UPDATED: Gruber’s Brief Dealings with HealthSource RI


MIT professor Jonathan Gruber made millions helping to design the federal Affordable Care Act (ACA, or ObamaCare), to usher it through into law, and to help states implement it.  Dealing with Rhode Island’s health benefits exchange under the ACA, HealthSource RI, netted Gruber less wealth than he expected.

According to a contract with Wakely Consulting Group, acting as a contractor for HealthSource, Jonathan Gruber’s project performing a “microsimulation analysis of expected impacts of the Affordable Care Act” was budgeted for $178,054 in labor and $1,260 in expenses.  His rate of pay was to be $350 per hour, and the project was intended to help Wakely “refine projections of cost and sustainability for the Exchange, the BHP [basic health plan], and the Medicaid expansion population.”

Instead, Gruber received just $40,000, and earlier estimates of the number of paying HealthSource customers were dramatically short of reality, while the number of Medicaid recipients has been significantly higher than expected.

Email correspondence with Gruber that HealthSource provided to the Current under an Access to Public Records Act request states that HealthSource RI Director Christine Ferguson put a hold on Gruber’s project in December 2012, and a spokesperson for the exchange says that it was never taken up again.  Gruber’s response to the news, on December 10, 2012, was, “Whoa, that’s heavy.”  He claimed to have already done hiring in anticipation of the work.

Despite cessation of his project, Gruber’s name appears in a May 15, 2013, request for additional funding from the federal government: “Dr. Jonathan Gruber worked with RI to model different scenarios of take-up rates of the uninsured, as well as to estimate rates of individuals moving between private insurance and Medicaid or the Exchange.”

The numbers shown in that grant request (and previously reported by the Current) were from an earlier analysis that Gruber and his research assistants performed right after he first met with HealthSource representatives, according to the spokesperson.  In the June 7, 2011, email in which Gruber sent along his findings, he highlighted the inclusion of “undocumented immigrants” and the varying health risks of people in different income groups.

After a paragraph that HealthSource has blacked out in the email, Gruber wrote:

… it is important to emphasize that this is just a first pass.  In particular, this misses any impacts of folks coming out of ESI [employer-sponsored insurance] into the exchange – and how that “crowdout” may differ depending on whether there is a BHP option.  That will require the richer modeling laid out in the proposal.

Gruber then mentions “the key assumptions” that he made “on various takeup rates and population movements” applied nationally.  “This is very crude for a number of reasons,” he wrote, but HealthSource has blacked out the two paragraphs explaining the reasons.

After the redaction, Gruber goes on to say that his crude analysis “provides some rough benchmarks that you can use in setting your takeup rates.”

Update 12/3/14, 12:57 p.m.: According to a HealthSource spokesperson, the payment to Jonathan Gruber was in the amount of $42,078.75 and was paid on April 30, 2013.

(The featured image at the top of this article shows that portion of Gruber’s email.)