US: Health insurance uptake faces uncertainty
Source: Middle East Insurance Review | Jun 2025
Fewer than half of low-income individuals in the US have private health insurance. President Trump’s politics bring uncertainties to the pharmaceutical industry, which will likely translate into higher health insurance rates for consumers, potentially pricing out Americans with lower disposable income, while leaving others underinsured, according to recent GlobalData research.
According to GlobalData’s 2024 Financial Services Consumer Survey, 59.6% of US consumers hold private health insurance. Private health insurance premiums can be substantial and there is a strong correlation between product holding and disposable income. Lower-income individuals are less likely to be able to afford private health insurance, with product holding falling to 40.6% among individuals in household incomes under $20,000. Meanwhile, they would also face having to pay out-of-pocket for their medical expenses, potentially leading to financial strain, which pushes them into debt or simply not being able to afford the medical care they need.
GlobalData lead insurance analyst Beatriz Benito said, “The US pharmaceutical industry has so far escaped Mr Trump’s tariffs, which have otherwise been imposed—although implementation has been delayed—in a plethora of industries. Yet, the threat is there, with Mr Trump indicating he may impose tariffs on pharmaceutical imports, which would make medications and hospital treatments more expensive. An increase in drug costs will also mean that patients could potentially hit their insurance limits sooner, which increases the risk of underinsurance.”
Despite threats of US tariffs on pharmaceuticals, President Trump said he wants to ‘equalise’ or bring down drug prices in the US to the level of other countries. The president signed an executive order to reduce the price of prescription drugs, but it is expected to have no immediate effects.
Ms Benito said, “Overall, Mr Trump’s policies bring uncertainties about the future of the private health insurance market. This entices a climate where insurers are likely to respond by increasing premium rates and could even limit coverage of certain medications. Under such circumstances, underinsurance may become a real possibility, while other Americans could be priced out and may be forced to forego cover altogether.” M