Consultant Gruber’s comments hurt health care reform effort in Vt.

VERMONT — Critics of the Shumlin administration earlier this week were demanding the dismissal of a state consultant whose remarks about the Affordable Care Act last week went viral on Twitter and were picked up by major news outlets, including Bloomberg, Slate and the New Republic.
By the end of the day Wednesday the consultant had said he would stay on the job but work without pay.
Jonathan Gruber, an MIT professor who is advising the Shumlin administration on health care reform, said in remarks a year ago that the federal law was written in a “tortured way to make sure the Congressional Budget Office didn’t score the mandate as taxes.”
“Lack of transparency is a huge political advantage,” Gruber went on. “Call it the stupidity of the American voter, or whatever, but basically that was really, really critical to getting the thing to pass.”
Gruber bills himself as an architect of the Affordable Care Act.
The remarks, captured on video at a panel discussion at the University of Pennsylvania in October 2013, were dredged up by a conservative activist last week, and then tweeted by Phil Kerpen of American Commitment, a free market advocacy group. The video was picked up by the Daily Caller, Watchdog.org, Fox News and mainstream media outlets.
Former Vermont Gov. Howard Dean weighed in on the matter in an interview on MSNBC’s “Morning Joe.”
“The problem is not that he said it,” Dean said. “The problem is that he thinks it. I’m serious. The core problem under this damn law is that it was put together by a bunch of elitists who don’t really fundamentally understand the American people.”
Conservatives are holding up Gruber’s comments as proof that he intentionally misled the American public when he worked for the Obama administration. The president has flatly dismissed that charge and David Axelrod, a former top adviser to Barack Obama, tweeted: “As one who worked hard to make ACA and its benefits clear, let me say: if you looked up ‘stupid’ in dictionary, you’d find Gruber’s picture.”
Gruber has made remarks in Vermont that have also riled conservatives. In another video taken by True North Reports, a conservative media outlet in Vermont, Gruber asks if comments from former state Sen. John McClaughry about the efficacy of a single payer health care system in Vermont were written by his “adolescent children.” Gruber appeared before the Legislature in 2011 with professor William Hsiao who delivered a report that became the framework for Act 48, the state’s health care reform law.
The Shumlin administration gave Gruber a $400,000 contract in July which expires in February with an option for an extension. The MIT professor is being paid $500 an hour to evaluate how a tax-funded health care system would impact subsets of the state’s population. Gruber is primarily charged with creating a technical economic analysis of a universal health care system, but also may advise the governor on policy matters related to the project, according to his contract with the state.
Gov. Peter Shumlin, whose mandate has been weakened by a marginal victory in the polls over a nominal Republican candidate earlier this month, is moving ahead with his signature single payer health care initiative. Gruber’s work is crucial to that effort. Under a set of provisions known as the Mullin amendment, the Shumlin administration must show that the initiative, which hinges on the shift from a $2 billion private health insurance system to a publicly financed universal health care program, must not be detrimental to the state’s economy.
Shumlin said Gruber’s comments are “reprehensible,” but it’s too late to find someone else to complete his work on the economic impact of single-payer financing options.
“I am caught between a rock and hard place. I have a man who has made comments about all of us, the American public, that I find reprehensible,” Shumlin said Tuesday. “I also have to do the economic work, the modeling, that only made sense in order to present a plan to the Legislature.”
Republican critics of Shumlin’s single payer health care initiative are demanding that the administration fire Gruber. Lawrence Miller, the chief of health care reform, says while Gruber’s comments are “appalling and incredibly offensive,” and the MIT professor does not speak for the administration. Miller said he has no plans to fire Gruber, whose technical expertise as an economic analyst is essential to the development of the state’s financing plan.
Rob Roper, president of the Ethan Allen Institute, says Gruber has no credibility and must be dismissed immediately. Roper says that the professor’s remarks are particularly questionable in light of the lengths the Shumlin administration has gone to keep details of the financing plan secret. The administration was supposed to give lawmakers the plan in 2013 and 2014. In the meantime, the governor has kept a lock on information about tax proposals associated with the initiative. Public records requests for communication and presentations about the plans have been rebuffed.
“We have to ask ourselves if the Shumlin administration that hired Gruber and single payer advocates in the Legislature share their high-priced consultant’s view that ‘lack of transparency is a huge political advantage,’ and, when you’d rather have something than not, the ends justify the means,” Roper wrote in an opinion piece.
Darcie Johnston, an anti-single payer advocate who runs Vermonters for Health Care Freedom, said in a statement that “recent remarks made by Jonathan Gruber are eye-opening and insulting to all Americans.”
“It is clear by the hiring of Gruber that the Shumlin administration intends to continue pulling the wool over the eyes of Vermonters,” Johnston wrote.
Miller, who is spearheading the initiative for the governor, says Gruber’s work will be limited to economic modeling and analysis. The assumptions Gruber is working with come from Michael Costa and Robin Lunge, the architects of the governor’s universal health care plan. In addition, the Legislature has engaged the Rand Corp. to review the assumptions that will be the basis for the economic analysis. Rand is charged with developing a macroeconomic model.
“We have gone down the path with him over the past couple of months, customizing the economic model to make sure we are providing the Legislature with good analysis of the options we’re looking at,” Miller said. “I think it would be imprudent not to complete that work. It’s not easily replaced.”
Miller says Gruber’s work will be reviewed by Rand before it is presented as part of a financing plan package to the Legislature in January. The Joint Fiscal Office has gone over key economic assumptions, but will not review the plan until it’s released because the nonpartisan research arm of the Legislature will not receive a pre-release version.
Sen. Claire Ayer, D-Addison, says Gruber was not hired to deal with the public or make policy recommendations.
Ayer says she’s not happy with Gruber’s remarks, “they showed a certain lack of judgment,” but she says his quotes were taken out of context and the media are “making a mountain out of a molehill.”
“I worry people will think he’s biased, but we’re not asking him to make policy recommendations, we’re asking him to do certain kinds of data, and he’s good at it,” Ayer said.
Ayer says she believes there is a concerted effort by conservatives in Vermont to push the issue. She has received four phone calls from people who have insisted that “we should fire Gruber and if I don’t think, so I should be fired, too.” None of the calls have been from constituents, she said.
Late on Wednesday news broke that Gruber had agreed to forgo roughly $120,000 in compensation from the state, VTDigger reported.
Lawrence Miller, chief of health care reform for the state of Vermont, spoke with Gruber this week, whom he described as “profoundly apologetic,” to ask that he donate his time to complete the work for Vermont.
Gruber said in an email that he had no comment on the agreement.
Miller said he didn’t seek the pay cut to appease Republican lawmakers, who have called for the firing of the MIT economist.
“His comments were equal opportunity offenders,” Miller said, and damaged the credibility of his work.
His $400,000 contract with the state runs through Feb. 15. It contains an additional $50,000 for support work by Moody’s Analytics, which the state will pay.
Gruber has been paid $160,000 so far, which Miller said is split roughly 50-50 between Gruber and his team of research associates.
Those associates will continue to be compensated for their work, and the state anticipates paying them $120,000 more through the life of the contract, while Gruber agreed to let the state keep his half, Miller said.
That half could be less than $120,000 if the process comes in under budget.
Sen. Kevin Mullin, R-Rutland, said Wednesday he’s pleased with Miller’s efforts.
“It’s the best outcome Lawrence Miller could have negotiated at this time,” Mullin said. But he added that Gruber’s work is compromised and must be vetted by other economists working for the Legislature and the administration.
“The money (Miller) was able to negotiate is going to have to be reinvested in further economic analysis in order for there to be transparency and for people to have faith in this process,” Mullin said.
That could ultimately cost the state more than the $120,000 it’s likely to save on Gruber’s contract, Mullin said.

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