Obamacare Architect Jonathan Gruber: "Obamacare Is Not Imploding," "Working As Designed"

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MIT professor Jonathan Gruber, a well-known architect of President Obama's Affordable Care Act, tells CNN that the law known as 'Obamacare' is working exactly as intended.

Full transcript, via CNN:

JONATHAN GRUBER: Obamacare's not imploding. The main goal of Obamacare was two-fold. One was to cover the uninsured, of which we’ve covered 20 million, the largest expansion in American history. The other was to fix broken insurance markets where insurers could deny people insurance just because they were sick or they had been sick. Those have been fixed, and for the vast majority of Americans, costs in those markets have come down, thanks to the subsidies made available under Obamacare...

The 22% increase [in health care premiums], let’s remember who that applies to. That applies to a very small fraction of people, who have to buy insurance without the subsidies that are available.

85% of people buying insurance on the exchanges get subsidies. And for those people, this premium increase doesn’t affect them.

Now, for those remaining people, that is a problem, and that’s something that we need to address, but it’s not a crisis. It doesn’t mean the system’s collapsing. And most importantly, it doesn’t affect the 150 million Americans who get employer insurance, who have actually seen their premiums fall dramatically, relative to what was expected before Obamacare.

CAROL COSTELLO, CNN: OK. So let's talk about how exactly you can fix Obamacare. And I just need you to be specific, because I think people really want answers. So Hillary Clinton says she can fix Obamacare. So what would be one fix that would drive premiums down.

GRUBER: Look, once again, there's no sense of oh it just has to be fixed. The law is working as designed; however, it could work better, and I think probably the most important thing experts would agree on is that we need a larger mandate penalty. We have individuals who are essentially free riding on the system. They're essentially waiting until they get sick and then getting health insurance. The whole idea of this plan which was pioneered in Massachusetts was that the individual mandate penalty would bring those people into the system and have them participate. The penalty right now is probably too low and that's something ideally we would fix.

COSTELLO: So somebody who is president could go to congress and say, "You know what, lawmakers, this is a fix. Can you pass this?" Is that what would have to happen to put that fix into place?

GRUBER: Basically, it's hard to know what dramatic fix we could do without congress participating in the process. We could do things like a stronger mandate is one. We could do things like increasing the pressure on states to expand their Medicade programs, a horrible act of political malpractice where states have left millions of people of their lowest income citizens uncovered. We could do things like that, but a lot of that would involve congressional participation. It's hard to know what you can do just on your own as a new administration.

COSTELLO: What about the insurers who have fled the system? How do you convince them to come back or new companies to sign on? GRUBER: Once again, I think the press here has been misleading. Some insurers are leaving. Other insurers are thriving. I think what you have is a system where we've shaken up the status quo, exactly what we expect of new innovation, disruptive innovation if you will, to do. Insurers who were thriving in the old system are finding this new system sort of hard for them. Other insurers are doing really well and what's going to happen is the natural process as the market evolves. These premiums are going to increase. That's going to allow profitable opportunities for new insurers to enter they are(ph) and bring premiums back down. So we're just seeing the ups and downs of a new market. What you have to remember is that premiums in 2014 came in way below what we expected. In fact, where they are today is exactly where they thought they'd be today. It's just they came in lower than we thought and they rose faster than we thought. And that's just some of the unpredictability of a new market. That will settle down over time. And new insurers will enter.

COSTELLO: OK. So hindsight is 20/20, right?

GRUBER: Yes.

COSTELLO: Looking back, is there one thing that you wish was done differently?

GRUBER: I think there's really probably two things I wish was done differently. One is I wish the mandate penalty was stronger. The other, I wish the federal government had done more to get states to expand their Medicaid programs. I think that this is a fundamental flaw in our system that states are leaving so many systems uncovered and citizens who are sick who are coming into this exchange pool and making it more expensive.

COSTELLO: So realistically, you know, after the next president is put into office, what do you think will happen with Obamacare?

GRUBER: I think nothing much is going to happen, to be honest. I think that basically a system that largely works , that the flaws your seeing now or the premium increase you're seeing now are just the natural dynamics of a market as it transitions to its new state, and I think that we're just going to let it go for a couple years and it's going to get better on its own. And basically I think it's a system which largely works.

COSTELLO: What if Donald Trump becomes president, he has a republican congress, and he does repeal it? What happens then?

GRUBER: Well, first of all he won't repeal it. Remember, the whole argument and public debate against this law is that people didn't get to keep insurance they liked. Well, you're going to have 20 million Americans or more who are now getting insurance that they like. You're not going to take that away from them. And let's be clear, there is no replace. There is only repeal. There is no Republican alternative to this law, and the reason is because this is fundamentally a bipartisan legislation that was originally drafted on Republican principles, to be honest. And so there is no Republican alternative. And so his repeal and replace is just repeal and leave people uninsured. That's not going to happen.

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