Health insurers face “relatively modest short-term effect from tariffs,” according to an April 28 brief from Fitch Ratings.
The short-term effects could change though depending on how long tariffs last and the industries they apply to, and insurers could face higher drug costs if pharmaceutical tariffs occur.
President Donald Trump has threatened tariffs on pharmaceutical imports, with U.S. Commerce Secretary Howard Lutnick saying in mid-April that the tariffs will be implemented “in a month or two.”
“When we look at our potential exposures, we feel pretty good. In fact, I’d say better than pretty good in terms of the degrees of price protection mechanisms we have in preexisting contracts and also various pieces of legislation, which limit the ability of manufacturers to pass price increases down through the system,” UnitedHealth Group CEO Andrew Witty told investors April 17.
“When you look at the structure of the marketplace, we feel pretty well positioned for that.”
Mr. Witty noted that it’s a dynamic situation and it’s unclear as of now what pharmaceutical tariffs may or may not look like.
“We’re watchfully waiting,” he said. “There’s many kinds of layers of government protection within the regulations that sit over the drug companies in terms of their ability to increase prices above inflation. There are things like Medicaid best price protections, which would also have potential applications there. I just want to reiterate, like everybody else, we don’t know yet what the reality of this is.”
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