U.S. Tariffs on Medical Imports Prompt Health Plan Premium Increases for 2025

Recent tariffs announced by the U.S. administration have the potential to increase the costs of prescription drugs, medical devices, and other healthcare products, which is prompting some health insurers to plan premium increases for 2025. Initially, a broad 10% tariff was set on imports from all countries, accompanied by higher tariffs on Chinese imports, which have since fluctuated between 30% and 125%.

The administration has indicated forthcoming major tariffs on pharmaceutical imports to encourage manufacturing to return to the U.S. A 25% tariff on pharmaceutical imports, as suggested in prior statements, could raise national drug costs by approximately $51 billion annually according to industry reports. Following these developments, several health plans including Optimum Choice of Maryland, Independent Health Benefits Corporation of New York, and UnitedHealthcare of New York have reported plans to increase premiums by between 2.4% and 3.6%, citing tariffs as a contributing factor. Similarly, UnitedHealthcare of Oregon has attributed around 3% of its proposed 19.8% premium hike to tariff-related drug price uncertainties.

Some insurers remain cautious, monitoring tariff impacts without currently adjusting premiums. Experts observe that rising healthcare prices are influenced by multiple factors, with tariffs introducing additional uncertainty, particularly in hospital reimbursement negotiations. Insurers face regulatory constraints preventing mid-year premium adjustments but may owe rebates if premium estimates overshoot actual costs. Market analysts note the lack of historical precedent complicates insurers' ability to predict tariff effects on healthcare expenses. The evolving tariff landscape and its consequences create challenges for payer/provider financial planning, regulatory compliance, and risk management within the health insurance market.