The Obamacare Prediction of the Week

So, was Gruber correct about those savings? Well, not exactly. But don’t take my word for it; it’s Gruber himself who says so:

From August 2011 to January 2012, [Gruber] issued three reports to state governments stating that non-group insurance premiums would increase, relative to prior law. By 2016, he wrote, premiums would increase in Colorado by 19 percent; Minnesota by 29 percent; and Wisconsin by 30 percent.

Most importantly, Gruber has admitted that his model has a catastrophic flaw: it can’t model the impact of Obamacare’s requirement that insurers take all comers regardless of pre-existing conditions. Here’s what he said to the State of Colorado:

“It is important to recognize some limitations in our modeling of prices. In particular, given publicly available data we cannot incorporate the effects of the ban on pre-existing conditions exclusions. This ban will cause a rise in premiums as insurers are forced to cover conditions that they had previously excluded. In addition, there are new premium taxes on insurers that will raise premium rates…Overall, we cannot predict the net impacts of these factors on premiums without more analysis.”

It’s precisely this aspect of the law that non-partisan analysts have pointed to as a reason why Obamacare will drive up premiums.

As I said, I can’t crunch the numbers myself. But between his vested interest in downplaying Obamacare’s negative effects as one of its promoters and main designers, his previous track record in prediction, and his methodology, it makes sense to be somewhat skeptical of what he’s predicting now.

Then there’s the Obama administration’s own projections that state, “66 percent of small employer plans and 45 percent of large employer plans will relinquish their grandfather status by the end of 2013.” It appears that Gruber would have you think that virtually all of these plans will be replaced by equivalent ones that are less expensive, or at least of equal value, compared to the ones that preceded them and were canceled.

Somehow that’s hard to believe. But we should find out soon enough, as reality begins to replace models.