While President Obama campaigned on a promise that his universal health care plan would lower premiums, his controversial adviser and plan architect was privately warning the state of Wisconsin that Obamacare was poised to massively increase insurance costs for average residents, internal documents show.
Jonathan Gruber, the MIT economist currently under fire for suggesting the Obama administration tried to deceive the public about the Affordable Care Act, was hired by former Democratic Wisconsin Gov. Jim Doyle in 2010 to conduct an analysis on how the federal health-care reform would impact the state.
Mr. Gruber’s study predicted about 90 percent of individuals without employer-sponsored or public insurance would see their premiums spike by an average of 41 percent. Once tax subsidies were factored in, about 60 percent of those in the individual market were projected to see their premiums go up 31 percent, according to his analysis.
In addition, 53 percent of those insured by companies with fewer than 50 employees, would see their premiums rise by an average of 15 percent even after subsidies, Mr. Gruber forecasted. The report warned such increases could impact small companies’ decision whether to provide health insurance to their workers.
“There remains some uncertainty about employer reactions given the many forces which might impact their decision to offer insurance,” the report said.
The contrast between the Obama administration’s optimistic rhetoric on Obamacare and Mr. Gruber’s private warnings to Wisconsin is certain to attract new attention from the Republican-led Congress, which wants to know whether there was an effort by the administration to deceive the public about the true consequences of the law as Mr. Gruber suggested in a videotape that surfaced recently.
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Mr. Gruber and the White House declined comment when contacted by The Washington Times this week.
The Gruber study, which was released publicly in August 2011 with little fanfare in the state of Wisconsin, was largely ignored by Mr. Obama, who campaigned in 2012 that insurance premiums would actually decrease under his healthcare legislation.
“So when you hear about the Affordable Care Act — Obamacare — and I don’t mind the name because I really do care. That’s why we passed it,” the president declared in a campaign speech in Cincinnati, Ohio back in July 2012, “you should know that once we have fully implemented, you’re going to be able to buy insurance through a pool so that you can get the same good rates as a group that if you’re an employee at a big company you can get right now — which means your premiums will go down.”
In Wisconsin, Republican Gov. Scott Walker, considered by many to be a potential 2016 presidential candidate, distrusted the campaign promises, largely because of the work Mr. Gruber had done for the state’s previous administration, and has long advocated for repealing the law.
In addition to premium rate increases, Mr. Gruber’s work estimated that 100,000 Wisconsinites would be involuntarily dropped from their employer sponsored health insurance also running counter to the President’s claim at the time that if a you liked their health-care policy, you could keep it.
The study did project the implementation of Obamacare would decrease the state’s number of uninsured by 65 percent by 2016, but doing so would come at the expense of other groups.
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Wisconsin’s working-class families would be forced to pay a hidden tax to pay for the purchase of health insurance for a family of four earning up to $89,400, the study said. It also showed Obamacare would shrink the numbers of people in the private insurance marketplace from 180,000 individuals to 30,000.
Mr. Walker has said he would like to see the Affordable Care Act repealed and after entering office in January 2011, he opted not to create a state-run marketplace and to instead rely on the federal one. Mr. Walker also has refused Obamacare’s Medicaid expansion, refusing to accept federal aid offered under the Affordable Care Act, arguing he doesn’t trust the federal government’s pledge to cover the cost.
After entering office, Mr. Walker replaced Mr. Doyle’s Office of Health Care Reform which had been created to carry out the federal Affordable Care Act with Wisconsin’s Office of Free Market Health Care. It was that office that inherited Mr. Gruber’s study.
The state of Wisconsin paid $443,718 to conduct the analysis with $200,000 going to Mr. Gruber himself, and the rest of the costs dedicated to Gorman Actuarial, a Massachusetts-based consultancy.
Mr. Gruber developed the model for the report that outlined the federal Affordable Care Act’s impact on Wisconsin, and his contract ended June 30, 2011, according to Mr. Walker’s office.
“Health care reform was supposed to provide affordable health care for Americans but major concerns have been demonstrated by the results of this study,” said Dennis Smith, Wisconsin’s Health Services Secretary, in a press release when the report was released in August 2011.
That year, Wisconsin had 33 health insurers actively participating in the individual market and 25 insurers in the small group market, a dynamic Mr. Walker’s administration thought competitive and cost effective. The Badger State’s uninsured rate is also better than the national average, with 9 percent of its population lacking insurance in 2013, compared with 14.5 percent nationally, according to U.S. Census Bureau estimations.
Because Mr. Gruber’s contract was entered into under a previous administration and the vast majority of the work was performed for that administration, Mr. Walker declined to comment on Mr. Gruber’s work for the state.
In 2011, Mr. Gruber defended his Wisconsin study to The Cap Times, a Wisconsin-based news site.
“They picked out the most negative aspects of the report to highlight,” Mr. Gruber told the Cap Times in an interview in August 2011. “Overall I think health care reform is a great thing for Wisconsin.”
Meanwhile, earlier this month, videotapes were leaked from a University of Pennsylvania speech Mr. Gruber gave last year where he refers to the “stupidity of the American voter” as to how Obamacare got passed legislatively, saying the lack of transparency of the bill was a “huge political advantage.”
Mr. Gruber received about $400,000 from the U.S. Department of Health and Human Services for his work focusing on health care computer models. He has also been a frequent guest at the White House, meeting with senior officials more than a dozen times and the president himself, once, visitor logs show.
White House Press Secretary Josh Earnest said this month that Mr. Gruber only advised the administration on the economics of health care.
“He certainly is somebody who is well-versed in understanding how economics will have an impact on health care policy, but it’s pretty evident from these videos that he doesn’t have nearly as much insight as it relates to politics or communications or legislative strategy,” Mr. Earnest said of Mr. Gruber.
A Kaiser Family Foundation analysis of 2015 premium changes as of November show that nationally the lowest cost bronze plans and lowest cost silver plans will increase two and four percent, respectively, with premiums rising as much as 43 percent in Minnesota counties and decreasing as much as 45 percent in Colorado.
In Wisconsin, the analysis found the premiums for the bronze and silver plans in Milwaukee increased by at least 5 percent, less than one percent after tax credits are applied.
• Kelly Riddell can be reached at kriddell@washingtontimes.com.
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