Jon Gruber on Obamacare, premium support and health policy dreams

at 01:33 PM ET, 05/21/2012

Jonathan Gruber has a dream.

Actually, he has a few of them. And, even for an M.I.T. economist, they
MIT health economist Jon Gruber has a few policy dreams. (Bloomberg)
get pretty wonky.

Gruber hopes for a not-too-distant future where Medicare and the health reform law enjoy the same status in the public’s mind. “My dream is of a world, 20 years from now, where someone says, ‘Keep the government’s hands off my ACA,’ ” said Gruber, a key architect of both Romneycare and Obamacare.

Mostly, though, the economist longs for the American public that is “steeped ... in the notion of the counterfactual.”

“I just cannot stress,” he says, “how important that is in your reporting.”

I’m with the Kaiser Family Foundation in Boston this week, learning about Massachusetts’ coverage expansion — alongside the state’s new effort to control health-care costs. Earlier this morning, I heard Gruber talk about pretty much everything from counterfactuals to premium support to Obamacare, and wanted to share some of his insights.

First, the counterfactuals: Gruber stresses that looking at the alternatives is crucial to any discussion of health-care costs. When we talk about slowing down the growth of health-care costs, we always need to be asking, “As compared to what?” Are we comparing against cost trends continuing to grow as they have in the past? How they would have grown under a different policy? Or if we’d done nothing at all?

Gruber, like most health-care economists, doesn’t think “nothing” is a viable option: Devoting one fifth of the economy to health care isn’t a thing he likes to see our country doing.

He cautions, however, against expecting dramatic results in the near term. Rather, Gruber thinks of high health-care costs like global warming: A problem that we’ve dug ourselves into pretty deep, over a number of decades, that offers no easy fix.

“We’ve got to bend the cost curve, and it’d be nice if it was sooner rather than later, but we don’t necessarily know the answers,” he says. “We just have to experiment and be patient. It took us a long time to get into this problem. It might take a long time to get out.”

One health policy idea he thinks could work, albeit in the future, would be a premium support model akin to Ryan-Wyden. Gruber imagines a future health-care system with something like “cradle to grave exchanges,” where all health insurance plans are purchased on a government-regulated marketplace.

“I think, ultimately, something like Ryan-Wyden is a good place to be, but not yet,” Gruber said. “In the long run, it’s a very good model. But right now we’re not good enough at risk adjustment and we have a plan that is working for seniors. Why rip that up and start over?”

Right now, though, the focus is squarely on the Affordable Care Act, and whether that law can ultimately be as successful as Romneycare has in Massachusetts. Over six years, that law has lowered the uninsurance rate to 2 percent while only increasing state spending by a little over 1 percent annually.

Gruber sees three big obstacles for the Affordable Care Act. Two are outside of the Obama administration’s control: the Supreme Court decision and the presidential election. But the White House does have a hand in the third factor: public outreach. Gruber thinks that a very aggressive public relations campaign is one of the reasons that Massachusetts got its uninsured population so low.

“Between the first and second inning of every Red Sox game, we were running this ad, with a guy with a broken arm saying, ‘It’s a good thing I have health insurance,’ Gruber recalled. “There was no one saying, ‘I’m going to get stuck with a $219 penalty if I don’t.’ ”

The looming question is how much that happens with the Affordable Care Act. There are some nonprofits, such as Enroll America, that are at work on these outreach issues. But with Obamacare polarizing voters in a way Romneycare never did — it passed easily through the state legislature — there’s room to believe that the national experience will be different.

“How will things work, in Mississippi, if the ad is a guy saying, ‘Stick it to the government and pay a $95 fine?’ ” Gruber said. “I don’t know, but I think it’s very important to change the social equilibrium around the word ‘mandate.’ ”

 
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