The Corner

Doubting Gruber

Jonathan Gruber has suggested on several occasions that people had to be misled about aspects of Obamacare to get it passed. Leaving aside the moral questions, are his political judgments correct? I’m not sure two of them are.

Gruber has said, for example, that Obamacare’s “Cadillac tax” on the most expensive employer-provided health-insurance plans is a way of scaling back the tax break for employer-provided insurance that avoids the political disadvantages of scaling it back explicitly: “It’s a very clever basic exploitation of the lack of economic understanding of the American voter.” Some analysts dispute the idea that these two policies are equivalent to each other. But as I said, I’m just talking about the politics. I am not at all sure that the Cadillac tax was received more favorably than a reduction in the tax break would have been. I suspect that had the administration gone with the second description, indeed, it would have been very slightly better off: that scaling back a tax break for expensive insurance sounds better than imposing a new tax on it.

Gruber has also suggested (as best as I can tell, and with the help of this interpretation of his remarks) that explicit subsidies for people with preexisting conditions would have been less popular than imposing regulations that cut premiums for those people while raising them for everyone else. I am not sure this is true, either. The regulation forcing insurers to treat sick and healthy people identically is one of the most popular features of Obamacare; but it is tied to one of the least popular features of Obamacare, its individual mandate. If it were possible to do a meaningful poll that asked people to choose between two packages — a ban on insurers’ treating sick people differently plus higher premiums plus the mandate (plus subsidies to help people comply with the mandate to pay those higher premiums) vs. subsidies for sick people but lower premiums and no mandate — I could easily see a plurality or majority of the public choosing the latter.

Ramesh Ponnuru is a senior editor for National Review, a columnist for Bloomberg Opinion, a visiting fellow at the American Enterprise Institute, and a senior fellow at the National Review Institute.


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