15 Nov 2013

MIT’s Gruber on ObamaCare

Health Legislation, Rothbard 27 Comments

[UPDATE below.]

I am not being dramatic for purposes of blog excitement: It didn’t really hit me just how awful ObamaCare was going to be, until I read this interview with the chief intellectual architect behind it, MIT’s Jon Gruber. (HT2 MR) My understanding is that Gruber:ObamaCare::Krugman:ObamaStimulus. (If anyone thinks that’s a bad analogy, please explain in the comments.)

Now it’s a hostile interview, to be sure. But look at some of the stuff Gruber admits, for example:

[Hugh Hewitt]: So Jon Gruber, I don’t think anyone can deny that there will be millions of people with massive sticker shock, and as a result, in early January, there are going to be people who were previously covered who are not presently covered, whom if they encounter a catastrophic accident or illness, will be bankrupt of their assets. Don’t you agree?

[Jon Gruber]: There will be some people who were previously covered who become uncovered. I agree. I think there will be at least ten and probably more like thirty times as many people who were previously uncovered who become covered. So basically, you have to ask yourself is your rule for legislation you can’t create any losers? Because if that’s your rule, you might as well shut down the government.

Incidentally, it’s interesting that in his throwaway line at the end, Gruber echoed one of Rothbard’s points about the Pareto principle and anarchism. But I digress.

UPDATE: Actually, Gruber is much more closely tied to ObamaCare than Krugman ever was to the Obama stimulus package. Gruber is the guy, you may recall, who was going on the talk shows promoting ObamaCare, without them notifying the viewers that he had been paid a boatload of money by the government for consultation on the project. (Note, I’m not sure how I feel about stuff like that; depending on how it played out, it’s possible Gruber wasn’t trying to deceive anybody. I’m just reminding you of the controversy, because Glenn Greenwald and Krugman went toe to toe over it.)

27 Responses to “MIT’s Gruber on ObamaCare”

  1. Transformer says:

    “There will be some people who were previously covered who become uncovered. I agree.”

    Can someone explain how that will happen?

    • Blackadder says:

      “There will be some people who were previously covered who become uncovered. I agree.”

      Can someone explain how that will happen?

      The ACA causes the cancellation of their current insurance plan, and they don’t (and perhaps even can’t) get a new plan.

    • Bob Murphy says:

      Transformer wrote:

      “There will be some people who were previously covered who become uncovered. I agree.”

      Can someone explain how that will happen?

      For example, my policy will be canceled in the summer (unless they change the rules again). Right now I never “use” my insurance; it is a catastrophic plan with a high deductible. So in practice, I have paid everything out of pocket, though BlueCross negotiates down the price I pay. (Not sure if I could do that too, if I walked in with my checkbook.)

      If it turns out next summer that I have to pay double what I currently do in premiums, I would have to think long and hard about whether to keep insurance or just hope I don’t get really sick. In fact, I wouldn’t do that, because my son is involved too, and I don’t want to be gambling with him, but if it were just me, depending on the numbers I could definitely see skipping it for a while and building up savings elsewhere.

      So HH’s point was, for somebody who makes a decision like that, if such a person happens to get hit with a catastrophic illness, s/he gets wiped out. Whereas, if ObamaCare had never passed, the person would have maintained the catastrophic coverage.

      • Transformer says:

        I was under the impression that Obamacare made it compulsory to purchase cover.

        Is that incorrect ?

        • Rick Hull says:

          You are forced to pay a tax if you remain uninsured.

  2. Matt M (Dude Where's My Freedom) says:

    “So basically, you have to ask yourself is your rule for legislation you can’t create any losers? Because if that’s your rule, you might as well shut down the government.”

    Hey, finally something I agree with these guys about!

  3. Mike M says:

    “So basically, you have to ask yourself is your rule for legislation you can’t create any losers?”

    The needs of the many outweigh the needs of the few. The battle cry of the Progressive Tyrant.

  4. GabbyD says:

    Why is this horrible? isnt it obvious that all public policy creates losers and winners?

    • Major_Freedom says:

      Are you saying that that which is “obvious” cannot be horrible?

  5. Mogden says:

    Yes, I’m not really getting the point either. Reducing the size of the government dramatically would be overall best for the society, but it would certainly create some losers.

  6. MG says:

    You are all focusing on the comment where Gruber is actually being frank (the losers) — although this frankness was most needed when Obama was assuring us otherwise.

    Yet, the current disingenousness/exageration/and who knows, mendacity comes in “I think there will be at least ten and probably more like thirty times as many people who were previously uncovered who become covered.”

    There is already evidence that the number of those who will become “newly” insured will fall well short of expectations, and most of them are just be signed up for Medcaid — big woopie. More worrisome, the number of those who will ultimately have their insurance arrangements cancelled/seriosuly disrupted/significantly jacked up will be over time far more than the first wave we have already seen. And these are the ones who had painstakingly managed their affairs to find having had insurance they liked and could afford.

    • Matt M (Dude Where's My Freedom) says:

      The inevitable statistics game is going to play out as follows:

      Those whose plans are cancelled by evil, for-profit insurance companies (who are surely only doing it out of greed) will be considered “uncovered” because after all, their plans are being canceled. Once they enroll in the state or federal exchange, they will be listed as people who didn’t have insurance, and now do, thanks to Obamacare.

  7. Major_Freedom says:

    It’s actually a standard practise in the private market that one disclose whether or not one receives compensation from an institution of whose products or equity/bonds one is promoting, recommending, or soliciting from clients.

    But I have noticed that when it comes to the large media companies and their relationship to government, compensation or consideration disclosures are NEVER made to the viewer so that the viewer can make an informed judgment as to the independence and objectivity of the guest’s statements.

    For example, a whistleblower recently revealed that while working for CNN, she learned that CNN executives were receiving payments from various government agencies to promote and cover that department’s activity.

  8. Major_Freedom says:

    I was watching an interview of an Obamacare supporter in Congress, can’t recall his name but he might have been from Democrat from Minnisota, but anyway, he went so far as to reject Obama’s own admission that he misled people about whether they can keep their existing plans.

    • Major_Freedom says:

      Not only that, but when discussing the fact that Obamacare won’t “work” unless enough new, young people sign into the program, instead of using the accurate term that describes this, i.e. “We are running a Ponzi scheme”, he instead said “We need to balance the risk pool”.

      Hahaha, I could not stop laughing…

      Final note, remember way back when millions of young Democrat/Obama supporters were advocating that government essentially take more control over the healthcare market? That they wanted to help poor people, etc? Who here is surprised that hardly any of those young people are actually signing up for Obamacare?

  9. Blackadder says:

    So basically, you have to ask yourself is your rule for legislation you can’t create any losers? Because if that’s your rule, you might as well shut down the government.

    Of course shutting down the government would itself create losers, and so wouldn’t be a Pareto improvement.

    • Matt M (Dude Where's My Freedom) says:

      Much in the same way that reclaiming your stolen property from a thief “creates a loser” out of the thief.

      • Blackadder says:

        Much in the same way that reclaiming your stolen property from a thief “creates a loser” out of the thief.

        Right. Which is why people typically don’t judge actions based on Pareto efficiency.

        • Tel says:

          A lot of people pretend to believe in Pareto efficiency.

          • Ken B says:

            Thats not quite the same thing. Many a change that is not a pareto improvement can be altered to include payments to make it one. This will always be possible when you are not pareto efficient. You really do want pareto efficiency at a minimum.

            • Tel says:

              Those payments do not in practice go to people who would be made worse off, they go to people who can get themselves into a position to demand payments (or to their representatives, whoever is more convenient at the time).

              http://crookedtimber.org/2013/10/31/economics-as-a-moral-science/

              I’m tempted to also point out that while some proportion of the population are motivated by envy (not a small proportion either) the implication is that all Pareto improvements are impossible. Which is why we fall back on Democracy instead.

  10. Anonymous says:

    So government can fail and thats okay, but if the “market fails” it must be destroyed

    • Blackadder says:

      So government can fail and thats okay, but if the “market fails” it must be destroyed

      You fail reading comprehension for the day.

      • Rick Hull says:

        To be fair, it looks like you didn’t comprehend the Pareto reference. Go check out Bob’s link.

        • Blackadder says:

          Rick,

          You mean the Rothbard link? I’m aware that Rothbard thought using Pareto efficiency implied anarchism. As on many other matters, Rothbard was wrong.

          • Rick Hull says:

            I read it rather that Rothbard rejected Pareto but still was happy to refute progressive theory on Pareto grounds.

  11. Quinton R. Newman says:

    Special rules apply to determine the tax years for which you are covered by an employer plan. These rules differ depending on whether the plan is a defined contribution plan or a defined benefit plan.

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