Fall 2025 Insurance Guide: Analysis of Health Policy, Tariffs Impact & AI
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The insurance trends for Fall 2025 are all about transition – be it responding to a shifting federal environment, or even adapting to the coming AI wave. The leaves are getting ready to change and so are several areas of the insurance industry.
Insurance is being impacted by several federal policies in fall 2025. The One Big Beautiful Bill Act changed several areas of the Affordable Care Act, as well as Medicaid. Tariffs also have the potential to ripple through several areas of the insurance industry. And changes to the federal approach to vaccines could also upend some aspects of insurance coverage.
Health Insurance
The highest profile impact of the One Big Beautiful Bill Act, which was passed earlier this year and signed into law was the changes it made to Medicaid. The law made cuts to several aspects of the program, and implemented new requirements to states, providers, and recipients.
One of the biggest changes was the so-called community engagement requirements. The law now mandates that many, if not most Medicaid recipients do 20 hours a week of paid work, education, or volunteer time in order to qualify for the federally funded health plan.
That requirement does not apply to parents of young children or the disabled or medically frail individuals, and it exempts several other categories of people with certain medical conditions.
The law also mandates that states do eligibility checks on the people it enrolls every six months, meaning every person enrolled would risk losing their coverage twice every year if they do not properly comply with the paperwork.
In 2028, Medicaid will also begin requiring a cost-sharing provision for many enrollees, similar to private insurance copays.
The law also tightens rules about which non-citizens qualify for Medicaid, putting many green card recipients and asylum seekers at risk of losing their coverage.
The One Big Beautiful Bill also made changes that will impact the Affordable Care Act.
For one, Congress opted to not extend the expanded premium subsidies that were implemented during the pandemic, meaning premiums are set to go up for most ACA plan holders beginning next year.
The law also shortened by one month the open enrollment period during which people can sign up for an ACA Marketplace plan.
It also slashed funding for the workers who help people find an appropriate policy, called navigators.
Many industry observers worry these changes will compound to mean that fewer people will be protected by the Affordable Care Act than had been covered in years past.
Another area industry watchers are looking with a warry eye is the approach the federal government is taking with vaccines. According to the Affordable Care Act, any vaccine recommended by the Advisory Committee on Immunization Practices needs to be covered by ACA compliant plans without any charge to the patient.
That is significant because Health Secretary Robert F. Kennedy Jr. replaced all the members of that committee. If those new members step back which vaccines are recommended, insurers will no longer be mandated to cover them. Insurers could still voluntarily cover them or cover them because of the agreements between the insurers and the private companies that buy their policies, but the federal mandate would be gone.
Tariff impact
As President Donald Trump continues to levy tariffs on countries across the globe, many of those taxes have the potential to trickle down to the insurance industry.
In the realm of property and casualty insurance, tariffs have the potential to raise post-claim prices, as well as the costs of the protected assets, which could then translate to higher premiums.
For example, with an auto policy, if an imported truck costs more to buy in the first place, then a comprehensive and collision auto policy protecting that vehicle would cost more, because replacing it would cost more.
And if that vehicle were to get into a crash, the imported auto parts would cost more, leading to a higher repair bill, and consequentially, higher premiums.
Even if the vehicle and the parts were manufactured domestically, higher raw material costs could also translate to higher consumer costs, and subsequently, higher premiums.
The same scenario goes for homeowners insurance and other building insurance, which would be affected by higher steel, lumber, copper, and other material costs.
The effect isn’t limited to property and casualty lines, either. Health insurance also stands to see higher prices from tariffs.
Just like higher component prices drive up auto premiums, many parts of the medical economy are also imported, whether that is large diagnostic equipment, or lowly IV bags and surgical gloves. And all of those higher prices could translate to higher reimbursement costs for health insurers, which can then lead to higher premium prices.
Pharmaceuticals have their own areas of concern. For one, Trump has said that an announcement regarding specialized tariffs targeting imported finished medicines will be announced soon. Any increase in underlying prescription costs will be borne by the insurers who have to cover them.
But it isn’t just imported finished medicines. The active pharmaceutical ingredients – the raw materials that go into medications – are almost all imported, even if the medicine is manufactured domestically. Higher raw materials costs lead to higher finished goods prices, which could all trickle down to the premium.
AI and Insurance
Corporate earnings reports are rife with how artificial intelligence is sweeping nearly every corner of the economy, and the insurance industry is no different.
While state insurance regulators may limit precisely how artificial intelligence, large language models, machine learning, and the like can be integrated into various areas of the insurance value chain at the moment, industry leaders are discussing many places they would like to see it introduced quickly.
The first areas of the insurance ecosystem that are most implementing artificial intelligence are also the areas that have, in the past, been outsourced abroad. While in years past a call center in India may have fielded customer calls and done basic back-office functions, things like AI chat bots and language recognition models are stepping in now. But the future of the technology has a long runway.
One of the areas ripe for AI innovation is underwriting. With some policy types, such as life or commercial, AI’s ability to digest huge data sets – such as social media feeds, customer reviews, and other big data sources – could help write policies with rates hyper customized to each policyholder’s risks and do it in mere moments.
With auto insurance, an AI-powered insurance app could integrate with the vehicles’ navigation systems to offer up real-time insurance pricing depending on which route was chosen that morning, steering the driver to lower traffic – and lower risk – routes. And if the driver were to get into an accident, an AI-powered app on the driver’s smartphone could integrate data from the vehicle’s sensors, along with photos of the damage uploaded on the spot, comparing it with current market pricing data, to give claims estimates in near real time.
In the back office, AI tools could take over a lot of the tedious work, such as writing coverage opinions, or processing prior authorizations. And since AI doesn’t get tired, it could do the work around the clock.
And once claims are filed, AI could easily comb through the endless reams of data, looking for fraud in ways that could slip past a human examiner.
While these are all rosy scenarios, AI critics warn that as the technology is moved into places like underwriting and rate setting and claims processing, a darker side could emerge. AI tends to double down on what it perceives as trends, making it uniquely susceptible to biased outcomes. In the insurance world, bias against a protected class isn’t just bad business. It is illegal. And when it comes to decisions made by AI, many are done in a so-called black box, meaning it isn’t obvious why one policy was priced one way, as opposed to another.
Still, AI could be a valuable tool, not just in helping insurance on the back end. It could also become a valuable risk-management tool. Many vendors are already feeding information, such as aerial and satellite photography into AI models to evaluate roof conditions and wildfire risks – meaning if used well, it could actually avoid claims in the first place.
Season of change
As Fall 2025 unfolds, the insurance industry is navigating a season of transition on multiple fronts. But insurers must also keep a close eye on the natural environment. With hurricane season still peaking into late fall, and wildfire risks intensifying in the West, weather-related catastrophes remain a looming uncertainty that could reshape balance sheets overnight.
The months ahead will challenge insurers not just to price risk accurately, but to help families and businesses weather both economic shifts and the storms — literal and figurative — that lie ahead.
Michael Giusti, MBA, is an analyst for InsuranceQuotes.com
It adds 20-hour weekly community-engagement requirements for many recipients, semiannual eligibility checks, future cost-sharing (starting 2028), and tighter non-citizen eligibility.
Parents of young children, disabled or medically frail individuals, and several other medically exempt groups.
Enhanced premium subsidies end, open enrollment is shortened by a month, and navigator funding is cut—likely reducing enrollments and raising costs for many.
Yes. If ACIP recommendations roll back, ACA plans may no longer be required to cover some vaccines at $0, though insurers could still choose to cover them.
They can. Higher vehicle, parts, and building-material costs push up repair/replace expenses—which typically flow into premiums.
Yes. Medical equipment, supplies, and even pharma ingredients are often imported; higher input costs can translate into higher reimbursements and premiums.
Customer service and back-office tasks, with rapid expansion into underwriting, real-time pricing, claims estimation, and fraud detection—alongside bias/“black box” concerns.
Late-season hurricanes and Western wildfire risks—plus economic shifts that may impact premiums and coverage choices.
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Michael Giusti is a senior insurance analyst, business journalist, and university professor with over 20 years of experience. He serves as department chair at Loyola University New Orleans and contributes to Insurance Thought Leadership, U.S. News, and other leading financial outlets.
