The CBO Effectively Used Gruber’s Model to Score Obamacare

Obamacare by from The Weekly Standard, November 16, 2014

Two well-placed sources on Capitol Hill say that the Congressional Budget Office effectively used Jonathan Gruber’s model to score Obamacare.  That model favors government mandates over market competition and claims that essentially the only way to achieve a large reduction in the number of uninsured Americans is to impose an Obamacare-like individual mandate.  Moreover, because the model that the CBO used in scoring Obamacare is the same one it uses today, any alternative to Obamacare that doesn’t include an individual mandate — which is to say, any conservative alternative — would be scored by the CBO as falling well short, in terms of coverage numbers, of Gruber’s preferred legislation.

While the CBO’s model isn’t exactly the same as Gruber’s, one well-placed congressional source says that the two models are “eerily similar.”  That source adds that, not only was Gruber one of the CBO’s academic advisors at the time that Obamacare was scored — a claim echoed by the Huffington Post — but two of Gruber’s graduate student protégés worked on the scoring.

Gruber himself describes his model and the CBO’s as being “very similar.”  In early 2011, he wrote:

“CBO and I both estimate [the] that Affordable Care Act will cover about 60 percent of those who would be uninsured absent the law. We both find that there would be a very modest reduction of employer-sponsored insurance, that premiums in the nongroup insurance market for the same quality product would fall, and that there would not be much effect on premiums in the employer-provided insurance market.”

For the record, before Obamacare passed, the CBO predicted that the president’s signature legislation would have led to 19 million more people having health insurance by 2014 (see Table 4).  In reality, Obamacare has maybe hit half that number — and many if not most of Obamacare’s newly insured have simply been dumped into Medicaid.

While failing to disclose it at the time, the Obama administration paid Gruber almost $400,000 in taxpayers’ money because, in the Department of Health and Human Services’ words, he had “developed a proprietary statistically sophisticated micro-simulation model” to which the Obama administration wanted access.  Noting how “similar” Gruber’s model is to the CBO’s, the Washington Post’s Glenn Kessler writes that, with access to Gruber’s model, the Obama administration “could predict with reasonable certainty how CBO would score legislation.”  Kessler adds, “Given that legislation in Washington often falls or rises depending on the CBO score, that made this model a very powerful tool for administration officials.”

Given the importance of Gruber’s role, why wasn’t it made more transparent?  Well, as Gruber might say — and has said — “lack of transparency is a huge political advantage,” especially given “the stupidity of the American voter.”

Gruber had influence over the CBO, the White House, and Congress alike.  Indeed, it seems that it might be hard to overestimate his importance; his role was central to the efforts of President Obama and his Democratic allies to shove Obamacare down an unwilling citizenry’s throat.

Jane Hamsher called attention to Gruber’s singular role just days before the House’s fateful vote on Obamacare.  In a piece published by the Huffington Post on March 18, 2010 — three days before Paul Ryan’s rousing and timeless speech on the House floor and the vote to follow — Hamsher highlighted that “the White House, the Senate, the DNC and other Democratic leaders…distributed Gruber’s work and cited it as independent validation of their proposals, orchestrating the appearance of broad consensus when in fact it was all part of the same effort.”  Moreover, “Gruber’s work was not that of an independent analyst but rather work performed as a contractor to the White House and paid for by taxpayers.”

Hamsher’s piece is worth quoting at length, for it shows that Gruber had his fingers all over Obamacare, even as the Obama administration did its best to wipe away the prints.

She writes:

How did the feedback loop work? Well, take Gruber’s appearance before the Senate HELP Committee on November 2, 2009, for which he used his microsimulation model to make calculations about small business insurance coverage. On the same day, Gruber released an analysis of the House health care bill, which he sent to Ezra Klein of the Washington Post. Ezra published an excerpt.

White House blogger Jesse Lee then promoted both Gruber’s Senate testimony and Ezra Klein’s article on the White House blog. ‘We thought it would all be a little more open and transparent if we went ahead and published what our focus will be for the day’ he said, pointing to Gruber’s ‘objective analysis.’ The ‘transparent’ part apparently stopped when everyone got to Gruber’s contractual relationship to the White House, which nobody…bothered to disclose.

Two days [after the Senate bill was unveiled], Gruber published a paper entitled ‘Impacts of the Senate High Cost Insurance Excise Tax on Wages: Updated,’ claiming that the excise tax would result in wage hikes of $234 billion from 2013 through 2019….

The next day on [November] 21st, Ron Brownstein wrote in the Atlantic about Gruber’s effusive praise for the cost-cutting measures in the bill:…‘You couldn’t have done better than they are doing,’ says Gruber.  [Brownstein also wrote that Gruber told him, “I’m sort of a known skeptic on this stuff.”]

On Monday the 23rd, the DNC was sending the Brownstein column around in its entirety…one of 71 emails they would send touting Gruber’s work….

David Brooks of the New York Times was not convinced that the Senate bill would be deficit neutral, so Peter Orszag pointed him to…Brownstein’s ‘insightful article on health care costs’….

Paul Krugman cited Gruber’s glowing analysis in the Brownstein article – ‘this is the best effort anyone has made’ — as one of the reasons he supported the Senate bill….Jeff Bingaman mentioned the Krugman piece on the floor of the Senate, and entered it into the Congressional Record….

On November 27, following the release of the CBO score, Gruber issued another report saying the Senate bill would reduce non-group premiums (Gruber is one of the CBO’s academic advisors)….

The next day… [Politico’s] Mike Allen [wrote a piece] with the headline ‘MIT analysis backs Obama health plan,’ leading readers to believe that Gruber’s work represented outside confirmation. The DNC didn’t flinch at that description, sending around an email on the 29th with the subject line: ‘MIT Analysis backs Obama Health Plan’….

On the 29th Nancy-Ann DeParle, head of the very White House Office of Health Reform that Gruber was hired to consult for, posted perhaps the most misleading column of all on the White House blog….

She identified Gruber as an ‘MIT Economist who has been closely following the health insurance reform process’ who had ‘issued a compelling new report.’…

On November 30th…Harry Reid took to the floor of the Senate…, saying ‘just a few days ago an MIT economist — one of the nation’s foremost economists — a man by the name of Jonathan Gruber, analyzed our bill and concluded it will help Americans pay less and get more.’

…Nancy Pelosi touted ‘the Gruber analysis’ on the Speaker’s website.

On December 3, Kathleen Sebelius released a statement…[and] substantiated [her] claims…by citing Gruber’s November 3 testimony before the HELP Committee….No mention that he was a contractor to HHS….

On December 28, Gruber published an Op-Ed in the Washington Post — in which he neglected to mention his contract to consult with the White House on this very issue. He was asked point-blank if he had any contracts related to the piece for which he was being paid, and he said ‘no.’

In other words, an overwhelming number of the ostensibly independent statements or scores that were made or published in support of Obamacare —from Krugman, Klein, Brownstein, the DNC, Reid, Pelosi, Sebelius, and even, to a significant degree, the CBO itself — were traceable to the support of one man and his model.  And that man was Jonathan Gruber, who was secretly under contract with the Obama administration.

Perhaps it’s time to repeal Obamacare and replace it with a winning conservative alternative that would lower costs, secure liberty, and make it possible for any American who wants to buy health insurance to be able to do so.  And perhaps it’s time to make sure that Jonathan Gruber’s influence over the CBO’s scoring of Obamacare, and of Obamacare alternatives, doesn’t extend into the next Congress.

© 2014 Weekly Standard LLC. Reprinted with permission.