Students, professors and community members gathered in Solomon 001 Friday evening for the Bernard I. Fain Lecture on health care reform given by Jonathan Gruber, professor of economics at the Massachusetts Institute of Technology and director of the health care program at the National Bureau of Economic Research.
Gruber gave an overview about the problems with health care, outlined the key points of the recently enacted Patient Protection and Affordable Care Act and discussed the future of health care in America. He said he was optimistic about the law and had not expected a bill that inclusive to pass.
The lecture was the opening for a Department of Economics symposium intended to “try and showcase how economics is useful in the real world,” said Roberto Serrano, professor of economics and chair of the department.
The problem with health care in the United States is twofold, according to Gruber. There is both a “lack of access” and a “rising health care cost,” he said.
The left-wing solution involves a single-payer insurance company, but this is a “political non-starter” because 80 percent of the population is happy with its insurance and the industry is too large just to disappear, Gruber said. The right-wing solution gives tax credits to those who cannot afford insurance, but this solution does not “recognize the broken system,” he said.
Gruber called the solution that was implemented in the bill “incremental universalism.” This system models the one passed in Massachusetts in 2006, which Gruber played a key role in developing.
Gruber referred to the bill as a “three-legged stool.”
The first leg is reform to insurance practices, which Gruber said is the “single most important part of the bill” and changes “the entire nature of the social contract in America.” The reforms include no longer allowing insurance companies to deny applicants or drop current clients simply because they are unhealthy.
The second leg of the stool is an individual mandate requiring every citizen to get health insurance. Gruber stressed the importance of this piece of the bill and said that it was crucial in getting the insurance companies on board.
The third and final piece of the bill makes health care more affordable, making it possible for the government to mandate that every citizen purchase health insurance. This was accomplished by making anyone 133 percent above the poverty line eligible for Medicaid and giving tax credits to anyone whose income is lower than four times the poverty line, according to Gruber. He pointed out the compromise made here between the two original solutions.
In Massachusetts, the outcome of the bill has been “quite good,” Gruber said, though he admitted he might be biased. The number of uninsured has fallen from 10 percent to 4 percent, and employer-sponsored benefits have increased.
According to Gruber, the Congressional Budget Office projects similar results on the national level.
Gruber also spoke of the cost-control aspect of the Affordable Care Act, though he said that cost control “is not what this bill is about.” The politicians focused on this aspect of the bill only because “the American voter doesn’t care about the uninsured,” he said.
According to Gruber, there are two “fundamental barriers” to cost control, a scientific one and a political one. On the scientific side, economists don’t yet know how to cut the huge annual growth in health care spending. Also, calculations have indicated the rise in health of the population has been worth the enormous increase in health care costs since the 1950s, he added.
From a political perspective, it is easy to make cost-cutting health care reform sound “evil,” Gruber said. He pointed to outrage caused by a recent panel suggesting mammograms for women in their 40s are unnecessary and not cost-effective, leading politicians to claim, “The government wants to take away your mammograms.”
As for the future of health care reform, there are two possible hurdles to keeping the bill in place, Gruber said. The first is the legality of the individual mandate, which Gruber predicted will eventually come to the Supreme Court.
The second hurdle to the bill is the 2012 election, said Gruber. If a Republican wins the White House, he said, the bill could be repealed.
The audience asked questions about many topics, including the insurance companies’ response to the bill, budgetary concerns, malpractice and effectiveness of care. Gruber said he wanted to make sure he talked about what the audience wanted to hear, and the dozens of questions pushed the lecture beyond its original 90-minute time slot.
Ken Chay, professor of economics, said Gruber “did an incredible job taking a complex issue and getting the key points through to a non-academic audience.” He added that Gruber’s role in the Massachusetts health care reform made him well-suited to discuss what is “politically feasible.”
The symposium continued on Saturday, with four more lectures and a concluding panel with professors from the economics, sociology and community health departments.