A key adviser who helped design President Obama’s signature healthcare law is calling for stricter penalties for people who choose not to pay for health insurance.
The MIT economist is giving voice to a growing number of ObamaCare observers who say a more onerous penalty would help alleviate some of the law’s struggles with attracting enough enrollees.
About 1 million fewer people than expected have signed up for the insurance marketplaces nationwide, resulting in higher costs for some insurers as they face a pool of customers who are sicker overall.
ObamaCare created both a “carrot and stick” approach to sign-ups: People receive subsidies to sign up, and if they don't, they have to pay more in taxes.
On the campaign trail, Democratic presidential nominee Hillary ClintonHillary Diane Rodham ClintonThe Armageddon elections to come Poll: Trump leads 2024 Republican field with DeSantis in distant second The politics of 'mind control' MORE has talked only about a bigger carrot. She has called for larger tax credits to help people pay their premiums as well as a new program to cover more out-of-pocket costs.
But Gruber, as well as other Democratic health policy experts, say the penalty would also need to rise. The amount is now capped at the yearly cost that someone would pay for ObamaCare’s bronze plan, the minimum coverage under the law.
About 25 percent of uninsured people are exempt from the penalty, for reasons such as financial hardship or significant life changes, according to data from the Kaiser Family Foundation.
Gruber said stricter penalties would prevent what he described as “individuals who are essentially free-riding on the system” – echoing concerns that are frequently raised by insurance companies.
“It’s hard to know what dramatic fix we could do without Congress participating in the process,” Gruber said. “I think nothing much is going to happen, to be honest.”
The ObamaCare architect also delivered a robust defense of ObamaCare marketplaces in general following the negative headlines this week after the White House announced that premiums would rise on average 25 percent next year.
Gruber stressed that the increase applied only to the “very small fraction of people” who buy coverage through ObamaCare. He said 85 percent of those people are getting help from the federal government to cover their costs.
“Now, for those remaining people, that is a problem, and that’s something that we need to address, but it’s not a crisis. It doesn’t mean the system’s collapsing,” he said.