Legislative Coverage: House Committees Push Health Insurance Executives on Rising Premiums, Prescription Drug Costs

Relevant Documents:
Energy and Commerce Committee Hearing Memo
Video: Energy and Commerce
Video: Ways and Means

Health care executives today faced members of two skeptical U.S. House committees examining rising health insurance premiums, hospital and drug pricing, and the role of federal policy in driving health care costs.

The House Energy and Commerce Subcommittee on Health and the Ways and Means Committee witnesses included UnitedHealth Group CEO Stephen Hemsley, CVS Health CEO David Joyner, Elevance Health CEO Gail Boudreaux, Cigna Group CEO David Cordani, Ascendiun (the nonprofit parent of Blue Shield of California) CEO Paul Markovich and two consumer advocates.

Lawmakers on both sides of the aisle criticized insurers’ role in the healthcare system. Energy and Commerce Committee Chair Brett Guthrie, R-Ky., and Subcommittee Chair Morgan Griffith, R-Va., framed the hearing as the start of a broader effort to scrutinize health insurers and key drivers of rising premiums and out-of-pocket costs. Griffith said the insurance industry is “dominated” by a few key players that control the majority of the national market. The biggest insurers manage “several facets” of the supply chain, he said, also remarking that Obamacare has increased costs and “warped incentives.”

Ranking Member Frank Pallone, D-N.J., asked Markovich what he was hearing from customers about coverage. Markovich responded that he was seeing premiums going up “quite substantially” as a result of the end of the Enhanced Affordable Care Act premium tax credits. Pallone criticized health savings accounts as a solution to rising costs, arguing they only benefit the wealthy.

Vice Chair Diana Harshbarger, R-Tenn., said the failures of Obamacare and insurance companies are to blame for the failing healthcare system. She described the failure of a system that “rewards bureaucracy over care, opacity over transparency and market power over competition.”

In the Ways and Means hearing, Chair Jason Smith, R-Mo., opened by noting that healthcare is “increasingly unaffordable” for American families. Health spending totaled $1.4 trillion in 2000, Smith said, and today it has tripled to $5.3 trillion. Smith blamed Democratic lawmakers for “exploding” premiums, remarking that prices “have only gone up” since Obamacare was introduced.

Ranking Member Richard Neal, D-Mass., began by referencing healthcare tax credits, remarking that “the reason we’re here is that [Republicans] refuse to extend these tax credits.” The Republicans have attempted “time and again” to “sabotage” the Affordable Care Act “without a competing alternative of their own,” Neal argued.

Representative Mike Thompson, D-Calif., contended that it is “clear” too many Americans cannot afford the insurance they need and asked the panel about the use of AI algorithms to categorically deny coverage. The healthcare executives denied using AI systems to deny care, citing administrative uses of the technology.

UnitedHealth CEO Hemsley testified that rising premiums are “a symptom, not a cause,” of higher health care prices and pointed to hospital services, specialty care and prescription drugs as the primary cost drivers. He argued that insurers are incentivized to restrain costs through negotiations and care coordination, citing nearly $300 billion in discounts UnitedHealth negotiated last year on behalf of employers and consumers.

CVS Health’s Joyner said the company is “addressing the fragmentation and underlying cost of care” and working to ensure members “have access to the right care at the right cost.” Elevance Health’s Boudreaux testified that affordability challenges reflect system-wide cost growth rather than failures of any single payor, noting that premiums largely track medical utilization and prices. She pointed to hospital care, physician services and prescription drugs as the largest contributors to spending growth.

Cigna Group CEO Cordani told lawmakers that health care affordability continues to deteriorate because hospital prices, specialty drugs and chronic disease prevalence are rising “far faster” than inflation, with hospital stay costs up more than 220% since 2000 and the median price of a new prescription drug at $370,000.

Ascendiun CEO Markovich testified that the U.S. health system is “bankrupting and failing” Americans and called for aggressive reforms to “fundamentally change this flawed system.”