Health insurance companies have raised concerns that tariffs could lead to higher premiums for enrollees in the individual and small group markets next year.
What Happened: Health insurers are informing states about the potential rise in premiums for individual and small group market enrollees in the coming year, Axios reported. This is due to the tariffs imposed by the Trump administration, which are expected to raise the costs of prescription drugs, medical devices, and other medical products and services.
According to Sabrina Corlette, a research professor at Georgetown’s Center on Health Insurance Reforms, the Trump administration’s trade policy, potential Medicaid cuts, and the expected end of enhanced subsidies for Affordable Care Act coverage are creating a “perfect storm” of factors driving up prices.
Some health insurers have explicitly attributed a portion of their planned premium increases for next year to the impact of tariffs. For example, Independent Health Benefits Corporation informed New York regulators that 3% of its projected 38.4% premium increase for individual market enrollees is directly due to tariffs.
Likewise, UnitedHealthcare of Oregon indicated that close to 3% of its proposed 19.8% premium hike for small group enrollees stems from uncertainty related to tariffs.
Why It Matters: This development comes on the heels on Senate Republicans recently unveiling President Trump’s tax and health plan, which includes a $5 trillion debt ceiling hike and stricter Medicaid eligibility requirements. This, coupled with the tariffs, could significantly impact the health insurance landscape in the U.S.
Notably, billionaire investor, Mark Cuban proposed a bold healthcare plan aimed at eliminating traditional insurance premiums and introducing transparent pricing. Cuban’s proposal, made amid growing frustration with insurance clawbacks and escalating costs, could potentially revolutionize the U.S. healthcare system
Insurers must submit their proposed 2026 ACA marketplace plan rates to federal regulators by July 16, with the rates set to be published by August 1. This will offer greater insight into how much concern tariffs are causing among health insurers.
On a year-to-date basis, iShares US Healthcare ETF IYH declined 4.77% and Healthcare Select Sector SPDR Fund XLV fell 3.18%.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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