The Executive Order
President Trump recently issued an executive order introducing sweeping tariffs affecting all U.S. trading partners. The directive, formally named "Regulating Imports with a Reciprocal Tariff to Rectify Trade Practices That Contribute to Large and Persistent Annual United States Goods Trade Deficits," implements a universal 10% import duty on goods entering the U.S. beginning April 5, 2025. For 57 specifically identified nations enumerated in Annex I, the order mandates steeper tariffs between 11% and 50%.
Many economists anticipate that these measures will likely increase retail prices across various product categories while potentially transforming international supply chains. Other market experts and White House officials argue that the new tariff policy will benefit businesses and consumers in the long term.
Direct Impact on Mental Health Practices
Rising Operational Costs
For mental health counselors in private practice and agencies, the immediate concern centers on increased operational costs. Though services themselves aren't imported, the materials supporting counseling practices often are:
- Computers, tablets, phones, and other telehealth equipment—many of them manufactured overseas—would likely increase in price, raising the cost of practice upgrades and maintenance, particularly those with components from China.
- Furniture and basic supplies used in clinical settings could become more expensive.
- Medications aren’t prescribed by counselors, but many clients use them concurrently with therapy. Rising drug costs could affect client well-being and treatment adherence.
Insurance Reimbursement Challenges
As broader economic pressures mount, insurance companies may respond by:
- tightening reimbursement rates for mental health services to offset their own increased costs.
- implementing more restrictive care authorization requirements.
- potentially reducing mental health coverage in employer-sponsored plans if companies face economic pressure.
These changes could arrive at a particularly challenging time, as many counselors already struggle with inadequate reimbursement rates that haven't kept pace with inflation.
Direct Effects on Client Populations
Economic Stress and Increased Demand
Economic disruptions typically increase stress and mental health challenges. Research consistently shows links between financial insecurity and increased rates of anxiety, depression, and substance use disorders. Mental health counselors could face:
- growing demand for services as more individuals experience economic distress.
- more complex cases as financial stressors compound existing mental health conditions.
- clients who need services but have reduced ability to pay due to financial constraints.
Medicaid and Public Mental Health Funding
For counselors working in community mental health or with Medicaid populations, tariff-induced economic pressures could affect public funding streams:
- Economic disruption may strain state budgets, potentially leading to cuts in mental health program funding.
- Medicaid reimbursement rates, already low in many states, could face additional pressure.
- Grant-funded programs might experience more competitive funding environments if philanthropic resources are tightened.
Strategic Considerations for Mental Health Counselors
Mental health counselors can prepare for tariff impacts by:
- diversifying revenue streams beyond insurance reimbursement.
- building cash reserves to weather potential economic fluctuations.
- exploring telehealth options to reduce overhead costs.
- engaging with professional organizations advocating for mental health funding protection.
- considering sliding scale options that can adapt to clients' changing financial circumstances.
The Path Forward
While the full implementation and impact of these proposed tariffs remain uncertain, mental health counselors would be wise to monitor economic developments and their potential effects on practice sustainability. As with previous economic shifts, adaptability and planning will be key to maintaining practice viability and client care quality during potentially challenging economic times.
NBCC will provide updates on the implementation status of tariffs and potential impacts on practices.
For more background information on tariffs and implications for counselors, please see NBCC’s recent blog: https://www.votervoice.net/NBCCGrassroots/BlogPosts/7292
