Congressional Hearings on Healthcare Costs
CEOs from five major health insurance companies are scheduled to testify before Congress on Thursday. House Republicans plan to scrutinize rising health care costs during these hearings.
These sessions, held by the Energy and Commerce and Ways and Means committees, follow the expiration of enhanced Affordable Care Act (ACA) subsidies late last year. This expiration resulted in premium increases for millions of Americans.
Legislative Outlook
Congress currently has no immediate plans to address the expired tax credits. The House and Senate have not reached an agreement on reducing health insurance premiums. Experts suggest that the likelihood of passing related legislation soon is low due to upcoming congressional recesses.
Drew Altman, president and CEO of KFF, a nonpartisan health policy research group, commented that "Insurance companies are an easy target because they make people miserable through prior authorization review and in many other ways."
Participating Companies
CEOs scheduled to testify represent UnitedHealth Group, CVS Health Group, Cigna Health Group, Elevance Health, and Ascendiun.
Political Context
President Donald Trump and Republicans are receiving criticism from voters regarding the cost of living, including health care expenses. Last week, Trump introduced a health care plan that proposed redirecting ACA subsidy funding into health savings accounts. The plan provided limited details and was criticized for reiterating previously discussed concepts. Many of its proposals require congressional approval, raising questions about their implementation timeline and feasibility.
Trump’s plan is not anticipated to be the primary focus of Thursday’s hearings.
Hearing Objectives
Committee Chairs Brett Guthrie (R-Ky.) and Jason Smith (R-Mo.) stated that the hearings are expected to be the first in a series examining the “root causes” of increasing health care prices. The hearings will also address the ACA, which Republicans identify as a significant factor in higher health care costs.
According to a hearing document, "The ACA mandated coverage for individuals regardless of underlying health conditions and largely prohibited plans from underwriting plans at the individual level, effectively increasing health care access and affordability for the unhealthiest Americans but also driving up health care costs for healthier Americans."
Expert Perspectives on ACA
Gideon Lukens, a senior fellow at the Center on Budget and Policy Priorities, stated that the ACA resolved issues concerning coverage for individuals with pre-existing conditions and stabilized the overall insurance market. Lukens noted that prior to the ACA, insurers in individual and small-group markets could deny coverage or charge significantly more to people with pre-existing conditions, leading to wide premium fluctuations and limited options.
Lukens also highlighted the expired enhanced ACA tax credit as a key issue. He asserted that a hearing on health care affordability should concentrate on the current affordability crisis resulting from the expiration of these enhancements, adding that an extension is urgently needed to prevent further harm.
Insurer Responses
Insurers have consistently maintained that premium increases primarily stem from rising costs within the broader health care system, specifically hospital and prescription drug expenses. This year, premiums increased across ACA plans, job-based insurance, and Medicare.
Stephen Hemsley, CEO of UnitedHealth Group, stated in written testimony that insurers "compete aggressively" to offer affordable premiums, but that costs are largely dictated by the broader health care system. Hemsley's testimony indicated that rising premiums are "a symptom, not a cause," explaining that "Premium rates are based on two key factors: how much care is used and how much is charged for that care. When the price of care goes up and care activity increases, the cost of health coverage necessarily follows."
David Joyner, CEO of CVS Health, stated that his company assists families "struggling with an often confusing, disconnected system and the rising cost of health care." Joyner wrote that the factors driving these costs are understood as "Greater demand for care, growing medical provider costs, and persistently high prices for hospital care and prescription drugs."