Trump tariffs threaten to impact long-term disability claimants

By Tony Poland, LegalMatters Staff • A United States-Canada trade war sparked by tariffs threatens to have a trickle-down effect on long-term disability (LTD) claimants, says Ontario disability insurance lawyer Courtney Mulqueen.

“The tariffs proposed by the U.S. government are causing a great deal of economic uncertainty and there is certainly reason to believe that will impact the healthcare industry,” says Mulqueen, principal lawyer of Mulqueen Disability Law Professional Corporation. “By all accounts the tariffs will have a negative impact on prescriptions and medical devices. It could leave LTD claimants forced to make some extremely difficult financial decisions.”

Immediately after taking power in January, President Donald Trump threatened to slap a 25 per cent tariff on virtually all Canadian and Mexican goods, which could plunge North America into a trade war that economists say could do long-lasting damage to each country’s economy.

Speaking to reporters earlier this month, Prime Minister Justin Trudeau accused Trump of trying to prompt “a total collapse of the Canadian economy,” making “it easier to annex us,” which the president has repeatedly stated is his desire.

‘Completely bogus and completely unjustified’

Trudeau called the tariffs “completely bogus and completely unjustified,” adding the move is a “very dumb thing to do.” Trump has since paused the tariffs until April 2 but uncertainty remains about what will happen next month.

“There are many Canadians who will be facing an uncertain future if Trump follows through on his tariff threats,” Mulqueen tells LegalMattersCanada.ca. “For those receiving long-term disability benefits, making ends meet in a trade war may be an insurmountable challenge. Even now people are choosing between treatment and food. For some of my clients this is a realistic situation.”

Doctors on both sides of the border have stated their concerns about the fallout from the proposed tariffs.

“If Ontarians do not believe a trade war will be bad for our publicly funded healthcare system, I am here to tell you I am worried sick as a hallway ER doctor,” Raghu Venugopal, a Toronto-based emergency physician, wrote in a tweet reported by the Walrus.

According to the publication, about 40 per cent of Canada’s imported medical devices come from the U.S. And medications are also expected to be impacted.

‘Send ripples throughout supply chain’

“There’s a concern here that any sort of tariff war could send ripples throughout the supply chain,” Mina Tadrous, an assistant professor at the University of Toronto’s Leslie Dan Faculty of Pharmacy, told Global News.

Tadrous told the news agency that the supply chain for medications is so global that the production of each drug crosses multiple borders before the finished product is available at Canadian pharmacies.

According to a report prepared for the Canadian Generic Pharmaceutical Association, “almost all [active pharmaceutical ingredients] used to manufacture medicines in Canada come from abroad.”

Walrus reports “the challenges the health care system will face might not be immediately recognizable to people outside the industry.”

 “The integrated nature of the North American supply chain of medical technologies means that tariffs from both sides of the border will reduce market access and impact the affordability and accessibility of healthcare in both Canada and the U.S.,” Nicole DeKort, president and CEO of Medtech, wrote in a letter to Finance Minister Dominic LeBlanc, according to the report.

U.S. healthcare providers concerned

Healthcare providers south of the border are also concerned about the impact tariffs could have. Shortly after Trump was inaugurated, the American Hospital Association (AHA) stated that they stand with the president “in seeking ways to prevent the ravages of illicit drug use in this country.”

“We commend your focus on this issue in the first few days of your second term,” AHA President and CEO Richard Pollack wrote in a letter to Trump. “We are, however, concerned that the approach of using tariffs may inadvertently put others’ lives at risk by jeopardizing the availability of vital medications and essential health care devices.

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“We ask that you consider granting exceptions to the current and proposed tariffs for medical devices and pharmaceuticals made in Mexico, Canada and China that are essential to the provision of safe, effective care in America’s hospitals, clinics, and other settings,” he added. “We welcome the opportunity to discuss how to preserve access to essential pharmaceuticals and devices with your team.”

Mulqueen says while the impact of tariffs may be at the forefront of those within the healthcare profession, the average people may not be fully aware of what it means for the price and availability of prescriptions and medical devices.

Lead to economic uncertainty

She says it will lead to economic uncertainty and when people are unsure about their financial future, it can trigger anxiety.

“For those already suffering from a mental health issue it can lead to more challenges,” she says. “Tariffs will result in higher prices for all consumers but for those receiving only a portion of their regular income in insurance benefits the prospects are much, much worse.

“In the past couple of years, the cost of living and high food prices have been an issue for most people. It has pushed them to the limit,” Mulqueen adds. “We struggled through the pandemic and now we are facing unreasonable tariffs. Financial stressors will likely make any sort of existing mental health condition worse and could even trigger new ones.”

Stretching an already tight budget while adding more stressors can exacerbate anxiety and depressive symptoms, she says.

“Dealing with financial uncertainty can lead to people feeling vulnerable,” Mulqueen says. “It can make it that much more difficult for people on LTD to recover so they can make a healthy return to work.”

Must receive appropriate treatment

She says that LTD claimants must prove they are receiving the appropriate treatment to continue receiving benefits. If not, their claim can be denied or terminated.

Even if money is tight, people still must pay for necessities such as food, a mortgage and utilities, Mulqueen says, potentially limiting some treatment options.

“Some claimants may feel forced to return to the job even though they haven’t fully recovered,” she says. “Of course, then their condition could get worse.”

Some people presently have difficulty getting the medication they need because of supply chain issues, says Mulqueen. Will tariffs increase those problems, she asks?

And it is not just LTD claimants who will be affected, says Mulqueen.

Insurers may face challenges

“Insurance companies will also have to deal with the impacts of a trade war,” she explains. “If they are funding 80 per cent of the cost of medications, will they have to lower that percentage or increase premiums? And if they increase premiums will the average person still be able to afford coverage?”

In the end, a trade war could lead to more people facing yet another challenge to funding appropriate treatment, says Mulqueen. 

“It puts them at a very real risk of having their benefits terminated,” she says. “Obviously, life then gets much worse for these poor people. If they cannot afford treatment or they are not getting it when they need it, that is going to prolong recovery times.”

Making matters worse is the uncertainty, Mulqueen says.

“The longer it goes on, the worse it gets,” she says. “Is it happening? Should people start stocking up on medication? And if it is happening, we do not fully understand how it is going to impact people. I have my doubts that there is a way for people to prepare fully for it. Long-term disability claimants need some guidance.”