President Trump moved to end government subsidies for insurance companies covering low-income Americans, a decision that will raise premiums for other consumers, said MIT economist Jonathan Gruber on Boston Public Radio today.
"Instead of the government paying for them, insurers will have to," Gruber said. "[Insurers] are going to raise their prices through the roof and many of them will just exit the insurance markets as a result."
He explained how insurers would previously receive government subsidy to front outstanding costs for people who can't afford their coverage.
After the White House's decision yesterday, other consumers will pay the costs of those subsidies for low-income Americans through higher premiums.
Gruber explained that Massachusetts will be affected in the same way as other states, saying, "Our insurers are screwed."
"They still need to provide these low-income protections to our citizens, but they suddenly need to finance them, which means that the premiums and the exchanges are going to have to go way up," said Gruber.
Gruber said in addition to the decision last night, Trump signed an executive order allowing insurance companies to offer "skinny plans" that provide less coverage for lower costs.
He noted two problems with the new allowance of skinny plans. First, that insurance companies might hide what is and isn't covered, a possibility that was not allowed under Obamacare. The second, Gruber, said, was more subjective, and was related to the ethical questions swarming the health care debate.
"Do we really want women, the mentally ill, people with cancer to have to pay a lot more for their health insurance?" he said. "Or do we recognize that at some point, most of us are going to have a kid or be in a family that has a kid, we're going to deal with mental illness, we're going to be at risk of cancer, and we want to make sure we're protected?"
