Gruber in 2010: Public Option Only About Paying Doctors Less, Government Insurance “Doesn’t Do That Good a Job” at Controlling Costs

The Ghost of Gruber Past continues to haunt the Democratic Party.

The Vast Write Wing has uncovered footage of Dr. Jonathan Gruber admitting the truth about another item on the liberal health care wish list: the public option. Proposed but subsequently rejected during the 2009/2010 Obamacare debate, the public option would have allowed the federal government to enter the law’s newly-created health care exchanges in the role of insurer. Modeled after Medicare, it was viewed by many opponents as a Trojan Horse for a single-payer, universal health care system controlled by Washington. Its proponents insisted, and continue to insist, that it would lower costs by eliminating the need for profits and reducing administrative expenditures in relation to private companies. A June article by Richard Kirsch at the even advocated for the return of the public option:

With the turn from “repeal” to various forms of “fix,” the ACA debate is finally at the same place as the other major federal programs that guarantee security to Americans: Social Security, Medicare and Medicaid. We don’t debate the existence of the programs, but we do argue about their shape and direction… It is not too early to start debating the best way to strengthen the ACA. Making Medicare an exchange option is a common-sense step that will control costs and improve access to the health of Americans. Its time will come.

Yet Gruber once again laid out the dirty secrets behind the happy facade, this time at a January 26, 2010 lecture at MIT (relevant portion at the 1:24:15 mark):

An audience member questioned the potential benefits of the public option, asking, “What are the possible cost-cutting measures that could be achieved through the public option in the long run? Could it be a tool to innovate… or can it only address the universal coverage issue?”

Gruber responded,

“… In terms of the actual substance of the public option, there’s two issues. One issue is the public option saves money by paying doctors less. And that’s what it’s about, okay? Basically, Medicare, which it would be based on, pays doctors about 30% less than private insurance. There was no innovation involved. In fact, Medicare pays doctors 30% percent less, but, in fact, the costs per person in Medicare are about the same as private insurance that covers the same population, which means they just don’t do that good a job at controlling costs actually beyond paying the doctors less. So, that’s the most substantive part. That’s the part which is politically difficult, and which got killed. The less substantive part is the notion that it would be a government insurer, and somehow that would magically do something good. And that was just crazy. That just made no sense. If we suddenly had a new insurer in the world, that’s not gonna make a whit of difference. The big issue is, did you have an insurer that could actually pay doctors less? And that would have made a difference. That would have saved about a hundred billion dollars over the next decade. But that just was politically proved to be too difficult.

The key points, as I see them:

  • Despite the many arguments on the left hailing the competitive benefits of the public option, Gruber freely admits that it is about one thing and one thing only: paying doctors less for their services.
  • He disputes the notion that a public option is more efficient, saying the cost per person under Medicare (the public option’s model) is about the same as the costs under private insurance, meaning that the government doesn’t “do that good a job at controlling costs actually beyond paying the doctors less.”
  • Just having a government-run choice in the exchanges won’t make a “whit of difference.” The only aspect of the public option that would contain costs is its ability to pay doctors less, which he estimates would save the government a hundred billion dollars over ten years.

Make no mistake, Gruber likes the idea of paying doctors less. He clearly states that he supports the public option in the video below (in which he also admits that it was, in fact, a hidden vehicle for a single-payer system):

It simply appears that, as opposed to the “cadillac tax,”  Gruber, Obama and the other devious minds who conceived of the Obamacare bill couldn’t figure out a way to make cutting doctors’ payments palatable to us “stupid American voters.”