Gruber Video Six: We Secretly Got Rid of Tax Exemption for ALL Employer-Sponsored Health Plans
This gets the flaming skull from Ace, so you know it’s big. Jake Tapper:
In a 2011 conversation about the Affordable Care Act, MIT economist Jonathan Gruber, one of the architects of the law more commonly known as Obamacare, talked about how the bill would get rid of all tax credits for employer-based health insurance through “mislabeling” what the tax is and who it would hit.
. . . .
“It turns out politically it’s really hard to get rid of,” Gruber said. “And the only way we could get rid of it was first by mislabeling it, calling it a tax on insurance plans rather than a tax on people when we all know it’s a tax on people who hold those insurance plans.”
(The White House press secretary said at a press briefing in 2010: “I would disagree with your notion that it is a tax on an individual since the proposal is written as a tax on an insurance company that offers a plan.”)
It’s lovely to see how coordinated this deception was. Hey, has anyone asked Robert Gibbs about this? (He’s the unnamed White House Press Secretary repeating that deliberately deceptive line.)
The second way was have the tax kick in “late, starting in 2018. But by starting it late, we were able to tie the cap for Cadillac Tax to CPI, not medical inflation,” Gruber said. CPI is the consumer price index, which is lower than medical inflation.
Gruber explains that by drafting the bill this way, they were able to pass something that would initially only impact some employer plans though it would eventually hit almost every employer plan.
I have to say, I am against the tax credit for employer=sponsored plans — and Gruber is right to say that economists of all stripes oppose it because of the distortions in the marketplace. Nevertheless, the monstrosity he helped perpetrate is the mother of all distortions in the marketplace, so he doesn’t really get a lot of free market points here. (I award you no free market points . . . and may God have mercy on your soul.)
So this video is just more lies from this schlub — who, by the way, got a lot more money than that almost $400,000 he got from the Obama administration. Wait until you see how he cashed in from the Democrat-led states as well:
Individual states have lavished taxpayer cash on Mr. Gruber in return for cookie-cutter reports that describe the impact of Obamacare for each of the several states.
Minnesota, for example, used federal Obamacare grants to pay Mr. Gruber to attend one meeting, participate in a biweekly email list and print a copy of the report, all for $329,000. Wisconsin paid Mr. Gruber $400,000 for the same material, requested by the office of then-Gov. Jim Doyle, a Democrat. When the report was presented, Gov. Scott Walker, a Republican, didn’t want Mr. Gruber at the news conference. Vermont is paying him another $400,000. Such a deal!
West Virginia, Maine, Colorado and Oregon have partaken of Mr. Gruber’s services, too, guaranteeing him a tidy sum. The money bought lies and deception. That’s Mr. Gruber’s characterization, not ours. “If you had a law which made it explicit that healthy people are going to pay in and sick people get money,” said Mr. Gruber, “it would not have passed.”
What was that I heard about Congressional hearings?
Ding.
Patterico (9c670f) — 11/15/2014 @ 12:43 pmEven a fish wouldn’t get caught if he’d keep his mouth shut.
ropelight (786712) — 11/15/2014 @ 1:03 pmSchlub? Well you learn something every day. Dictionary.com defines this as: zhlob. So there you go.
Regret (d93be7) — 11/15/2014 @ 1:03 pmN.E. elite republicans have to hate this gruber guy, now they have to go to work.
mg (31009b) — 11/15/2014 @ 1:54 pmHow about tort reform this time?
Were screwed leaving this up to johnny and his tears.
How about Issa gets on this f-up as well? Might as well punt on first down.
In the formative years of this country he would have been horse-whipped by a Senator
steveg (794291) — 11/15/2014 @ 2:03 pmOh
steveg (794291) — 11/15/2014 @ 2:06 pmGruber looks kinda like an older Pajama Boy
obamacare profiteer jonathan gruber built his ill-gotten fortune on lies and deceit
he’s not a good person
happyfeet (831175) — 11/15/2014 @ 2:45 pmI would go further and eliminate all employer sponsored plans, including public-employee and union plans. Instead, I would have one pool of insurance, where each family chose a plan from the (lowercase-m) marketplace. Employers would be free to cover the cost, as taxable income, and there would be a basic medical insurance tax credit, set at the average market cost of a government defined basic plan.
National plans would be available. There would be no exclusions and each policy would be price solely by age and home market, much as large-pool corporate plans are now. You have to add locality to pricing, otherwise you have cross-regional subsidies. You might also allow pricing to include a loyalty factor, in part to prevent company hopping for marginal savings.
This way insurance is separate from employment, fully portable, and priced to what the CONSUMER needs, while eliminating some of the real problems the old system had and avoiding most of the bureaucracy of Obamacare.
Kevin M (d91a9f) — 11/15/2014 @ 2:59 pmCue Icy.
Kevin M (d91a9f) — 11/15/2014 @ 3:08 pmI admit *this* little Gruber bon-mot is news to me. I didn’t think thru the fact that by tying the ‘Cadillac’ status to plain CPI they were stealthily f**king us all out of our employer plans. Damn this crap is worse than even I thought.
I don’t mind employers offering plans – they do have some strength to negotiate after all, and it is a way for them to in effect compete for workers. (Disclosure: yes, of course, I’m a recipient of one.) But I do acknowledge that having a big part of the premium ‘covered’ by the employer and the remainder come out of my check pre-tax (I guess the part they pay they get to call a business expense, so it does reduce their corporate taxes as well?) does distort the market because the ‘real’ premium cost is transparent to me. When I’m shopping for plans annually, I only really care about my contribution. And the self-employed or part-timers don’t get the same pre-tax break on paying their premiums (plus, without the bargaining power of an employer their premiums are higher).
If they’d totally level the playing field, either by making the employer contribution part of taxable compensation, and making everyone’s own contribution toward their plans (including the self-employed, who have to pay for it all and at higher rates) pre-tax or some sort of write-off, that would at least reduce the market distortion although perhaps not eliminate it entirely. If I know I’m being taxed on how much the employer is paying on my behalf as if it’s income…well of course I’m also going to shop around for the lower premium there too unless I’m in a health situation where I ‘need’ the premium coverage, because it was ‘income’ I didn’t get to spend, but I darn sure see the taxes deducted.
All that said, our company has been pushing the heck out of the ‘high deductible’ type plan the last 4 years, even before (cough-bulls***–>)”A”CA kicked in. Premium is about a quarter of the more typical HMO or PPO plan, deductible is higher ($3750 a year for self/spouse vs. like $1500), BUT the company contributes a bit over a grand a year into an HSA, I can contribute more, and the maximum annual out-of-pocket is actually LESS than the PPO plan. I finally switched last year (failed to convince the wife the preceding year, finally went all spreadsheet on her ;-D ) and to hedge my bets put another grand over the year into the HSA (combined per paycheck premium and extra HSA amount was still far below the other plan premium alone) since the ‘downside’ of a plan like that is early in the first year of enrollment before your HSA has much in it…you’re sort of on your own.
In the end over 2014 we ‘consumed’ all of about $280 total thru the year, meaning I have like $1700 in the account already toward next year (remember, deductible is $3750 and employer puts another $1k+ in for me thru the following year). To my way of thinking, THAT is a good plan concept, and the way reforms should have been modeled. If I were much younger (e.g. typical mid-20s to early-30’s “invincible” not planning a baby or something) after a few years like that you have in effect a medical 401k with $6 – 10k stocked up…more than enough to cover the $3k or so annual deductible if you really needed significant care before the 80% insurance kicks in. As it is, not being that young, I’ve still got another decade to work…assuming we stay pretty healthy in general I could easily see retiring with a $15-20k HSA which I can then start using to pay my own insurance the first few years…and if some serious emergency really arises the $6k max out of pocket for a year doesn’t wipe me out, either.
Insurance is supposed to be exactly that, *insurance* not some bulls**t pre-payed health plan that costs an arm and a leg just for the premium because yay, you get these 2 or 3 ‘free’ annual visits (assuming you can find someone who’ll see you), and still pay out the arse if anything serious happens because the deductible and max OOP are way the heck up there as they seem to be on all the gub-mint metallic plans. That just makes NO sense and never did. I fail to understand how an ‘MIT economist’ can even pretend the way they crafted the law made any financial sense at all for the individual user. Oh, that’s right, they didn’t care…it wasn’t ever about helping the individual, either those with or without insurance…was it?
rtrski (2e2489) — 11/15/2014 @ 4:52 pmI’ve never read Gruber’s CV, but it is difficult to believe he has any demonstrable experience in gaming the political system. When it came to structuring the ACA to overcome political objections, he was but a scribe taking orders (note the credulous language: ““It turns out politically it’s really hard to get rid of.” Well, duh?). Mr. Gruber is about as culpable as those rogue IRS agents in Cincinnati, though apparently a bit better paid. After six years of top-down manipulation, “coordinated” is not the word you are looking for. How about “orchestrated”?
Do you know if there is any truth to the rumor that Jonathan Gruber and Matt Taylor were roommates in college?
ThOR (130453) — 11/15/2014 @ 5:13 pmInsurance is supposed to be exactly that, *insurance* not some bulls**t pre-payed health plan that costs an arm and a leg just for the premium
But that is what unions demanded and companies outbid each other with.
Kevin M (d91a9f) — 11/15/2014 @ 6:49 pmThe problem with catastrophic plans is the insurance companies STILL want to control the first dollar. So they combine restrictions on vendors (which helps them) with limits on charges (which helps both) to keep the day that they have to pay for everything as far away as possible, and to avoid obvious fraud.
Kevin M (d91a9f) — 11/15/2014 @ 6:54 pmStill no recent mention in the LA Times of Jonathan Gruber. He’s probably a non-person by now.
Kevin M (d91a9f) — 11/15/2014 @ 7:00 pmoh please, this is all going to lead to “nothing to see here, just move along”.
The SupremeCourt is not going to care – this group is not going to have a problem with
Congress allowing themselves to be gamed. Congress is allowed to set its own rules and
the Court is not going to intervene in how those rules are manipulated.
Congressional hearings? Fat chance they will accomplish anything. Did Gruber do
anything that he could be fined or jailed for? He can go up there and say “Yeah I did it,
what are you going to do about it?”
And the GOP hierarchy will do absolutely nothing.
Maybe this will provide incentive to TeaParty types and the various Libertarian types
seeRpea (b08b27) — 11/15/2014 @ 7:07 pmto get a national political party going. But that is about all what this hub-bub will do.
Ref #11
ThOR (130453) — 11/15/2014 @ 5:13 pm
“… Mr. Gruber is about as culpable as those rogue IRS agents in Cincinnati, though apparently a bit better paid. …”
= = = = = = =
Weeelllll – – – I understand *HE* is the one who knew how the CBO scores bills – he’s the one who “tweaked” whatever needed tweaking to keep the bloated monstrosity from coming in at over a Trillion(!!!) dollars.
As far as I’m concerned, he’s another candidate for the “lamppost and rope” solution.
A_Nonny_Mouse (1fa585) — 11/15/2014 @ 8:16 pmHe’s an ECONOMIST. So naturally he was hired to LIE ABOUT FIGURES. He LIED about what this would do ECONOMICALLY. This guy is a typical LIBTARD. And…he has a LISP.
Gus (7cc192) — 11/15/2014 @ 10:23 pmDisraeli said there are three kinds of lies: Lies, damn lies, and statistics.
Gruber used them all.
Kevin M (d91a9f) — 11/15/2014 @ 11:58 pmRe: Kevin M, 12&13…the plan I’m describing is a high-deductible plan with an integrated HSA, similar but not quite just a ‘catastrophic’ plan. I think of a catastrophic plan as one that covers zilch unless you hit an out of pocket max per year, kind of a stop-loss only or umbrella coverage plan for a homeowner. This plan has a deductible at half the OOP max; once you hit the deductible it starts insuring at 80% (70% out of network), then of course once you hit OOP max everything is 100%. And it has drug benefits (very generous, my wife’s cholesterol meds run her about $1.50 for a 90 day supply), the “A”CA required one wellness visit, blah blah blah.
Basically I had a choice between a plan that would cost me about $4500 for my contribution to the premium but cover ‘just about everything’ at 90% aside from copays and the like, vs. this plan at $1200 for my contribution to the premium, company pays just over $1k into the HSA as part of the plan. So even contributing another grand into the HSA a year as a safety measure it still cut my *required* paycheck outlays significantly.
You’re definitely right about them wanting to control vendors … there is still a difference between ‘in-network’ and ‘out-of-network’ coinsurance rates and deductibles. So in that sense, the system is still pretty phucked up. Anyway, as long as I stay ‘reasonably’ healthy this plan seems to be both keeping my premium down (so maybe I get to keep it for a while as the Gruberification of employer plans continues to select against them) and in letting me stockpile some money into the HSA as a medical 401k equivalent. So I’m happy in that regard. Now if I can just keep a doctor…more than one in the practice we presently go to has strongly hinted they’re looking at just getting out of dodge, sooner rather than later.
rtrski (2e2489) — 11/16/2014 @ 6:37 amI am for the tax exemption on employer-sponsored plans. I’m also for the tax-exemption of income used to purchase private plans, treating money spent on insurance as pre-tax dollars, with no FICA tax, just like employers get.
Distortion – poof. Employers can offer plans as a lure, but they don’t have to. Instead of a mandate, insurance purchase has a tax carrot for individuals.
Tax exempt HSAs for routine care also make sense.
Don’t tax medical care, medical products, drugs, or medical insurance.
SarahW (267b14) — 11/16/2014 @ 2:53 pmIn this way the government is out of the insurance business except for care of the destitute and the elderly. And their price negotiations should never be permitted to be directly tied to what providers charge others, be they insured or self-pay. The biggest distortion in the health care market is the government forcing a discount from rates charged to self-pay or insured consumers.
Physicians should be free to work for anyone for any price, and the government can negotiate its own fees without reference to any other charging practice.
SarahW (267b14) — 11/16/2014 @ 2:57 pmIncome used to buy insurance or pay medically necessary services should not be taxed. If you provide for yourself, the government doesn’t have to mess with you, think about you, control you, decide for you. So the reward for reducing the need for more government is less tax.
SarahW (267b14) — 11/16/2014 @ 3:05 pm18. Kevin M (d91a9f) — 11/15/2014 @ 11:58 pm
There’s an even worse kind of lie:
Scientific “proof”
Exp. Global warming, or at least the idea that cutting back on carbon emisisons could do anything about it.
Sammy Finkelman (ae0b12) — 11/16/2014 @ 10:34 pmgrubering is a full time thing:
http://www.powerlineblog.com/archives/2014/11/contradicting-diane-feinsteins-sham-report-on-cia-interrogation.php
narciso (ee1f88) — 11/17/2014 @ 5:48 am