflict of interest created by $392,600 in no-bid contracts the Department of Health and Human Services awarded him while he was advising the president’s policy advisers.
Gruber also received $566,310 during 2008 and 2009 from the National Institutes of Health to conduct a study on the Medicare Part D plan. (RELATED: Full coverage of the health reform law)
In 2011, officials in Wisconsin, Minnesota and Colorado ordered reports from Gruber which offer a drastically different portrait in 2012 from the one Obama painted just 17 months ago.
“As a consequence of the Affordable Care Act,” the president said in September 2010, “premiums are going to be lower than they would be otherwise; health care costs overall are going to be lower than they would be otherwise.”
Gruber’s new reports are in direct contrast Obama’s words — and with claims Gruber himself made in 2009. Then, the economics professor said that based on figures provided by the independent Congressional Budget Office, “[health care] reform will significantly reduce, not increase, non-group premiums.”
During his presentation to Wisconsin officials in August 2011, Gruber revealed that while about 57 percent of those who get their insurance through the individual market will benefit in one way or another from the law’s subsides, an even larger majority of the individual market will end up paying drastically more overall.
“After the application of tax subsidies, 59 percent of the individual market will experience an average premium increase of 31 percent,” Gruber reported.
The reason for this is that an estimated 40 percent of Wisconsin residents who are covered by individual market insurance don’t meet the Affordable Care Act’s minimum coverage requirements. Under the Affordable Care Act, they will be required to purchase more expensive plans.
Asked for his own explanation for the expected health-insurance rate hikes, Gruber told TheDC that his reports “reflect the high cost of folding state high risk pools into the [federal government’s] exchange — without using the money the state was already spending to subsidize those high risk pools.”
Gruber’s Wisconsin presentation, previously available on the website of Wisconsin’s Office of Free Market Health Care, disappeared from the state government’s Web servers shortly after Wisconsin Gov. Scott Walker issued a Jan. 18 executive order scrapping the agency’s mission.
Minnesotans have already seen a 15 percent average rate increase because their state government is spending approximately $100 million to subsidize those high-risk pools. Gruber said they, too, will see a premium increase — even after subsidies are factored in.
In his presentation there in November, he estimated 32 percent of Minnesotans will face premiums hike similar to those of their neighbors in the Badger State.
In his Colorado analysis, which he delivered last month, Gruber wrote that while some may benefit from new tax credits folded into Obama’s health care overhaul, “13 percent of people will still face a premium increase even after the application of tax subsidies, and seven percent will see an increase of more than ten percent.”
Sally Pipes, president of the Pacific Research Institute in San Francisco, told TheDC that the health care law’s mandates will ultimately result in far greater costs across the board.
“If [instead] we change the tax code and allow a competitive market to build, and put doctors and patients in power, then that would really solve a lot of the problem,” Pipes said.
Pipes said she believes applying the Affordable Care Act, as written, will result in care “being rationed and more expensive.”
South Carolina Republican Rep. Trey Gowdy, who chairs the House Subcommittee on Health Care, told TheDC that consumers are beginning to understand that the president’s 2010 promises are out of sync with reality.
“What a shock,” Gowdy said, feigning surprise. “Obamacare doesn’t lower costs, doesn’t increase coverage, and has turned into a wildly unpopular, labyrinthine government overreach.”
“’If you like your health insurance, you can keep it’ has morphed into ‘I, President Barack Obama, will decide what you need and make others pay for it.'”
White House deputy press secretary Jamie Smith was unable to immediately respond to a request for comment.