Jonathan Gruber’s Day On The Stand

Published December 11, 2014

Consumer Power Report #448

Earlier this week, Jonathan Gruber testified before the House Oversight and Government Committee concerning his many statements, which have sparked political fury from the left and right, concerning the dishonest way Obamacare was constructed. He offered what I deem to be a very insincere apology for his remarks:

Jonathan Gruber, the Massachusetts Institute of Technology economist whose comments about the health law ignited a political furor, Tuesday apologized before members of Congress for “offending” comments he said were in some cases insulting and mean.

Mr. Gruber testified with Marilyn Tavenner, administrator of the Centers for Medicare and Medicaid Services, before the House Oversight and Government Committee on transparency and the Affordable Care Act. Republicans have criticized both for statements and information they say show a pattern of deception by the Obama administration in passage and rollout of the 2010 health law.

“I sincerely apologize both for conjecturing with a tone of expertise and for doing so in such a disparaging fashion,” Mr. Gruber said. “It is never appropriate to try to make oneself seem more important or smarter by demeaning others. I know better. I knew better. I am embarrassed, and I am sorry.”

Mr. Gruber, 49, touched off pitched criticism after a video surfaced from 2013 with comments he had made about the health law. Mr. Gruber said in the video that the health law passed because of the “huge political advantage” of the legislation’s lacking transparency. He also referred to the “stupidity of the American voter.” Mr. Gruber had earlier apologized for the remarks.

CMS head Marilyn Tavenner also testified concerning the botched enrollment figures. Phil Kerpen, president of American Commitment, was in the room for the whole thing, and he emailed these thoughts on the key moments:

A Harvard PhD, MIT full professor, infamous smartest-guy-in-the-room said over and over that he put people down to try to make himself appear smarter. Gruber claimed he misspoke without disavowing any of his substantive positions or admitting he lied. Gruber said today the mandate is not a tax – the tape of him saying otherwise was just a “glib conjecture” – even though he called it essentially a tax IN HIS TEXTBOOK. Gruber repeatedly refused to answer questions about how much taxpayers paid him, referring all such questions to counsel – suggesting it was perhaps much more than the reported $4 to $6 million – with the whole room in stunned disbelief.

This hearing made for an interesting sideshow and it was worth doing given the attention Gruber’s comments have received. But it is also a first step that needs to lead to further action. As Georgetown’s Randy Barnett noted in a USA Today oped, this Supreme Court is unlikely to rule to obey the letter of the law in the King v. Burwell case unless an alternate Plan B is put forward on Capitol Hill. The Court needs to know such a ruling will not create an impossible mess for Americans, with many states clamoring for relief or seeking ways to get the fed exchange deemed as technically state exchanges.

There’s one more reason Barnett left out: The insurance commissioners are going to be pushing hard for their states to essentially slap a “state” designation on the federal exchanges. That could happen really fast as a way to deal with this, and it’d be very bad for Republicans if a bunch of states start doing that, given that it would transform a current weakness of Obamacare into a strength, making repeal even harder. The pressure would be huge for such actions in states such as Ohio and New Jersey given what it would do to insurance markets if you’ve got unsubsidized exchanges in the short term. But establishing such an exchange also exposes states to taxes, so it will almost certainly be scored by grassroots groups as a tax-hiking action to ask HHS to run an Obamacare compliant “state in name only” exchange.

That’s one more reason to pass a replacement for Obamacare or propose one as early as February 2015. The Court and the American people need to understand that while there will be consequences for Jonathan Gruber’s malfeasance, there are alternative plans for health care reform that can clean up the mess Obamacare gave us.

— Benjamin Domenech



Along with the primary goal of expanding the availability of health insurance, the Affordable Care Act aims to make the use of Electronic Health Records (EHR) universal. This plan actually began with the 2009 stimulus (the American Recovery and Reinvestment Act), which included the Health Information Technology for Economic and Clinical Health (HITECH) Act. Doctors and other health providers have been offered incentives to convert patient information and health histories to a compatible and transferable electronic format, and as of June 2014, 75 percent of eligible doctors and 92 percent of eligible hospitals had received payments under the program.

This week, the Department of Health and Human Services (HHS) announced the release of the Federal Health IT Strategic Plan 2015–2020, which details the efforts of some 35 departments and agencies of the federal government and their roles in the plan to “advance the collection, sharing, and use of electronic health information to improve health care, individual and community health, and research.” …

Each step of the plan includes three-year and six-year goals, and the various goals, depending on their focus, require the involvement of department[s] and agencies as disparate as the Department of Defense, the Federal Trade Commission, and NASA, in addition to the expected participation of entities such as HHS, the Centers for Medicare and Medicaid Services, and the Indian Health Service. The report includes a comprehensive list of all departments and agencies involved.

SOURCE: Jeryl Bier, Weekly Standard


The public is right to dislike Obamacare. It has achieved, at great expense, an expansion of health-insurance coverage, but much of this coverage is of a very low quality. The most committed defenders of the law try to credit it with lowering the rate of growth in health-care spending. The attempt is risible: The trend toward lower inflation long predates Obamacare. The law has a poor cost-benefit ratio even before we consider all the coercion and disruption it has entailed.

For all Obamacare’s justified unpopularity, however, the political branches of the government are not going to repeal it so long as someone committed to it is in the Oval Office. It is not even going to be meaningfully reformed. What Republicans can and should do is to prepare the ground for the law’s repeal and replacement by increasing the likelihood that a president committed to a credible plan to achieve that goal will be elected in 2016 and have a congressional majority to support him.

Many Republicans – including most of the party’s senators – have been vague about how they would replace Obamacare. The party has reached a consensus on a few points, such as the idea that it should be possible for individuals to buy insurance across state lines. But these ideas would not by themselves do much to make insurance more affordable.

The Republicans who have refrained from setting forth their own plans have done so for many reasons, among them the desire to avoid creating a target for the other side. But the lack of a replacement plan, or of replacement plans, has had several harmful consequences for them. It has caused many voters, and not just those within the Democratic party’s liberal base, to worry that repealing Obamacare means taking away health insurance from millions of people now getting it through the law and means leaving people with preexisting health conditions facing the same problems they had before the law was passed. This fear probably helps explain a gap that polls have persistently found: More people oppose Obamacare than favor repeal. This fear induces a derivative fear among Republican politicians: It leads them to signal a lack of resolve to repeal the law, which in turn inspires anger and depression among conservatives.

SOURCE: Ramesh Ponnuru, National Review


Here’s a dirty little secret about recent attempts to fix ObamaCare. The “reforms,” approved by Senate and House leaders this summer and set to advance in the next Congress, adopt many of the Medicare payment reforms already in the Affordable Care Act. Both favor the consolidation of previously independent doctors into salaried roles inside larger institutions, usually tied to a central hospital, in effect ending independent medical practices.

Republicans must embrace a different vision to this forced reorganization of how medicine is practiced in America if they want to offer an alternative to ObamaCare. The law’s defenders view this consolidation as a necessary step to enable payment provisions that shift the financial risk of delivering medical care onto providers and away from government programs like Medicare. The law’s architects believe that doctors, to better bear financial risk, need to be part of larger, and presumably better-capitalized institutions. Indeed, the law has already gone a long way in achieving that outcome.

A recent Physicians Foundation survey of some 20,000 U.S. doctors found that 35% described themselves as independent, down from 49% in 2012 and 62% in 2008. Once independent doctors become the exception rather than the rule, the continued advance of the ObamaCare agenda will become virtually unstoppable.

Local competition between providers, who vie to contract with health plans, is largely eliminated by these consolidated health systems. Since all health care is local, the lack of competition will soon make it much harder to implement a market-based alternative to ObamaCare. The resulting medical monopolies will make more regulation the most obvious solution to the inevitable cost and quality problems.

A true legislative alternative to ObamaCare would support physician ownership of independent medical practices, and preserve local competition between doctors and choice for patients.

First, Congress should remove the pervasive biases in ObamaCare that favor hospital ownership of medical practices. Payment reforms that create incentives for the coordinated delivery of medical care (like Accountable Care Organizations and payment “bundles”) all turn on arrangements where a single institution owns the doctors. They’re biased against less centralized engagements where independent doctors enter into contractual relationships among themselves.

These ObamaCare payment reforms are fashioned after 1990s-style health maintenance organizations, or HMOs, in which entities like hospitals would get a lump sum of money from Medicare (or now, ObamaCare) for taking on the risk of caring for a large pool of patients. But right now all of these payment schemes are tilted far in favor of having hospitals pool that risk, and not looser networks of doctors.

SOURCE: Scott Gottlieb, Wall Street Journal


Two years ago General Dynamics, one of the biggest federal contractors, reported a quarterly loss of $2 billion. An “eye-watering” result, one analyst called it. Diminishing wars and plunging defense spending had slashed the weapons maker’s revenue and left some subsidiaries worth far less than it had paid for them. But the company was already pushing in a new direction.

Soon after Congress passed the landmark Affordable Care Act, the maker of submarines and tanks decided to expand its business related to health care. Its 2011 purchase of health-data firm Vangent instantly made it the largest contractor to Medicare and Medicaid, huge government health plans for seniors and the poor.

“They saw that their legacy defense market was going to be taking a hit,” said Sebastian Lagana, an analyst with Technology Business Research, a market research firm. “And they knew [the ACA] was going to inject funds into the health care market.”

They were right. In a way that is deeply changing Washington contracting, growth opportunities from the federal government have increasingly come not from war but from healing, an examination by Kaiser Health News and The Washington Post shows.

Politics are frozen. Budgets are tight. But business purchases by the Department of Health and Human Services have doubled to $21 billion annually in the last decade and are expected to continue rising.

HHS is now the No. 3 contracting agency, thanks to health-law spending combined with outlays for computer upgrades and Medicare’s drug program that grew during the administration of George W. Bush. HHS outranks NASA and the Department of Homeland Security in business deals and spends more than the departments of Justice, Transportation, Treasury and Agriculture combined, federal data show.

If health care is “the new oil,” as some investors hope, HHS is one of the richest fields – along with massive opportunities in health-related computer spending by the departments of Defense, Veterans Affairs and Treasury.

SOURCE: Kaiser Health News


Officials have cited the number of people who signed up for private insurance last year as a measure of the federal health law’s success. About 217,000 Illinoisans signed up, exceeding federal expectations, and about 7.1 million Americans enrolled during the law’s first open enrollment period. But about 63,000 Illinoisans enrolled in low-premium bronze plans, which last year had a median deductible of $5,600 in the state and for 2015 have a median deductible of $5,750. Plans in the other categories – silver, gold and platinum – cost more per month but have lower deductibles and better benefits.

Administrators at free and charitable health care clinics in the Chicago area say they are adapting to new challenges posed by those among the newly insured who need help paying for care. The challenges are expected to grow next year.

Premiums for the cheapest bronze plans in Illinois are increasing by an average of 11 percent in 2015, according to state data. In the Chicago area, that means a 40-year-old will choose among bronze plans that have an average premium of $243 and a median deductible of $5,000, lower than the state median.

Annette Kopczynski, 62, of Huntley, signed up last year for a $6,000-deductible bronze plan with Blue Cross Blue Shield of Illinois. After tax credits, her monthly premium is $38. She said she sees a nurse practitioner at a reduced cost at Family Health Partnership Clinic because she cannot afford care through her insurance. She and her husband, who is on disability, pay about $25 per month toward the costs that accrue, she said.

SOURCE: Wes Venteicher, Chicago Tribune


We have a family friend whose daughter was airlifted to the hospital after a vaccine-induced seizure, so when this topic comes up around her I try to go light, but my basic position is that, yes, that can happen, but, again, compare that possibility against the bigger one of your child getting super-polio or whooping cough. I’ll take the vaccines, thanks. Our friend’s daughter’s ordeal was traumatic, but she lived. Another thing parents do not take into account is that they do all sorts of things with their children that have far greater risks of injury and death than vaccinations. Take driving the kids around in a car. Car crashes are the leading cause of death for children ages 2–14. Yet there are no campaigns to “Stop driving your kids to death!” or anything even remotely related. Despite our increasing culture of parent alarmism and ineffective hyperprotection, no one questions automobiles and their clear and present danger to human life. If the vaccine-frightened truly care so much about the real but tiny risk of vaccine side-effects, consistency demands that they also stop driving cars, sending their children to school, hiring babysitters, and all other activities with higher risks.

I also think parents have an ethical duty to vaccinate to provide the herd immunity people too weak for vaccinations desperately need. If an elderly person or child with leukemia gets measles, it’s deadly.

When the topic comes up among my mommy friends, I provide the information that helped change my mind and try to tread carefully, but ultimately advocate for vaccination. One of our friends doesn’t do the hepatitis B shots because she lives in a rural area and her child will not be attending daycare and will probably homeschool. Hep B is a group sort of disease, and typically not deadly with treatment. Fine. I’m way more pushy about shots like MMR, whooping cough, polio, and other deadly possible contagions. I always think that if my baby were to get a disease like this before his scheduled vaccination for it because of ill-informed people, I would be horrifically angry at them. You can be as stupid as you want with yourself, but if your stupidity threatens my child’s life, I will hunt you down. (Of course, this is hyperbole, but I do feel this way inside.)

I also view it as horrifically irresponsible for celebrities to get on the anti-vaccine train. The anti-vaccine movement is essentially based on fear, not evidence. Every parent should read the evidence before making a decision that is more likely to hurt his child and others rather than protect lives.

SOURCE: Joy Pullmann, The Federalist