26 Jun 2015

An Even More Damning Gruber Clip on State Exchanges

Health Legislation 7 Comments

OK, this one is pretty clear. There is no ambiguity about a “federal backstop” and what that might mean. (Thanks to the honorable Keshav for passing this along, even though he disagrees with me.)

It is now pretty obvious to me that Gruber thought the bill would deny tax credits to people in states where exchanges were not set up. Now Gruber is just playing dumb, saying he must have been mistaken when speaking with such confidence. Well, he doesn’t sound like he’s ill-informed in this video. He sounds like he was part of the discussions (which we know he was, although everybody involved tried to deny it) and he is obviously very intelligent and a details kind of guy.

This bill was enormous. The fact that Matt Yglesias wasn’t talking about this particular aspect doesn’t really mean much to me. In my research (which you’ll see in my forthcoming book on U.S. health care, in the fall, co-authored with an ER doctor) I dug up all sorts of stuff that nobody has talked about.

UPDATE: Notice in the very beginning, Gruber says of this risk “the one folks aren’t talking about.” So for Gruber to now say, “Well geez, I must have been crazy back then, because nobody else was talking about this,” is kind of fishy. And gosh, I guess that’s the trouble Gruber when you admit to the world that you are willing to deceive people to push through your political agenda–now people have a hard time believing you.

7 Responses to “An Even More Damning Gruber Clip on State Exchanges”

  1. khodge says:

    Does this guy know nothing of economics? A well-run state is almost always better avoiding the trap the federal government is always setting up: We (the royal we speaking of the money that drops from the sky that they are keeping in a bank vault somewhere) will give you a ton of money in the first year and you’ll be on the hook for 10 tons of money within 5 years.

  2. Keshav Srinivasan says:

    Bob, when Gruber says “the one folks aren’t talking about” I think he just meant the general risk that states won’t set up their own exchange. I don’t think he meant “The provision that only people in state-run exchanges receive subsidies is something folks aren’t talking about.”

    For the record, I definitely agree that Gruber was involved in the discussions on Capitol Hill and the White House. He says so in his defense in the New Republic link: “There are few people who worked as closely with Obama administration and Congress as I did, and at no point was it ever even implied that there’d be differential tax credits based on whether the states set up their own exchange. And that was the basis of all the modeling I did, and that was the basis of any sensible analysis of this law that’s been done by any expert, left and right.”

    And I 100% agree with the part where you said “And gosh, I guess that’s the trouble Gruber when you admit to the world that you are willing to deceive people to push through your political agenda–now people have a hard time believing you.” Gruber’s deception concerning the Cadllac tax was absolutely reprehensible, so we should definitely treat him like the boy who cried wolf.

    • Bob Murphy says:

      Thanks Keshav. Eh, maybe (about what he meant about “the risk” folks aren’t talking about). Like I keep saying, I don’t think these videos are necessarily smoking guns, but when I hear Gruber now try to explain, he sounds like he’s lying to me (given my overall view of him).

      The reason I shared Corie Stephens’ article was that she had put forward something I hadn’t considered–that when the bill was drafted, the insiders didn’t anticipate just how much some of the Red states would flip against “ObamaCare” and so they really didn’t think it was a serious possibility that states would turn down the money.

      • Keshav Srinivasan says:

        “The reason I shared Corie Stephens’ article was that she had put forward something I hadn’t considered–that when the bill was drafted, the insiders didn’t anticipate just how much some of the Red states would flip against “ObamaCare” and so they really didn’t think it was a serious possibility that states would turn down the money.” That is undoubtedly true. I and all the liberals I knew were confident that the funding was going to be a sufficient inducement to build the Exchanges. Liberals thought some states might turn down the Medicaid expansion, which is why the bill contained a threat of withholding all Medicaid funding. But not building the exchanges wasn’t viewed as a real possibility.

        But I think that just bolsters my side of the argument: liberals thought states would build exchanges just based on the funding, so what would be the need to throw in a provision threatening subsidies?

        • Bob Murphy says:

          Keshav well we are talking about different things. By “funding” I meant citizens in the state getting federal tax credits.

  3. Yancey Ward says:

    I will just leave this comment here- when you were wondering about what he meant by “backstop” in the previous video- you just have to listen to the unequivocal assertion that followed that- that not setting up a state exchange meant that the citizens of that state would not get the subsidies- he did not qualify that statement before or afterwards.

    The court made the wrong decision on Thursday, but I was not surprised- after Roberts did the last minute switch to save the law in 2012, I knew with almost certainty that he would be forced to do so again. I wasn’t even surprised by Kennedy’s vote after reading the transcripts of the oral arguments. In any case, I think the Republicans dodged a big bullet on this one- I think a lot of Democrats in positions of power are starting to realize the actual finances of the exchanges is untenable given the recent premium-hike requests, and were already starting to look for a scapegoat. The court isn’t given itself as that target.

  4. Yancey Ward says:

    And one last thing- read Gruber’s own equivocating defenses once the videos surfaced. For example, how he said that maybe he was thinking about how the feds might drag their feet. Having made the initial statements at least three times, and almost certainly many more than that during his tours of speaking (it appears to be part of a prepared presentation about the exchanges (and all of these after the law was signed by Obama!), it is utterly implausible that he isn’t certain about why he said what he said. The only rational explanation for why he hasn’t made a definitive statement about the matter is that he knows the law meant to deny credits to the federal exchanges, and simply didn’t want to have to further defend an outright lie.

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