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MIT's Jon Gruber just got fired from the Massachusetts health care board

  1. MIT economist Jonathan Gruber has been fired from his post helping to oversee Massachusetts' health insurance marketplace, the Boston CBS affiliate reported Wednesday.
  2. Gruber previously became embroiled in a controversy over video-taped remarks that showed him saying the health law only passed because of "the stupidity of the American voters."
  3. More recently, Vermont's state auditor has accused Gruber of overbilling the state for consulting work he did on it's (now-failed) single-payer health care plan.

Gruber, three others fired from health board

Jon Keller tweeted the news on Wednesday:

It's unclear at this point whether Gruber's firing, which was one among four, was related to the new questions about the Vermont billing.

Gruber came under fire for video remarks last year

Jonathan Gruber is a big deal in health economics for two reasons. First, he was an architect of Massachusetts' universal coverage expansion in 2006 - the law that, four years later, Obamacare would closely mimic. Gruber was so key in Massachusetts' reform efforts that Gov. Mitt Romney thanked him by name in the speech he gave when the law passed.

Gruber has also designed the gold standard in modeling software to game out the effect of different health insurance reforms. The model software can project what will happen, for example, if you pull the individual mandate out of the Affordable Care Act - or what happens as you make the penalty for not buying insurance bigger or smaller. The White House contracted with Gruber to use his model during the health law debate.

In late 2014, Obamacare opponents have surfaced multiple video clips of Gruber that fall into two categories: Gruber lending support to the new Supreme Court case against Obamacare and Gruber saying that the "stupidity of the American voter" helped the law pass.

The Supreme Court videos

These videos aren't about the Supreme Court, but they do lend some support to the King v. Burwell case that it will hear oral arguments on next week. They show Gruber making some version of the argument that the plaintiffs in King make: that the subsidies in Obamacare were meant to be an incentive for states to set up exchanges. There are two videos from January 2012 with some version of this statement.

"What's important to remember politically about this, is if you're a state and you don't set up an Exchange, that means your citizens don't get their tax credits," Gruber says in one of the clips.

Gruber's remarks can be seen as evidence for the plaintiffs in King: a supporter of the law making the case that these subsidies could be lost in states that defaulted to healthcare.gov. It cuts against what the congressional aides who drafted the law say, that it was always the intent of Congress to provide subsidies in all states regardless of who ran the marketplace.

Gruber has since said he spoke "off-the-cuff" and made a mistake. And there's reason to believe him: Gruber spoke regularly to dozens of reporters during this period, and never mentioned this idea to any of them, and his modeling software always assumed that federal exchanges could use subsidies. So these comments are at odds with the bulk of his work on this issue.

But King supporters have still used it, albeit somewhat gingerly, as proof of their argument. "Gruber acknowledging this feature of the law is not direct evidence of congressional intent," Cato Institute's Michael Cannon, a key architect of the King case writes. "But Gruber is probably the most influential private citizen/government contractor involved in that legislative process."

The "stupidity of the American voters" videos

On Monday, the Competitive Enterprise Institute posted a clip where Gruber suggested that the "stupidity of the American voter" helped Obamacare pass.

Gruber was making a larger point that that the health law was written in a "tortured" way for the sake of politics. And that's common. Gruber picks out the example of legislators calling the individual mandate a fine, rather than a tax just to make the idea more politically palatable.

Gruber's comments, though expressed poorly, speak to something very real. "Here's the dirty little secret," wrote Neil Irwin at the New York Times. "Mr. Gruber was exposing something sordid yet completely commonplace about how Congress makes policy of all types: Legislators frequently game policy to fit the sometimes arbitrary conventions by which the Congressional Budget Office evaluates laws and the public debates them."

The Affordable Care Act is replete with policies drafted to avoid political controversy. It's true of the decision to call the mandate a fine, and the commitment to keeping the price tag of the law under $1 trillion. This led to weird policy decisions, like waiting three years until after the law passed to start the coverage expansion.

Gruber has since called this video inappropriate.

A new controversy in Vermont

Gruber had done work advising Vermont on its plan to build a single-payer health care system, using his econometric model to map out how much the plan would cost.  It was his work that ultimately convinced Governor Peter Shumlin to drop the plan, fearing single-payer would be too expensive for the state.

A state auditor's report published in mid-February suggests that Gruber "overstated" the hours he and his research assistant worked on the single-payer project.

Gruber twice billed Vermont for 500 hours worked by his research assistant, once for October and once for November. The state auditor found two things implausible about this: first, that the research assistant worked the exact same number of hours each month and second, that he worked so much.

"If Dr. Gruber had a team of programmers, the total hours billed might appear reasonable (ignoring the round numbers for the moment)," the auditor's report says. "But we now know that Dr. Gruber used only one RA during this period, so it seems unlikely that the RA could have worked 1,000 hours in 10 weeks (the total from the first two invoices). To do so, the RA would have worked exclusively on this project for more than 14 hours per day."