Your health plan might get costlier in US as Trump's tariff is pushing insurers to hike premiums

Health insurers in the US said President Donald Trump's tariffs are driving them to raise premiums they will charge to individual and small group plans next year. They have started to notify states to that Trump's tariffs will drive up the premium for the enrollees next year, Axios reported.

Independent Health Benefits Corporation has notified New York regulators of its intention to raise premiums for individual market enrollees by 38.4% in 2026. According to a spokesperson speaking to Axios, approximately 3% of that increase is due to anticipated cost hikes for medications, including imported drugs affected by tariffs. Similarly, UnitedHealthcare of Oregon reported that nearly 3% of its proposed 19.8% premium hike for small group plans is linked to uncertainties surrounding tariffs imposed by Trump.

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Health insurers to hike premium

Trump has signaled that sector-specific tariffs on pharmaceuticals are expected “very soon,” fueling uncertainty as Congress weighs cutting Medicaid and ending enhanced subsidies under the Affordable Care Act. "There are sort of a perfect storm of factors that are driving prices up," Sabrina Corlette, research professor at Georgetown's Center on Health Insurance Reforms told Axios.

On Wednesday, Donald Trump told reporters on board the Air Force One, that tariffs on the Pharma sector are 'coming soon.'

"Pharma tariffs are going to come in at levels you haven't really seen before. We are looking at pharmaceuticals as a separate category. We will be announcing that sometime in the near future, and not too distant future. It's under review right now," Trump had said back in April.

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The expected price of goods and services and projected demands for them are taken into consideration by health insurers for calculating monthly premiums in advance of each year. The tariffs announced by President Trump are expected to rise the prices of prescription drugs, medical devices and other medical products and services. And ultimately, enrollees might have to bear the brunt of it.

KFF policy analyst Matt McGough wrote in an analysis that a bunch of health insurers administering individual and small group plans have already explicitly told state regulators that tariffs are forcing plans to raise enrollee premiums more than they otherwise would next year. Insurers "don't have any historical precedent or data to project what this is going to mean for their business and health costs," McGough said to Axios. "I think it really makes sense that they're trying to hedge their bets."

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Some insurers have noted that although they are closely monitoring the effects of tariffs, they have not yet factored them into their premium pricing.

"There is uncertainty around inflation and the economy due to possible tariffs however we did [not] put anything for this in this filing," Kaiser Foundation Health Plan of the Northwest's report to Oregon reads.
State regulators can also push back on insurers' premium calculations before they're finalized, McGough noted.