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Health-Care Law Designer on the Law’s Costs

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    MIT Economics Professor Jonathan Gruber on the cost projections for the health-care law.

  • Duration 5:26
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The fate of president Obama's health care overhaul will soon have been settled by the Supreme Court.

The legislation is approaching its two year anniversary and has ignited controversy and divided many over whether it really does more harm than good.

And whether -- can fulfill all of the promises to do.

And in fact whether we can afford it.

Joining me now Jonathan.

Professor at MIT and one of the folks responsible for helping to craft both.

Romney care and obamacare this book is called Health Care Reform why it's necessary.

And how it works Jonathan welcome to the show.

You know we had some interesting numbers out this week from the CBO looking at the rising cost of obamacare -- -- show folks these numbers.

It back in march of 2010 the CBO says it obamacare will cost 938 billion.

In March 2011 is said one point 44 trillion and and march of 2012 right now.

It's gonna cost one point 76 trillion and of course they're looking out over a period of a decade ten years of the cost.

What do you make of this is this what we were promised that I don't think so.

This is basically to look at the CBO's numbers.

What's happening is twofold first of all the laws getting phased -- so as you go at a decade every year you -- gets more expensive this is not a surprise -- -- the little -- designed.

The relevant reverend CBO is not the numbers you showed which are sort of been misleading only touted as the cost double.

That's not what happened with the CB report says it's actually the net cost of this law fell by fifty billion dollars over the decade.

-- -- the project but this -- and they're interrupting here for just a second I hear what you're saying yeah.

And if you match up the cost of Obama care with the taxes that were put in place to pay for it.

That's what happens what you just described but if you look only the cost of the program.

It goes to the ceiling.

Is that the intention that we have yet another entitlement program in this country -- we really can't afford.

Well once again the cost are exactly what they were projecting the reason they're going up is because -- phases in over time so when CBO projected their -- exactly they projected to actually.

A little bit cheaper than projected.

The question whether we can afford it usually just a question national priorities that the question of whether.

We care about the uninsured a question about we care about fixing broken insurance markets if and that he also and what you were there and.

-- -- of whether we wanna pay extra taxes because it's the Cadillac plan tax it's an investment income tax to support this spending.

At the end of the day I think most Americans in Health Care Reform we're looking for lower premiums but in fact that's not what we're getting either.

I wanted to ask you about some work that you had done for states in this country -- I've heard about.

You would talk about lower premiums with Health Care Reform and how that would be a positive but I understand these studies that you're doing for states in your consultancy.

Isn't finding that at all.

Is that correct.

What we're find.

That's not correct for finding is that on after you account for the tax credits will be in place from the slot premiums fall on average in every state outlook -- Our rate in Massachusetts.

Where Romney care was energy used as some of the highest health care costs in the country.

I -- show you here.

Massachusetts get health care costs higher than the US average you can see.

That the out wire here -- Massachusetts -- US is up on the far right there.

What's going on it seems like out reducing costs wouldn't be in a priority of Romney care why -- -- -- Well that if you do that -- -- for on the off five years ago before -- care you find Massachusetts was still an out wire and even higher.

In fact -- the rest of the country Massachusetts falling.

Since we've entries Romney care -- governor Romney's reforms in Massachusetts.

He can't just compare we were expensive before we're expensive after.

Yeah you are of analogy is is has double the monthly double the monthly premiums.

Of the US average state.

I mean that's not a good -- -- can you defend that track record.

Sure absolutely what I can tell you is our care's expensive because -- and expensive state -- expensive medical care.

What we have to ask is what did help performed due to that high costs wouldn't it is that lowered it hasn't fixed the problem -- -- to -- the national average but it slowed the growth.

That's what you want from Health Care Reform you can't just say well -- -- and we're expenses though it's failed he wanted to slow the growth and that's what it's done.

-- Jonathan I wanted to ask you about some testimony you gave to that I believe it was this as senate committee back in 2009.

People got upset because I did she -- real reveal that the time you were being paid by the administration.

As a special consultant senator Chuck Grassley got so upset.

That he introduced legislation to require anybody who appears in front of one of these.

-- -- -- divulge who they're working for he said the public deserves to know where witnesses are coming from because they can influence the outcome.

Of legislative activity.

How do you respond to that.

Well I was testifying at the time on the topic totally unrelated I was attacked -- consultant to the Obama administration I was getting paid.

I was testifying in a topic that was totally unrelated to what I was getting paid for so I didn't.

Think I needed to highlight that in retrospect I probably shouldn't that was a mistake but it didn't really influenced -- testimony actually evidence and the testimony.

Had been writings I've been doing over the past twenty years well -- for starters the paid consultant to the Obama administration Jonathan thanks for coming on the show tonight we appreciate your time.

You -- my pleasure.

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