Recently surfaced recordings of Dr. Jonathan Gruber, one of the architects of the Affordability Care Act, put us in a much better position to understand the effects of this legislation.
We can now understand many dynamics that were mysterious before and are better prepared to plan both as individuals and businesses for what will happen with regard to coverage and cost.
If you haven’t seen the news, Gruber’s comments included, “It’s a very clever, you know, basic exploitation of the lack of economic understanding of the American voter,” “Lack of transparency is a huge political advantage” and “Call it the stupidity of the American voter or whatever, but basically that was really, really critical to get the thing to pass.”
Gruber said that all of those in the know realized all along that the ACA would not “bend the cost curve,” but we had to be told that to gain support for the legislation. In other words, they knew that costs would increase dramatically, so we should plan for that going forward.
We also now know that any touted success of the Massachusetts state plan that had already been in place depended on tricking the federal government out of more than $400 million. So the true costs of that plan are now out in the open.
Perhaps the most damaging revelation, which the media has not really covered, is that there has been a “fox guarding the hen house dynamic” going on.
When the ACA was being crafted, the Congressional Budget Office would provide supposedly objective analysis of the effects of various features of the legislation. We now know that the office’s model essentially mirrored the model that Gruber created. Instead of providing an independent view, the office’s analysis favored what was in the legislation.
Eventually, reality catches up with poor forecasts. One of the early indications of an inaccurate forecast was that the office was finally forced to acknowledge that the Affordable Care Act would result in the loss of millions of jobs. Their current estimate is 2.5 million, but based on my observations locally, I expect it will be at least double that.
Out of the 100 or so students that I’m in touch with at any point in time, I know of 25 who had a full-time job but their employer has now forced them to 25 hours or less. These people are having a hard time providing for their housing on the lower income. Some have now taken two 25-hour jobs and are less well off than when they had one full-time job.
Why are the enrollment figures far below what Gruber and the federal government predicted — 14 million by 2014? Perhaps one indication is the typical conversation I’ve had with previously uninsured people who now have coverage through the exchange.
The good news is that they can now have insurance nearly for free. With the largest subsidy, someone may only be paying $20 per month for a policy that would normally be $400 per month. Surprisingly, those who were uninsured don’t see this as a good deal.
Here’s a refrain I’ve heard repeatedly in conversation: “I don’t get sick much, but if I needed health care, I got what I needed at the Robeson County Health Department and at the emergency room for free. Now, I have to pay $20 per month and I have a $1,000 — or $5,000 — deductible. So, unless I get really sick, I’m basically expected to pay the whole bill for what used to be free.”
I believe that everyone should have health insurance because we never know when we might “get really sick,” but it is hard to argue with this logic. Of course that system was broken because it depended on SRMC providing free care through the emergency room. Nonetheless, the provisions of the Affordable Care Act simply aren’t aligning with the decisions that Americans are making.
I’m glad we now understand the actual dynamics that went into crafting this legislation. I only wish Gruber and others had been more transparent at the time because the legislation could have been adjusted so that it wouldn’t be so damaging for the poor and for our country as a whole.
Eric Dent is a business professor at Fayetteville State University who lives in Lumberton.