New Frontier Group Mid-Year 2025 Tariff Update

New Frontier Group (NFG) is closely monitoring the tariff policy and cost pressures that create challenges for international travelers, expats, IPMI populations, and the insurers who serve them. These remain highly dynamic policies, with many under ongoing negotiation, litigation, or government review. Market conditions are changing rapidly.

Our goal remains clear: to ensure our clients remain prepared, protected, and positioned to minimize financial exposure while maintaining the highest level of patient care. Below is a full summary of the current Q2 2025 tariff changes, key healthcare sector impacts, and how NFG is actively mitigating these pressures for our global insurance clients.

Q2 2025 Tariff Update and Key Impacts for NFG Clients

The second quarter of 2025 brought new US tariff policies and continued cost pressures that are directly and indirectly affecting the healthcare system — with growing implications for international travel insurers, expats, IPMI members, and global payers. While some of these tariff changes target broader sectors, many have downstream financial impacts that flow into hospital operating costs, medical supply chains, pharmaceutical pricing, and overall healthcare claims.

Key Q2 2025 Tariff Developments

• New Tariffs Announced on Strategic Sectors: In May 2025, the U.S. administration implemented approximately $18 billion in new tariffs on imports from China. These primarily focus on semiconductors, EV batteries, solar equipment, and critical minerals. While not directly healthcarespecific, these sectors supply vital technology components used in diagnostic equipment, medical devices, and hospital IT systems,— adding indirect cost burdens to healthcare providers.
• Medical Device and Equipment Components Remain Affected: Existing tariffs on a wide range of medical equipment components — including imaging systems, diagnostic tools, surgical instruments, and durable medical equipment — remain in effect. Hospitals are already reporting elevated costs and procurement challenges tied to these ongoing duties.
• Pharmaceutical Supply Chain Pressures Continue: No new pharmaceutical tariffs were introduced this quarter, but ongoing tensions with China and India continue to threaten the supply chain for active pharmaceutical ingredients (APIs). These disruptions heighten the risk of shortages in generic and specialty drug production, ultimately raising costs across pharmacy benefit management for both U.S. and international patients.
• 90-Day Implementation Delays for Select Imports: Several tariff hikes originally proposed for Q2 were granted 90-day delays following industry lobbying efforts. These temporary suspensions provide limited short-term relief for select healthcare-related manufacturing components, but uncertainty remains pending final rulings.
• Litigation and Negotiations Ongoing: Multiple legal challenges to existing tariff structures continue to work through the courts. At the same time, healthcare and trade associations remain active in negotiations with federal agencies to pursue additional exemptions or sector specific modifications.

Key Impact for NFG Clients

• Medical Equipment & Supplies: Higher import duties on medical devices, diagnostic tools, and surgical instruments are raising procurement costs. Hospitals face ongoing supply chain volatility, leading many to secure alternative suppliers, collaborate with group purchasing organizations, and adjust financial strategies. Finance teams are actively exploring ways to offset rising costs through higher billed charges, bundled service fees, and procedural price increases that impact insurers.
• Pharmaceutical Inputs: Costs for APIs have risen for both branded and generic medications, especially for specialty drugs, injectables, and critical care therapies. Supply chain interruptions have caused backorders and increased pharmacy acquisition costs. International travel medial insurers are already experiencing pharmacy benefit inflation as PBMs negotiate higher rates with wholesalers.
• Technology Dependencies: Technology tariffs continue to drive up costs for hospital IT infrastructure, clinical software platforms, remote monitoring solutions, and digital diagnostic tools. Many hospital systems are investing heavily in IT modernization and cybersecurity compliance, with imported technology components subject to elevated duties. These increased operating costs eventually feed into higher claim charges for international payers.

For NFG clients managing international care delivery inside the US, these combined Q2 tariff changes reinforce the growing complexity of controlling medical costs for globally mobile populations.

How NFG Continues to Mitigate the Impact for Clients

At NFG, we have long anticipated the growing complexity of global healthcare pricing, and our multi-layered cost containment model is designed to adapt to these market shifts in real time and protect our clients.

Below are the key elements of our service features that we are focused on aligning with our clients’ needs to mitigate additional tariff related cost shifting where we can:

• Flexible Provider Network Access: We provide preexisting contracts and regulatory protections by blending access to multiple national networks (partnerships include Aetna, United, First Health, Claritev/Multiplan, Magnacare, and others) with direct provider contracts and negotiations, offering custom options that help minimize exposure to highly tariff-inflated billed charges.
• Advanced Bill Review & Arbitration: Above and beyond the contracted networks, we conduct line-by-line clinical audits and forensic review on complex cases to capture billing errors, negotiate charges, and ensure claims are priced appropriately.
• Dynamic Data Driven Repricing Models with Reliant Health Partnership: Our proprietary pricing models incorporate real-time claims data, market shifts, and provider charge behavior to benchmark every claim against fair and defensible payment levels—not inflated list prices.
• Care Navigation with Human Oversight: Every complex case, whether it’s an air ambulance evacuation or a long-term hospitalization, is proactively managed by our clinical care team with detailed oversight and logistical coordination to avoid unnecessary costs.
• Data-Driven Predictive Analytics: Our analytics enable insights to identify cost drivers early and detect where tariff impacts are emerging before they become major cost escalation issues.
• Telehealth Integration: Where appropriate, we embed telehealth consults as a first line of defense, enabling early intervention, second surgical opinions, care triage, and navigation to avoid high-cost facility-based care whenever possible.
• Pharmacy Cost Mitigation: With the growing financial strain of rising pharmaceutical costs—exacerbated by tariffs on raw ingredients, specialty drug inflation, and volatile global supply chains—pharmacy cost management has never been more critical. NFG’s strategic partnership with Pharmcare allows our clients to access a clinically-driven, value-based pharmacy benefit management solution. Unlike traditional PBMs that focus on volume-based rebates, Pharmcare deploys an adaptive care model that emphasizes personalized pharmacy oversight, eliminating unnecessary drug spend and optimizing therapeutic outcomes especially for high-cost specialty drugs. This partnership delivers measurable pharmacy savings—often producing double-digit reductions in Rx costs—while ensuring members receive the most appropriate and effective medications for their care plan.

How Clients Can Support NFG Efforts:

• Review Network Configurations Regularly: Ensure your members are being routed to providers and facilities that are part of NFG’s optimal pricing arrangements.
• Promote Early Member Engagement: Encourage members to contact assistance or care navigation services early in an episode of care to explore alternatives before hospitalizations occur.
• Utilize Second Surgical Opinion Programs: Embedding second-opinion services into benefit plans can reduce unnecessary surgeries and associated costs.
• Stay Informed on Policy Changes: NFG will continue to monitor US trade, reimbursement, and healthcare policy changes that may affect the international healthcare ecosystem.

Our Continued Commitment

As always, NFG remains focused on protecting your members and your financial outcomes in an increasingly volatile healthcare landscape. While tariffs and global economic shifts create new pressure points, our commitment to clinical quality, financial stewardship, and operational excellence remains unwavering.

We thank you for your continued trust in NFG. Should you have any questions or wish to review your program strategy, please contact your NFG account manager.

We will provide quarterly tariff updates to our clients — or more frequently if significant policy developments occur.