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Tariffs are already making your health insurance costs go up
Health insurance companies have begun informing states that tariffs will result in premium increases for individual and small group market enrollees in 2026.
This comes amid congressional considerations of cuts to Medicaid and the expectation that they will end enhanced subsidies for the Affordable Care Act, known as Obamacare.
A research professor at the Center on Health Insurance Reforms at Georgetown, Sabrina Corlette, told Axios that there's a 'perfect storm of factors that are driving prices up.' Health insurance companies calculate their premiums ahead of each year, basing them on the expected prices and demand for goods and services.
President Donald Trump's tariffs are expected to increase the prices of prescription drugs, medical devices, and other medical products and services. Some of those costs will eventually be paid by those enrolling in health coverage.
Several health insurance companies responsible for plans for individuals and small groups have informed state regulators that tariffs are prompting them to raise premiums more than they would have otherwise for next year, according to Matt McGough, a KFF policy analyst.
In a filing last month, the Independent Health Benefits Corporation told regulators in New York that it is set to raise premiums for its individual market enrollees 38.4 percent in 2026.
Independent Health spokesperson Frank Sava told Axios that roughly three percent of that is directly due to tariffs, according to projections on how much tariffs are expected to increase the prices of drugs and the use of imported drugs.
UnitedHealthcare of Oregon revealed in a filing that almost three percent of its planned 19.8 percent premium increase for small group enrollees next year is due to uncertainty about tariffs, specifically regarding how they're expected to affect pharmaceutical prices.
McGough told the outlet that insurers 'don't have any historical precedent or data to project what this is going to mean for their business and health costs.'
'I think it really makes sense that they're trying to hedge their bets,' he added.
While Trump has yet to put in place pharmaceutical tariffs, he told reporters Monday that they would be arriving 'very soon.'
Insurers typically sign reimbursement contracts with hospitals that last several years; however, hospitals can request renegotiation if their costs increase due to tariffs, Corlette noted.
Insurers are unable to change their premiums during the year. However, if health plans exceed their premium estimates in rate filings, they must reimburse enrollees the difference. Insurers have no way to compensate for unplanned costs afterwards.
At the same time, some insurers have indicated that they're reviewing the effects of the tariffs, but they're not increasing their premiums because of them as of this time.
"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 of the Northwest said in a report to the state of Oregon.
McGough noted that state regulators can push back against the premium calculations put forward by insurers before they're made final.
Insurers must disclose their 2026 Affordable Care Act marketplace plan rates to federal regulators by July 16. Proposed rates will be shared by August 1.
