Tariffs stir uncertainty in hospital supply chains, health insurance premiums

Editor's Note

Recent reporting from Axios reveals hospitals and health insurers are reporting new concerns about rising tariffs and trade policy uncertainty, with the former delaying purchasing decisions and the latter planning premium increases as a result.

In the first article, published June 18, the outlet reports that health system administrators are proceeding cautiously on purchasing lower-margin, high-volume medical supplies such as gloves, gowns, and syringes. Some are waiting to see how increased tariffs play out and whether manufacturers secure exemptions. 

While no widespread price hikes or product shortages have been observed, hospitals are monitoring imported products more closely, especially PPE and disposable devices. US manufacturers that ramped up during the pandemic have scaled back as hospitals resumed overseas sourcing after public health mandates ended. The American Hospital Association (AHA) has raised particular concern over potential levies on critical materials used in imaging and radioactive drugs, Axios notes.

The second article, also published June 18, details how some health insurers are beginning to account for tariffs in their premium rate filings for individual and small group markets. In one of multiple examples cited by Axios, Independent Health Benefits Corporation told New York regulators that 3% of its proposed 38.4% premium increase for individual enrollees in 2025 is directly attributed to tariffs and their impact on drug prices. In another, UnitedHealthcare of Oregon similarly reported that tariffs accounted for nearly 3% of its planned 19.8% increase for small group coverage.

According to sources quoted in the article, said insurers are facing difficulty projecting the full impact due to lack of historical precedent. Although some insurers have opted not to include tariff-related costs in their filings, others are taking a precautionary approach. Final proposed ACA marketplace rates are due by July 16, and proposed rates will be posted by August 1.