The truth about where Obamacare came from and where it's headed

by Kent Covington
Posted 11/18/14, 04:48 pm

The revelation of recordings of Obamacare architect Jonathan Gruber speaking with candor about the process used to pass the Affordable Care Act has sparked a series of denials from Democrats. At a press conference Sunday, President Barack Obama said he did not mislead the American people about the law. “The fact that some advisor who never worked on our staff expressed an opinion that I completely disagree with in terms of the voters is no reflection on the actual process that was run,” he said.

I spoke with Tom Miller of the American Enterprise Institute about the controversy. Miller is a former senior health economist for the Joint Economic Committee in Congress.

What was Gruber’s role in crafting Obamacare, and what do you make of the president’s dismissal of the controversy? Jon Gruber was a pretty key individual behind the scenes and later on above ground. … He had a rather extensive capacity to produce estimates as to the various effects of proposed legislation. He could tweak it and do things differently and find out what the results would be. His work was close enough to what the Congressional Budget Office … would produce that he was very valuable to the administration. He was a consultant on some well-paid contracts to do that type of work behind the scenes. He was in their meetings where initial strategy was being worked out and eventually legislative drafting occurred. … All that indicates that he was far from some distant, obscure economist who had very little to do with the way the law came about.

The president also said Gruber’s comments don’t reflect the reality of the process. Can the White House make a credible claim at this point that this was an honest and transparent process? To some extent, Gruber was unveiling what some people knew but wasn’t widely recognized. It’s a very artificial process by which laws are created in Congress and how they’re set to score to be budget neutral when they may not be.

When the law was passed, some states decided to set up their own state-run insurance exchanges. Other states opted not to do that. The way the law is written, there’s a rule that says only people who live in those states with state-run exchanges are eligible for subsidies in purchasing Obamacare. But the government has said, regardless of how it’s written, it will give subsidies to people in all 50 states. Because of that rule, the law is going back to the Supreme Court. What is each side arguing and what are the repercussions? The folks who are challenging the rule say that the law is pretty clear, and if you have a federal exchange you don’t get any tax credits. That has repercussions for the individual mandate, [making it] less binding. The employer mandate would be impossible to enforce in any of those states. The other side says it’s a very ambiguous law, let’s go by what they think they wanted to do even though they didn’t write it that way. It’s close enough for government work. … Two out of the three existing [court] decisions have gone in favor of the challengers. The fact that the Supreme Court took this up for an appeal in a hurry—relative to when it might have taken it up—indicates there’s a lot of serious thought to overturning it.

Some people have said that if the high court says the law has to be enforced as written, it would not be able to survive. Would you agree, or is that overstating it? It wouldn’t destroy the law; it would cause us to reconsider a number of items that are not workable. … You would have both sides have to come to the table and find a workable compromise and a different approach to perhaps providing some assistance to people for health insurance. … It would mean that Congress is going to have to take this up before they’d like to, and the states are going to have to consider whether they want to configure themselves as state exchanges, or say it’s not worth the trouble and we need to do something else in our local markets.

So if the Supreme Court says the rule must be enforced, things are going to get really interesting? There will be some panic attacks and some die hard postures for a couple of weeks in July, and then cooler heads are going to prevail and people are going to find out they can’t get everything they want on either side. Even though it’s hard to imagine Congress actually striking a compromise, out of necessity they will. … We need to rethink what’s going on in the law, in any case, and this opens up a window at a moment where you can’t afford to ignore it any longer and say, let’s wait until the next presidential election.