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Gruber Was Against Higher Co-Pays Before He Was For Them

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MIT's Jonathan Gruber, one of the chief defenders of the 40% excise tax on high-cost health insurance plans, has come under fire from leftwing bloggers for failing to disclose a $297,000 contract from the Obama administration to analyze its implications while attacking opponents of the tax in print, such as a recent op-ed article in the Washington Post.

He tells Ben Smith of Politico.com that his public writing and his paid work for the administration are unconnected, and "at no time have I publicly advocated a position that I did not firmly believe - indeed, I have been completely consistent with my academic track record."

Hmmm. What about this March 2007 paper for the National Bureau of Economic Research, which he co-authored. It looked at the effect of higher out-of-pocket co-pays for retired public employees in California. Gruber found that they led to higher hospitalization rates as old folks with chronic diseases like diabetes and heart disease cut back on physician visits and necessary drugs.

These offset effects are concentrated in patients for whom medical care is presumably efficacious: those with a chronic disease. . . Our findings suggest that health insurance should be tied to underlying health status, with chronically ill patients facing lower cost-sharing.

What will happen after the excise tax hits high-cost insurance plans, according to Gruber today? 80 percent of employers will ratchet down plan benefits to keep their costs under the tax cap. The only way they can do that is by raising co-pays and deductibles and eliminating benefits. The extra money employers save will be returned to workers as higher wages, which they can choose to either use to pay for health care or pay other bills. And as his own research points out, many will choose to cut back on necessary care, and some will wind up in the hospital.

"There's literally no evidence out there that people are going to suffer," he told the Washington Post earlier this week. He should re-read his own paper.