▶ 0:15:56The committee will come to order. Before we begin, I know that most of us have felt the impact of rising health care costs and that many of us have strong feelings about healthcare affordability.
▶ 0:16:10I also know that not everyone in this room will agree on every issue, but I want to remind our guests in the audience that the chair is obligated under the rules of the house and the rules of the committee to maintain order and preserve decorum in the committee room. Disruption of congressional business is a violation of the law and is a criminal offense.
▶ 0:16:39Violations will not be tolerated and violators refusing to stop will be removed by law enforcement and subject to arrest. I ask that we all abide by the rules and be respectful to our viewers and those in the room, including members of the audience and witnesses. I appreciate your cooperation and making sure that we have a civil discussion with our witnesses today.
▶ 0:17:09I'd like to begin first by thanking our witnesses for voluntarily agreeing to appear before the best committee in today. You were in another B committee earlier, but this is the real committee. We are gathered here for one simple reason. Health care is increasingly unaffordable for American families, workers, and seniors.
▶ 0:17:38Today, the average family insurance plan costs roughly $27,000. Deductibles exceed $3,000 for individuals and as high as $10,000 for families. Obamacare premiums have climbed 80% in the last 10 years.
▶ 0:17:59And families on exchange plans are exposed to out-ofpocket maximums of over while one in five medical claims are denied.
▶ 0:18:13But it's not only in the exchanges which reflect just 7% of the population, the private employer marketplace that you all participate in and the more than 160 million Americans for whom you provide coverage is also experiencing the largest premium increase in 15 years.
▶ 0:18:37Health spending in America totaled $1.4 trillion dollar in 2000. Today, it has tripled to 5.3 Nearly one out of every $5 in our economy is tied to healthc care spending. In short, Americans are paying more for coverage than ever before while getting less peace of mind and less access to care in return.
▶ 0:19:08Ideally, insurers would help control cost and guide patients through our complex health care landscape. But today, patients are forced to navigate systems designed around insurer priorities, not patient needs.
▶ 0:19:25After paying thousands of dollars in premiums each year, families are forced to ask insurers for permission to access their own health care only to face crushing out-ofpocket cost. There is not one single American that I have met that believes health insurers are effective at lowering cost.
▶ 0:19:52This hearing is the first of more to come, examining the entire health care sector. Today, we will ask some of the largest health insurers why costs keep going up and how healthsurers should make health care more affordable for all Americans. A question that my Democrat colleagues all but ignored when they were in the majority. And here are the results. Americans are still struggling to afford just basic care.
▶ 0:20:23Health insurance premiums are exploding and patients are delayed and denied care every day. But instead of demanding answers, a senior Democrat our CEO CEO witnesses this morning saying, quote, "It's not your fault." Maybe because Democrats knows it's their fault.
▶ 0:20:48Because after 15 years of a Democrat-created health system under Obamacare, prices have only gone up, not down. They have only gone up. I'd also like to remind my Democrat colleagues that these same corporations have exploited market power and vulnerabilities in federal programs to consolidate control, steer patient care, and maximize revenue.
▶ 0:21:18Three of the largest health insurance empires rake in nearly 1 trillion dollars in annual revenue, pocketing tens of billions of dollars in profit. For this, their executives are rewarded with tens of millions of dollars in bonuses. This is all made possible by the taxpayer. 90% of insurers Obamacare revenue is taxpayer funded.
▶ 0:21:47The tax break for employer sponsored coverage is worth $4 trillion for health insurers and Medicare Advantage insurers will receive more than $8 trillion over the next decade. Yet patients, families, and seniors still struggle. They struggle to afford care.
▶ 0:22:10Health insurers claim consolidation yields efficiencies and is necessary to survive It's not survival when three health insurers control nearly half of the market and three PBMs control over 80% of drug benefits.
▶ 0:22:32Meanwhile, if efficiencies are meant to lower cost, why are insurers raising premiums, limiting competition, and shifting more cost onto families and taxpayers? To be fair, blame can also be directed at federal mandates, draconian pricing rules, and open-ended subsidies intended to expand coverage and make it more affordable.
▶ 0:22:59Over time, these policies in many cases have had the complete opposite effect. They have rewarded higher spending, complexity, and consolidation. Government health insurance subsidies have drawn bad actors to fraud like moths to a flame. Large federal programs require clear guardrails and accountability.
▶ 0:23:22Sadly, sadly, you won't hear my Democrat colleagues grapple with the existence of fraud and abuse in our health system. They just want to cover it up with more taxpayer dollars. And that's a shame because acknowledging these problems is a necessary step toward reform. Republicans are cleareyed on reforming our health care system for the better.
▶ 0:23:49Last week, President Trump released the great health care plan, his bold framework to lower costs for families and hold abusive middlemen accountable. We must restore affordability, strengthen competition, and ensure that federal health policy works for all patients and all taxpayers.
▶ 0:24:13I look forward to hearing from our witnesses about what concrete steps they will they will take to address these challenges and how they are prepared to work with the committee in the future to lower health care cost for all Americans. I'm pleased to recognize the ranking member, Mr. Nil, for his opening statement.
▶ 0:24:32Thank you, Chairman. As you might uh conclude, we have a different perspective on the issue that's in front of us. I want to thank you for the hearing. But a theme of this Congress has been Republican silence. As our colleagues on the other side rubber stamp everything that the president says and does. We're here for one reason for sure.
▶ 0:24:54And the reason that we're here is because they've refused to extend these tax When we hear that costs have gone up in the last three months, it's because the credits have not been extended.
▶ 0:25:08That's the reason on this dis we've been warned that the danger of dojes meddling with the American people's most private data and the other side acted as though we were What do you have to say now that the Trump administration who has admitted through court filings that social security data was illegally shared for the purpose of election Then there's a silence on the affordability crisis created by the president.
▶ 0:25:36House Republicans have hamstrung their own ability to act, leaving the illegal tariffs in place. That's led to price hikes as well that imperil our global relationships. Trillions of dollars in retirement savings were work were wiped out 24 hours ago and now they've been returned. That's the haphazard nature of modern governance with this administration.
▶ 0:26:02To say that the president has laid out a health care plan, that's like Elmer's glue and bubble gum. And when the speaker of the house was asked about the healthc care plan that he had put out, this is something everybody in this room can agree on. They put it out on Friday night. If there's anything that good is announced in Congress, it does not happen on Friday nights.
▶ 0:26:32We can be assured of that. Where's the accountability? There's never been a Republican alternative to the health care plan that we put out with great competence and satisfaction with 24 million additional Americans receiving health insurance. They've attempted time and again to sabotage the system without a competing alternative of their own.
▶ 0:26:54Americans are angry about prices and increases and we know the stories of coverage failures and we have witnessed record profits. Costs have to come down. If they're serious about doing this, as they've stated, let's extend and expand the ACA tax credits. Our Republican friends have no interest in strengthening healthcare or protecting patients.
▶ 0:27:18They used their signature legislation to slash $1 trillion, which will be readily felt at the end of this year as it relates to our hospitals. They've refused to extend the tax credits that we've asked for time and again, causing millions to forego health coverage this year. And they've been silent as the Trump administration wages an all-out war on public health and yes, on science as well. There's a crisis of foot. All right.
▶ 0:27:45And instead of hearing from those who are struggling, they've said, "Let's bring in the CEOs to redirect the public's attention and to avoid accountability." You should be here to testify. It's important. It costs too much. But anything to distract from the stories like the one we're going to hear from Miss Young later on today, a breast cancer survivor and a small business owner. Miss Young knows exactly what these attacks on health care mean. Soaring cost, shrinking coverage, and unnecessary stress.
▶ 0:28:15The majority had all of 2025 to act all year to prevent premiums from doubling, tripling, except they chose not to. Democrats have offered numerous avenues to save the ACA credits and to lower cost. And let's be clear about the priorities as Trump's prices include a $700 billion tenative plan to purchase Greenland. That money could be kept in health care costs that would help generations of Americans.
▶ 0:28:44that the choice is clear for [snorts] the American families and they know it. It wasn't already clear, but after that vote a couple of weeks ago, let me say something with great The ACA is here to stay. Those numbers are only going to grow as time goes on. That's because of people first legislating. The ACA transformed healthcare. It opened up coverage. Is it perfect? Hardly.
▶ 0:29:09But if we would work together, there'd be an opportunity to make it play out the way we had fully intended, rather than this constant attack on the ACA, but never having an alternative of their own. A reminder, it cap premiums at 8.5% of income and put an average of $2,400 back in family pockets. 94% of the enhanced tax credits go to households making under under Compare that to their tax bill.
▶ 0:29:3937% of their benefits go to those same The Republican signature tax law is underwater while the ACA continues to grow and it continues to rise in popularity. The sabotage is an attempt to drag us backwards. We're not going to let that happen. There are real long-standing problems in healthcare and we want to hear some answers today from our panelists as well. Insurers must step up, reduce cost, and that doesn't mean shifting burdens onto patients.
▶ 0:30:04Our focus should instead be on protecting care, expanding coverage, and bringing down costs. Working together, we can strengthen the ACA, and just as we envision, make sure it's expanded to the very members of the American family who need it. With that, I yield back my time, chairman.
▶ 0:30:22Thank you, ranking member. I will now introduce our witnesses. We have with us Steven Hemsley is CEO of United Health Group. We have David Joiner is chairman of chairman and CEO of CVS Health. We have Gell Budro um is president and CEO of Elevance Health. And we have David Cordani is president, CEO and chairman of the board of the Sigma Group.
▶ 0:30:51And we have Paul Marovich is president and CEO Yeah. Okay. Um and we have Rashanda Young is a resident of Waterlue Iowa and owner of TNK Health and Nutrition. Thank you all for joining us today.
▶ 0:31:13Your written statements will be made part of the official hearing record and you you each have five minutes to deliver your Mr. Himsley, you're recognized.
▶ 0:31:26Thank you, Chairman. Good afternoon. Um, Chairman Smith.
▶ 0:31:33Oh, thank you. Um, good afternoon, Chairman Smith, Ranking Member Neil, members of the committee. Thank you for invest inviting me to testify today. Every day, people count on our company not just to help help them when they're sick, but to help them when they're healthy as well in every stage of their lives. And we take that responsibility seriously.
▶ 0:31:57Like all of you, we are dissatisfied with the status quo and not and know we must all do better. And so we are committed to doing exactly that. And that is in part is why I've returned to United Health Group as chief executive. Our mission as a company is to help people live healthier lives and help the health system work better for everyone. Better outcomes, better experiences, lower costs.
▶ 0:32:24Achieving these goals means being candid about why the cost of health care continues to rise. The cost of health insurance fundamentally reflects the cost of healthcare itself. It is more an effect than a cause. If insurance costs are going up even as we compete aggressively against other companies, it signals rising costs of health services and drugs and or rising volumes of care activity. And it is a fact.
▶ 0:32:52Hospital and drug spending has soared at three times the rate of inflation since before 2000. We limit these pressures as much as possible. We use negotiations, data insights, better care coordination to moderate the cost of growth, improve outcomes, and protect access. And we focus on preventative care so people get care before a condition worsens or before coming sick at all.
▶ 0:33:20Insurance is the only sector in health care incentivized to keep the cost of care as low as possible while still seeking highquality health outcomes for people and helping them avoid getting sick in the first place. And it's a virtuous circle. Generally, the healthier people are, the fewer health resources they need.
▶ 0:33:41We are innovating to make highquality health care easier to find, simpler to navigate, and most importantly, more accessible and Last year alone, we negotiated nearly $300 billion in savings for our customers. Without those ef efforts, recent premium increases would easily have been twice as high. Nearly 90% of our premiums go to direct medical care, including in affordable care act plans.
▶ 0:34:12Our enterprise margins are only around 5% with Medicare, Medicaid, and ACA margins being far less than that. Additionally, we have made notable progress in areas such as value-based care, which incentivizes better care and health outcomes and simplifies the And in Medicare Advantage, which provides lower total costs than traditional Medicare with more benefits and lower overall cost to seniors, a majority of
▶ 0:34:42of whom choose it each year. We've introduced innovative health plans that offer people the information they need upfront. enabling them to comparison shop for care. These plans offer often have no deductibles and no co- insurance and members pay an average more than 50% less in out-ofpocket costs compared to traditional plans and employers offering these transparent plans are also seeing lower total costs.
▶ 0:35:12We're committed to extending these consumer centric features wherever we can to consumers have more choice, more control, more transparency and and certainty and more value overall. We're mindful of the current moment and the debates about affordability in Congress and throughout the country.
▶ 0:35:30And we appreciate the current bipartisan talks focused on ideas around affordability, transparency, and a possible short-term uh tax credit Because we want to continue to be part of the solution with respect to ACA individual plans, we will voluntarily eliminate and and rebate our profits this year for these coverages.
▶ 0:35:55I know there are aspects of our products and services that are still too confusing and complicated for people. We are intensely focused on setting a new standard of transparency, simplicity, and ongoing improvement as we continue taking costs out of the system, and make healthc care more affordable. In addition, we provided policy ideas in our written testimony intended to lower premiums, address rising health costs, and better align what we pay for health care with the rest of the world.
▶ 0:36:23I look forward to our discussion today about what more can be done to improve affordability and expand the availability of quality care. Thank you.
▶ 0:36:33Thank you, Mr. Joiner. You are now
▶ 0:36:36Right. Chairman Smith, Ranking Member Neil, and members of the committee. Thank you for the opportunity to share our perspective on the drivers of health care costs and the market and policy situations needed to address them. CVS Health engages with millions of Americans every day in their communities, helping families struggling with an often confusing and disconnected system and the rising cost of health care. What's driving these costs is understood.
▶ 0:37:01Greater demand for care, growing medical provider costs, and persistently high prices for hospital care and prescription drugs. Every day, we are addressing the fragmentation and the underlying cost of care. that starts by making care for Americans accessible and affordable and most importantly simplifying the patient experience at every point. Our 300,000 employees across the country work every day to meet this moment.
▶ 0:37:26CVS Health supports the committee's goal of addressing rising medical cost and we want to be a partner in addressing these challenges. We are working to ensure our members have access to the right care at the right cost. And we are we are expanding low-cost primary care, covering preventative care at no cost to patients, and offering free virtual care to eliminate the barriers to access.
▶ 0:37:49We are leading the industry in developing new solutions to lower cost, investing in technology to identify health problems before they become serious and tailoring treatment to individual patient needs. Today, I'll share four ways we're making care more affordable and accessible. First, we're expanding access to coverage that rewards providers for keeping patients healthy. Second, we're reducing administrative burdens.
▶ 0:38:12So, instead of filling out forms, doctors can actually spend the time caring for patients, all while driving lower administrative cost of care. We know that denial care is a major frustration for patients and their doctors. So, we continue to reduce the number of claims subject to prior authorization and by independent measures, we have the fewest number of services subject to it. When we do receive an authorization request, 77% are approved in near real time, and that number continues to grow.
▶ 0:38:40For medications, nearly half are approved immediately, and for others, the average approval time decreased from 3 hours in 2024 to just 34 minutes today. CVS Health's bundle approach now gives providers one approval, covering medical procedures like repeat imaging and medication for specific conditions. for patients undergoing breast cancer treatment.
▶ 0:39:02That means a single authorization for an entire series of Third, we're using competition to address the rising drug cost. We're aggressively promoting the use of bioimilars. We now have the vast majority of members paying zero dollars out of pocket for these once pricey drugs and has generated more than $1.5 billion in savings for our customers. And fourth, we're building a modern consumer health care platform that we will open to plans and providers. For patients, it's simple.
▶ 0:39:33One open app that allows them to own and manage their own healthcare. For 17 million monthly active app users will schedule appointments, refill prescriptions, access preventive care, all in one place with the goal of helping them stay healthier at lower cost. for the health care system. It's a shared foundation we believe will make care more coordinated and affordable. I took this role 15 months ago because I wanted to help shape the future of healthcare in this country.
▶ 0:40:03I'm proud of the work we've done so far to simplify the healthcare experience and to make care more affordable and accessible for American families. I know there is much more to do. It requires health plans, providers, employers all working together. That's why we support reforms that increase transparency, competition, and innovation, particularly among hospitals and the pharmaceutical supply chain.
▶ 0:40:26We encourage policymakers to preserve flexibility for employers to offer benefits that meet their workforce needs and to avoid policies that reduce competition or add bureaucracy. We want to work together first to explore solutions that bring younger and healthier people into the risk pools. Secondly, expand the definition of preventative care to services that keep people healthy and out of the hospital, allowing people in high deductible plans to access these services in their pre-deductible phase.
▶ 0:40:56Third, address the bad actors who are gaming the no surprises act, centralizing eligibility, automating processes, and increasing oversight can address this abuse. Fourth, accelerate the interoperability of health records to reduce the friction and to help patients manage their And and five, pass the ECAPS legisl legislation which is allows the pharmacist to practice at the top of their license and receive Medicare This will benefit every pharmacy in the country while
▶ 0:41:27improving access for patients and reducing cost. We welcome the committee's partnerships in these efforts as we continue to work to make healthcare more affordable for all Americans. Thank you and I look forward to your questions and to the additional
▶ 0:41:40Thank you, Miss Budro. You are now
▶ 0:41:43Thank you, Chairman Smith, Ranking Member Neil, and members of the committee. I'm Gail Budro, president and CEO of Elevance Health. For over 80 years, we've served individuals, families, and communities. I appreciate the opportunity to be with you today on an issue that is weighing on households across the country, healthc care Families are frustrated by the rising cost of health care.
▶ 0:42:13And they're right to be. Rising premiums and out-ofpocket costs strain household budgets and cause people to delay care. This is personal and for many families, it's frightening. We can all do better. Americans want solutions and we're taking concrete steps to deliver them.
▶ 0:42:38Our responsibility is to provide coverage people can afford, provide clear information in plain language about coverage and costs, and make timely decisions. This includes negotiating for fair prices that affect premiums and out-of-pocket costs. Our role isn't just to explain costs.
▶ 0:43:06It's to act and it's to make health care easier to navigate for patients and Every redundant step and paperwork delay adds cost and frustration without improving care. Prior authorizations apply to about 3% of our claims.
▶ 0:43:28And since January 1st of 2024, we've removed more than 400 services from prior authorization requirements. For what remains, we're expanding electronic prior authorization to reduce paperwork and speed decisions and using technology, including AI, to handle routine steps and move information faster while clinical judgment stays
▶ 0:43:58in human hands. The United States now spends more than5 trillion dollars a year on healthcare. Health insurance premiums are primarily shaped by medical care and drug costs and where care is delivered.
▶ 0:44:14When the prices charged for care rise, premiums and out-ofpocket costs rise, Hospital spending increased by nearly 10% in 2023 and again in 2024, the fastest rate in more than three decades, outpacing inflation and wage growth.
▶ 0:44:40Prescription drug spending grew nearly 8% in 2024 and now represents a quarter of what employers spend on healthcare. Costs also rise when the same service is build at a much higher price in a hospital setting than in a physician office or urgent care.
▶ 0:45:04We're fraud, improper billing, and administrative requirements also add costs that ultimately show up in We're focused on practical solutions that lower cost and make health care easier to navigate.
▶ 0:45:22Our approach of coordinating medical and pharmacy benefits is helping employers lower medical and prescription drug costs, saving some employers up to $212 per person per month, underscoring our whole health approach. We also promote preventative care so problems can be caught early.
▶ 0:45:47And we work with doctors and hospitals to help patients get the right care at the right time and in the right setting. For example, our concierge care oncology program has lowered chemotherapy related hospital admissions by more than 60%.
▶ 0:46:08We're committed to being part of the affordability solution because when health care is too expensive, people delay care, employers struggle to offer coverage, and families lose peace of Keeping care within reach requires common sense reforms that address root causes such as hospital price growth, rising prescription drug prices, unnecessary
▶ 0:46:39paperwork, and lack of With discipline and partnership, progress is possible. Thank you again for the opportunity to be here. I look forward to your questions and to working with you to make health care more
▶ 0:46:59Thank you, Mr. Cordani. You are now
▶ 0:47:02Chairman Smith, Ranking Member Neil, and members of the committee. Thank you for the opportunity to testify in front of you today on one of the most pressing issues facing American families and employers, which is the underlying cost of healthcare. My name is David Cordani. I serve as chairman and chief executive officer of the Sigma Group. As a global organization, we provide health services largely through employer sponsored programs and unions.
▶ 0:47:27And we bring together health services that we seek to reduce overall costs, increase quality, convenience, and help to make healthc care easier to navigate. And while I'm personally proud of the work we've done, we recognize that there is more to do in the future. At a high level, I'll identify three major categories where we see opportunities for further improvement.
▶ 0:47:48First, we must intensify our focus on the needs of patients earlier in the care journey, especially programs that prevent chronic disease in the first place and support long-term health. Second, we need to better align incentives for providers and pharmaceutical manufacturers that reward outcomes from interventions, not just the volume of interventions consumed. And third, we must further leverage competition, which is proven to lower costs in America, improve overall value for Americans.
▶ 0:48:19I joined Sigma over 30 years ago, and over that time, I've seen amazing advancements in medical care. But I've also seen costs relentlessly rise at a much faster rate than inflation. Prescription drug prices alone have risen more than three times the rate of inflation over that time. And many Americans, as we know, feel that pressure every day, which is why this discussion is so important. Now, the US health care system generally provides rapid access to high-quality care. But access is only meaningful if it's affordable.
▶ 0:48:48And an affordable system requires health plans, hospitals, drug manufacturers, physicians, and policy makers to work together, putting the patient at the center. At Sigma, we're focused on expanding access to preventative care and coordinating services around patients needs and increasing transparency to enable people to understand how their healthcare dollars are being spent. Today, our system overwhelmingly pays for care after people become sick.
▶ 0:49:14Prevention and sustained engagement are still the exception in the overall cost equation, and we know a better approach works. For people living with chronic conditions, for example, we've redesigned coverage and care models that support prevention and treatment adherence. This means lowering or eliminating the costs altogether for life-saving medications. It means coordinating medical, pharmacy, and behavioral health care programs. And it means giving patients real-time support to health programs to help them avoid complications.
▶ 0:49:45But expanding these solutions requires us to confront the underlying cost drivers as well. For example, since 2000, the cost of a hospital stay has grown 220%. In 2024, the median price of a new pharmaceutical launch in America was That's up from $2,000 20 years prior, or a 12,000% increase.
▶ 0:50:10These prices put some of these critical treatments out of reach for families and employers, especially when competition is delayed or blocked. We also need to recognize there are broader forces at work. Our population is aging and more Americans are living with chronic conditions. This increases the underlying costs and therefore the premiums. Just as for example, a rising fuel price on the economy would raise prices across a broad economy, at Sigma, we work tirelessly to be a counterweight to those pressures.
▶ 0:50:40For example, our ability to drive competition amongst generic drugs has led to some of the lowest prices for generic drugs in the world. And where we could effectively harness competition with brand drugs, we're able to drive meaningful savings for patients. For example, we've been able to cap price of insulin at $25 a year in in a program starting in 2019. For example, we provide bioimilars to high-cost medications at no cost to patients.
▶ 0:51:09And we are further modernizing prescription drug benefits to lower the cost at the counter by leveraging greater transparency. This focus on solutions matters when people at their most vulnerable. A cancer diagnosis, for example, we know is devastating for the patient and the family. We seek to build care models that eliminate out-of- pocket costs and connect patients to top quality specialists supported by our focus on rewarding value over volume. Our goal is simple, the right care at the right time without financial stress.
▶ 0:51:39We recognize that no company or single sector could solve this alone. As such, we stand ready to work with Congress, this committee, and the administration, and partners across the health care system to further strengthen the US health care system, focusing on prevention, paying for value versus volume, and further aggressively leveraging competition for the benefit of patients. Thank you, and I look forward to your questions.
▶ 0:52:01Thank you, Mr. Marovich. You're now
▶ 0:52:04Thank you, dear Chairman Smith, Ranking Member Neil, and members of the committee. Thank you so much for the opportunity to testify before you today. My name is Paul Marovich. I am president and CEO of Ascendian, a nonprofit and parent company of Blue Shield of Our health care system is bankrupting and failing us. It's way too expensive, too impersonal, doesn't cover everybody, achieves inferior quality outcomes relative to other countries, and is mistrusted by too many Americans.
▶ 0:52:35This is unacceptable. We are all mortal, which means we will all need to use the health care system. When our loved ones need to do so, we want them to be able to afford it and then be treated the way they deserve to be. Our nonprofit organization describes this as a health care system that is worthy of our family and friends and sustainably affordable for everyone or simply worthy of us.
▶ 0:53:00We're a long way from that ambition right now because there's too many times when the participants in the system, health plans, hospitals, physicians, pharmaceutical companies, and others put patients ahead of or profits ahead of and fail to recognize how complex, inconvenient, and inefficient our current system is. This leaves consumers, employers, and the government financially stressed and frustrated with the inconsistent and impersonal service that they receive.
▶ 0:53:31The good news is we can fix this if we have the collective courage and conviction to do so. It starts by recognizing that we must fundamentally change this flawed system. And we must take accountability, all of us, for doing so. We don't need more explanations for why healthcare costs so much or more attempts to blame others for the problems.
▶ 0:53:55We need to enact bold reforms as soon as possible to force everyone in the health care system to deliver greater health to Americans more efficiently. Specifically, there are four critical things we need to do. First, ensure every American has a comprehensive realtime digital health record, which will help personalize their health and dramatically reduce administrative costs.
▶ 0:54:23Second, break the do more, get paid more fee for service model and start paying for outcomes. Third, make prescription drugs accessible and affordable by eliminating kickbacks in the form of rebates, fees, and spread pricing. And finally, put the entire health care system on a budget. We need your help to make this a reality.
▶ 0:54:48While it's possible for the healthcare industry to adopt changes on its own, based on my experience, including 13 years as a CEO who's been trying to drive change, I've come to the conclusion that the system will not fix The health care system needs some tough love and clear direction. And I believe the American government is in the best position to provide both.
▶ 0:55:12I'm proud of the many things nonprofit Blue Shield of California has done to try and address this healthc care cost crisis. For example, to my knowledge, we are the only major health plan in the country to have voluntary ple voluntarily pledged to cap our profit at 2% of revenue and given back more than $800 million to our customers and our community.
▶ 0:55:35As a result, actively supported legislation that allows the federal government to negotiate directly with pharmaceutical moved to a new pharmacy distribution model that does not rely on a pharmacy benefit manager. And finally, supported a statewide office of healthcare affordability in California, which has put the California industry on a budget and has the authority to enforce it. But in the spirit of accountability, we have not done enough fast enough.
▶ 0:56:06The average cost of a family health insurance policy, as the chairman pointed out, is now $27,000 or the cost of a new car every year. I and we are a part of the problem with the unaffordable, highly flawed health care system we have today. But I'm committed to doing our part to help fix it. We have an affordability crisis. Our health care system is broken, but we are not.
▶ 0:56:34On behalf of Blue Shield of California, I'm ready to work together to create a system that is truly worthy of us. Thank you.
▶ 0:56:42Thank you, Miss Young. You are now
▶ 0:56:46Good afternoon, Chairman Smith and Ranking Member Neil. Thank you for the opportunity to testify at this hearing on the impact of rising health care costs on patients and families and the role that health insurance plays in healthcare affordability. Today I'm speaking as an individual, as a small business owner, and as a widow, someone who does not have the option of choosing an employer sponsored plan.
▶ 0:57:13That distinction matters because for millions of self-employed people, entrepreneurs, and small business owner, the Affordable Care Act marketplace isn't a backup option. It's the only option. I run a small health and nutrition store and I've got employees who I'm also responsible for and taken care of. There's no HR department to help me navigate benefits. The ACA marketplace and the enhanced premium tax credit are my safety net.
▶ 0:57:42In 2025, my goal plan health insurance premium was $94 per month. This year, upon the expiration of the enhanced tax credits, that same plan would cost me $592 per month. That's a difference of $498 every single month. Over a year, that's nearly Balancing business expenses and personal needs leaves little room in my budget.
▶ 0:58:09I simply couldn't afford this new rate and was forced to drop down to a bronze plan to maintain my coverage at a similar monthly premium. In doing so, my deductible went from 1,500 to 7500. My out-of- pocket maximum skyrocket to And every step of the way, I'm on the hook for additional expenses. I have to pay 50% co insurance instead of 25%.
▶ 0:58:37A regular doctor's appointment that cost me $15 last year will now cost me50 or $100 if it's a specialist. I want to make something clear. This isn't about luxury coverage. This is about access to basic and essential life-saving and sustaining care. Like many Americans, I experienced an unexpected health crisis that solidified why going without health insurance is not an option. In 2024, I was diagnosed with breast cancer.
▶ 0:59:07I was stunned. And the journey to becoming and remaining cancer-free is not easy, but it was made easier because I knew I had highquality health insurance to fall back on. The premium tax credits brought me peace of mind, allowing me to focus on my health during one of the most difficult times of my life.
▶ 0:59:28Before the ACA, people with pre-existing conditions were often priced out of coverage or denied Even today, without the enhanced premium tax credit, coverage may technically be available, but it's not often affordable or accessible. A $592 monthly premium is simply out of reach for millions of working Americans, especially entrepreneurs, gig workers, caregivers, and those with fluctuating incomes.
▶ 0:59:58The enhanced premium tax care credit is what bridges that gap. It's not a handout. It is a smart investment in public health, economic stability, and It supports people who are working, people who are building businesses, and contributing to our communities. It makes a huge difference to those individuals and their families because also for and it's also for our whole health system.
▶ 1:00:26When people can afford coverage, they seek care earlier and they manage their chronic conditions better. They avoid costly met emergency room visits and they stay healthier longer. As members of this committee and your colleagues in Congress debate the future of health coverage and care, I urge you to remember stories like mine. Because behind every line item in every budget projection is a real person. often a small business owner doing the math at our kitchen table asking, "Can I afford to be insured?
▶ 1:00:57Can I afford not to be insured? Can I afford to keep my business going if I get a medical diagnosis or emergency?" For me, fortunately, the answer to the first and last questions were yes because of the ACA enhanced premium tax credit. I hope you will continue to work to make that true for millions of Americans just like me all across the country. Thank you. Thank you. I want to thank you all again for being here. We'll now move to the question and answer session.
▶ 1:01:26Um uh by a show of hands, my first few questions. Um it would be faster for to to know what's going on, but the first question is which of your companies own or control a health insurance division? Raise your hand.
▶ 1:01:44Please keep your hand up if you also employ healthc care providers or own clinics, specialtyarmacies or any other kind of medical practice or Please keep your hand up if you also own or control a pharmacy benefit manager.
▶ 1:02:11And please keep your hand up if you lead a publicly traded company at which you have a legal responsibility to maximize shareholder value. So we've we've established on the record that the largest health insurance companies are not just insurers, they are also medical providers and diagnosing and deciding treatment for patients.
▶ 1:02:40They are also PBMs, another form of middlemen managing drug They are increasingly controlling every aspect of our health care system. This level, this level of consolidation helps explain why Americans feel very anxious about their health care because the coverage they have, the drugs they rely on, and the doctors they can see are
▶ 1:03:10controlled by the same corporate This level of control and consolidation is supposed to lead to greater efficiencies, lower premiums, and lower But that's not what has occurred. In all of our districts, we are instead hearing from individuals who are being denied coverage for needed treatments.
▶ 1:03:34As just one example, a breast cancer patient from my home state in Missouri needed a shot to prevent against infection prior to her chemotherapy, but was denied by one of your companies and only only received approval for the care after she already contract contracted an infection and was admitted.
▶ 1:04:04to the hospital. With the rampid practice of treatment denials, as much as one in every five services for Obamacare plans, and rapidly, rapidly rising costs coming from your hands, this is a yes or no question for each of you. Do you all believe you are doing what you need to do to lower cost and protect coverage of care? Mr. Hemsley.
▶ 1:04:33Um, uh, chairman, I think we are doing an amazing job, uh, in terms of, uh, addressing that, but it is not enough. We could do more, and I think we have to approach the totality of the system with that point of view.
▶ 1:04:48Mr. Joiner,
▶ 1:04:50um, I I absolutely believe we're doing everything we can do to make care more affordable and simple. It's what part of our purpose as an organization and I have 300,000 employees that are committed to doing the same.
▶ 1:05:04Congressman, we have two core priorities. To reduce the cost to care for the people we serve and to improve the simplicity in how to do business with us. We though believe that everyone there is no simple solution and we need to work together with everyone in the health ecosystem to do better. As I
▶ 1:05:22Mr. Cordani,
▶ 1:05:24Mr. Chairman, we largely serve the employer sponsored market in the United States and most of that business is self-funded or fully transparent and we work every day to reduce the cost of care. Additionally, we just launched a new pharmacy benefit offering that is fully transparent, no rebate, no spread pricing that will further improve affordability. So, we work every day to lower the overall cost of health care or deflect the medical cost trend on behalf of our employer clients.
▶ 1:05:49Mr. Marovich,
▶ 1:05:50no. Because it just costs too much. Thank [snorts] you. Um, last week, President Trump announced the framework for what he called the great health care plan with a major focus on restoring trust in the American health insurance system, requiring transparency in prices, and justifying claim denials, disclosing what premium dollars are actually spent on, and holding middlemen
▶ 1:06:20accountable for shady kickbacks and simply having you all communicate to patients in just plain English what they are paying for insurance why and what coverage they get for the rather for that rather than hiding important details in the fine print.
▶ 1:06:43This mirrors and builds on what efforts Republicans in Congress have taken to lower cost and increase transparency for patients. This is a yes or no question for each of you. Will you commit to supporting legislation that supports the president's calls to truly bring transparency to health insurance, will crack down on fraudulent enrollments, and hold insurers accountable for their
▶ 1:07:13excessive prior authorization and care denials. Mr. Himsley? Um chairman, we applaud the president's um interest in this and focus um the ideas put forward um could be part of uh meaningful change and solutions. We are aligned with the themes of those on transparency, um of addressing cost and improving the system.
▶ 1:07:40So we'd be supportive of that as part of a broad-based bipartisan solution to move forward in healthcare.
▶ 1:07:46Mr. Joiner.
▶ 1:07:48Yeah, we share the president's and this committee's goal in reducing healthc care, simplifying it using plain English in which to uh to interact with the uh with the patients. So yes, we are very much aligned with with this committee as well as with the president,
▶ 1:08:03Miss Budro,
▶ 1:08:05chairman, we support transparency. We also support many of the tenants of the president's uh policies. We encourage us to make sure transparency is also available through hospitals and we have a priority across our company to simplify patients ability to understand their coverage as well as the costs.
▶ 1:08:25Mr. Cordoni,
▶ 1:08:27we support improving transparency, expanding choice and aligning incentives. So yes,
▶ 1:08:32perfect. Mr. Marovich,
▶ 1:08:34Mr. Chair, I support all the principles that you outlined and I particularly want to point out that in my opening statement, I referred to kickbacks as an
▶ 1:08:41I did. I appreciate your testimony, Mr. Marovich. Um, and your uh frankness. Um, so clearly we um we aren't all doing um everything that's possible to lower cost and and cost for patients and take accountability. Um, and so by by saying that you would support this reform, you clearly are admitting that there's a problem. We all know there's a problem.
▶ 1:09:12That's why we're here. It's a shame it's taken a congressional testimony for you all to commit to putting patience over profits. Um, but we can do better and we have to do better for the American taxpayer, the American individual who is just trying to get by to put food on their table, clothes in their backs, and gasoline in their cars. I recognize the ranking
▶ 1:09:36Thanks, chairman. Thank you. Uh, so since you raised the issue, Mr. Marovich, uh, I want to give you some In Massachusetts, 98% of the adults in Massachusetts have health insurance. of the children in Massachusetts have health insurance and 99.7% of the the seniors in Massachusetts have health insurance. So why did that happen?
▶ 1:10:05It happened because of a Republican governor, a Democratic congressional delegation, a Democratic legislature, the Chamber of Commerce, and the AFL CIO who got together and said, "We've got to do something about the cost of health insurance." And by the way, what I've just described polls in the 70s in terms of satisfaction because we decided to work together.
▶ 1:10:30Not to ridicule, not to scorn, not to mock, but to make it work for the American people and the residents of Massachusetts for sure. So, I want to ask Miss Young a question. You're here telling a pretty compelling story. It's becoming all too common for working Americans across our great country. You're a small business owner, breast cancer survivor, and someone who is struggling, as you noted, with rising health care cost. And thank you for mentioning part of the glue that held the ACA together.
▶ 1:11:00We ended preexisting as part of the negotiation. How about keeping 26 year olds on their parents' health insurance, which was a major issue for Americans across our country? your testimony detailing the outofpocket costs increases that you're facing, shifting to highdeductible plans because our Republican colleagues refuse to extend these enhanced credits.
▶ 1:11:27You now have to pay $7,500 out of pocket plus premiums before insurance starts to cover your care. Almost 40% of the Americans in our collective family don't have $400 in their bank account for an emergency and they're struggling to pay their bills every day while facing these rising costs and then trying to save for retirement.
▶ 1:11:51So the question, what does this cost increase mean for you that you now have to pay insurance premiums and $7,500 of cost before your insurance starts paying for care? because you now have to pay for more health care. How does that affect your other financial like that important matter of saving for
▶ 1:12:11It affects them greatly. Uh because obviously as a small business owner, I have to save for my own retirement. And you start to weigh, do I pay for more health insurance or do I pay for retirement? Either way, I've got to I've got to make sure that I can take care of myself. And so I'm able to do both by having a higher deductible and out-of- pocket expenses. But it it's just a tough choice.
▶ 1:12:38You start to think about the quality of food that you're going to get because something has to get cut. Unfortunately, when you start to think, can I have the same quality of food, it's a bad day. It's a bad situation.
▶ 1:12:50I can safely assume you're in favor of extending the Affordable Care Credits.
▶ 1:12:56Absolutely. Yes.
▶ 1:12:57Thank you. I yield back my time.
▶ 1:12:59Thank you, Mr. Buchanan.
▶ 1:13:02Thank you, Mr. Thank Thank you, Mr. Chairman, and thank uh our witnesses for being here today. Um, one of the US is spending more, we touched on this, more dollars on healthcare, and we're getting sicker as a nation. So, numbers and things I've looked at, we're on a list of 66 and crazy different lists. So, uh, I just want to mention in fact CMS reported last week that we spent 5.3 trillion. We touched base on a 7% increase.
▶ 1:13:31Our expensive health care system is reacting to illness instead of prevention. And that's kind of where I come from. I really do believe that we've got to prevent things before they start. They said 95% pick a number of cancers. If you're caught in the early stages, you don't get into the terrible expense and all the things that go along with it. Our incentive system is backwards.
▶ 1:13:55I was in business for 30 years before I got here and one of the most critical thing you could you could do is set up the right pay plan with your employees and everybody else. That right pay plan should be making people healthier and so they don't you don't want to have benefit because someone's diseased and they come in more often. You want them healthy and go out. So we got to set up the proper incentive.
▶ 1:14:17Our incentives uh incentive systems are backward fee for service is set up to pay the number of services provided not the outcomes and the value to the patient. Premiums uh out of pocket expenses have risen incredibly in businesses. As I mentioned I was in business for 30 years had my last company a thousand employees and I can tell you one thing setting up the right pay plan as I mentioned earlier is really critical to that.
▶ 1:14:44But in doing a a round table with about 30 of our smaller businesses in our community, I wanted to see where everybody were at on various issues because I also at the time this is a while back chaireed the chamber. And I got to tell you, I was it was unbelievable. And in that room out of 30 people how many had little or no insurance because they couldn't afford it. One couple told me they was paying 3,000 a month. They own an Italian restaurant. 36,000 a year. How do those numbers work?
▶ 1:15:13So business, especially small business, uh we need to do more. Uh it's just got too too expensive. We must do better for the taxpayer. And the the best uh way to bend the cost on the the curve in my mind is is affordability, is trying to get down where it's reasonable. But one of the things I've always talked to people about, you've got to be also we got to encourage people in education, other things be to be the uh CEO of their own health care.
▶ 1:15:41That's really critical because you can't, you know, if you I always tell my friends or people if they're open-minded, not everybody's open-minded, get a physical every year in January. Start the year off right and figure out where you're at. Make some tweaks and adjustment, but we've got to get into prevention. I've heard a lot of different discussion, but to me, at the end of the day, it does it cost you, you know, you hear people getting cancer in their 40s and 50s and 60s. A lot of that again is preventable. So, with that, let me just uh ask uh Mr.
▶ 1:16:10Joiner, your thought. One of the things we were talking about is affordability. What's your thoughts on that? What were you suggesting? What can we do more to make everything more affordable?
▶ 1:16:21So, Congressman, I have 100% aligned with the way you think about the health care challenges today. The health status of our population is not great. So the prevalence rates of heart disease, type two diabetes and and certainly the the c the oncology cases that you mentioned, many of these are preventable. So we are very much focused.
▶ 1:16:43Someone I'll just mention quickly told me that 50% of people have their first heart attack never see the next day. I walked out of that room and I thought to myself, this is a while back. I thought to myself, you know, that I I want to be on that side of it and that's what got me into the physical. But go ahead.
▶ 1:16:58Yeah. So we have a we have a prevention problem and wellness problem, but we also have an engagement problem. We have to get the population to engage in their um in their health. So that's where you structure incentives. And you also use technology to help the the member andor the patients access their health.
▶ 1:17:14How can you get your patients more engaged or have you had luck doing have you had luck doing that? Because that's really critical and get them to buy in. Not everybody it will, but there will be some that might. So, we launched a new um digital app over the last last year and we believe that it is one turnkey solution that allows them to now manage all their health in one spot.
▶ 1:17:37The challenge today only got about 25 seconds. Let me mention also we're promoting the idea of real food. A lot of this food is highly processed. There's no nutritional value. We've got to do everything we can for our kids. kids today they're claiming the the obesity or whatever is at 20% where maybe used to be three or 4%. So we've got to do more in that space as well. So what's your thoughts on that?
▶ 1:17:59I I think it's the whole health. So I think it is food and nutrition. I think it's diet and exercise. I think it's
▶ 1:18:05what are you doing about it with your
▶ 1:18:06Um so today we u we want to align with the provider. So we set up a structured relationship so that the providers share in the outcomes. This is part of what we were talking about in terms of valuebased care. But ultimately it's when everybody on the care team is working towards the same common outcome which is improving the health status of um of the patients helping them navigate and um deal with the complexity of the health care system and we've actually made a difference you know our the companies and and the businesses that that we run and operate we've actually been able to lower cost and improve the overall quality
▶ 1:18:36of health care for those
▶ 1:18:38Thank you. Appreciate my time though.
▶ 1:18:40Thank you Mr. Dogget.
▶ 1:18:41Thank you very much. Thank you for your testimony. Uh just as there's no miracle drug to cure every ailment, uh there is not a panacea to high health care costs, you're part of the challenge of addressing that, but hardly all of it. And how we uh end a system that cost Americans two to four times more than people in other developed countries for their health care. And yet we end up sicker with higher rates of obesity and chronic disease.
▶ 1:19:08Uh, I say it you're only a part of the challenge because while there's much talk of fraud, fraudsters take advantage of an inefficient system and lacks oversight by the Trump regime. more concerned with yelling fraud. As we have heard repeatedly here and on the floor of Congress, the regime and their enablers have been using fraud as an excuse for a cruel agenda of cutting access to health care for millions of Americans and blaming insurers.
▶ 1:19:36In blocking the affordability credits, Republicans pointed to a recent GAO study on fraud, ignoring the fact that the fraud, which was reported, was documented as committed by hundreds of insurance brokers, not a mother out there seeking care for her sick child. Yet, it is the child that suffers when this GOP agenda of yelling fraud really means replacing Obamacare with nothing care.
▶ 1:20:03I renew the challenge that I have made here and in the budget committee that if these Republicans are the least bit interested in preventing fraud, look beyond these insurance executives, instead get in a witness from the administration which you have feared to provide in public session like Dr. Oz who can explain perhaps why the Trump regime reinstated 850 insurance brokers that had been suspended for wrongdoing last fall by the Biden administration.
▶ 1:20:33Let's hear whether CMS has issued a single civil monetary penalty for fraud. Whether they are holding insurance brokers accountable in any way. While Trump won't offer a penny of help to families struggling with marketplace premium hikes, he continues to pardon health care fraudsters uh and deny their victims restitution. It's essential that the Senate pass our Democratic bill to restore the tax credits.
▶ 1:21:00And the claim that he has some great health care plan is as phony as the dimensions of his plan over the last decade or so. This is simply a plan to shift money to insurers from one account to another. Uh he can claims he can give the money directly to the consumers. But a company like United, Mr. Helmsley uh is not limited to Obamacare policies. You have high deductible plans that you sell with health savings accounts.
▶ 1:21:31Uh you have uh certainly uh Medicare advantage plans as many of you have which I understand is perhaps the most profitable sector. Uh and uh taking the money out of affordable health care credits and shifting it there uh is not going to change the status necessarily of insurance companies, but it will certainly hurt consumers.
▶ 1:21:52And if you want a real example of waste and abuse, I think it is forcing Americans to pay for Medicare Advantage premiums for military veterans with the Veterans Administration actually providing the medical care. Yet, the VA is prohibited by law from collecting a penny from any of your companies. That's a great business. An insurer collects the premiums, but the VA at taxpayer expense provides the care. Unfortunately, my bill put a stop to this nonsense.
▶ 1:22:20like other anti-fraud bills I have filed in this committee cannot even secure a hearing. Mr. Helmsley, on a more constructive note, I would ask you one very narrow question about a distinguished surgeon in my community of Austin. Dr. Elizabeth Potter and the Red Bud Surgery Center are located there in Austin. She's been unable to obtain in network status with United Health.
▶ 1:22:45She spends hours negotiating authorization to perform surgery at nearby hospitals which lack the uh level of uh equipment and safety that she could provide at a fraction of the cost of the hospital. I know you have many responsibilities. I would simply ask you to commit to personally investigate this situation, give you the your folks the name and address and engage in good faith negotiations and report back whether this matter can be resolved.
▶ 1:23:13We will do that. representative.
▶ 1:23:15Thank you very much and thanks to all of
▶ 1:23:18Mr. I would ask Mr. Chairman unanimous consent to put into the record uh my request to Dr. Oz to answer these questions about the fraudsters which he's been unable to answer for months.
▶ 1:23:29Without objection.
▶ 1:23:31Thank you.
▶ 1:23:31Thank you, Mr. Smith.
▶ 1:23:33Thank you, Mr. Chairman. [clears throat] Certainly, thank you to our witnesses for voluntarily appearing here today. I uh I think we're having conversations that need to be had and and I hope that we can work together for constructive solutions that we can share thoughtful ideas that we can recognize that I think everyone on this dis by the people as it relates to healthcare. There are I don't have to tell you there are glaring problems that that we face. Uh incidentally, Mr.
▶ 1:24:03Joiner, thank you for uh mentioning my bill, ECAPS, ensuring community access to pharmacy services. I think that's one way that we could increase access, utilize the expertise of highly trained medical professionals uh more efficiently and effectively and certainly as it would benefit seniors and and that access both rural and urban. And uh [clears throat] I think of just the you know various descriptions of the problem at hand here of high premiums.
▶ 1:24:34Now I had someone uh describe the situation of of the subsidy as as we're shoveling government subsidies to paper over a problem. That's true that that it it really I think conceals the problem at hand. I mean, I think back to before before the ACA, the so-called Affordable Care Act that we had the high-risisk pool for those with pre-existing conditions.
▶ 1:25:02And now that seems like a bargain compared to what the individual market is having to pay. And there were signs as all of the debate was happening in the run-up to the so-called ACA there. There were warnings that we better be careful in what this is going to do to the individual markets. And here we are now.
▶ 1:25:22We've we've been learning a lot over the last uh couple of years especially, but uh I'm concerned about just the the abuses of the system and perhaps whether someone want might want to call it fraud, someone might want to call it unintentional enrollment, the results are the same. And you know, we know that there's a a large number of folks who have recently been eligible for zero premium uh uh plans.
▶ 1:25:53And recent studies have shown that in 2024, nearly 12 million ACA enrolles, up to 35% of all enroles in ACA did not log any claims or use their plans at all during the plan year. Now, I would like to think that there was absolutely no need, although I think it's genuinely a good idea to at least get an annual physical, but I'm I'm genuinely curious, Ms. Budro,
▶ 1:26:21do we assume that that many folks, 35% of those who are enrolled are are just so healthy that they don't they don't need to see a doctor at all?
▶ 1:26:30Well, thank you for the question, Congressman. As we think about this overall um you know insurance is used for protection as well as use. So our numbers I share your concern about potential fraud and catching that and making sure that we have integrity in the eligibility process. Our numbers show that it's roughly around 15% in total that we get our enrollment from the exchanges both federal and state.
▶ 1:26:59the state exchanges we work directly with and do a bit better. But again, we share the issue of integrity, marketplace uh um integrity around ensuring that eligibility has um people eligible for these are in those programs as well as we think a stable program requires continuous coverage, requires us to be able to deliver preventative care. Uh and so they're all those are all really important pieces of keeping
▶ 1:27:26and certainly the the the fundamental concepts of pulled risk are are important and and I hope that we can have a a good uh conversation about that too. Now you know with all of these debates and various uh data points uh circling I I did come across some data here that uh uh Mr. Cordani I I uh am wanting I'm turning to you to perhaps offer some background and explanation.
▶ 1:27:51Now, it it seems apparent that in 2024, your company, obviously, as most did, took a rate increase. I think one state um under your plan saw a 40% premium increase.
▶ 1:28:05Um now, in the earnings call on January 30th, 2025, uh you said that in 2024 that you returned 8.6 billion to shareholders through dividends in share that seems glaring glaringly imbalanced in terms of what needs to be done for ultimately healthcare uh and and certainly shareholder
▶ 1:28:35priorities. How how can you can you give us some background there and and I mean it because on the surface it it seems like shareholders receive great benefits certainly at the considerable expense of
▶ 1:28:48Congressman, thank you for the question. Um, two different points. One, I think your initial comment is relative to the exchange business in the year you identified. The year prior to that, we lost a significant amount of money in that specific state because we had an inordinate amount of growth.
▶ 1:29:03Okay. So, other states perhaps a lower increase, but certainly an increase in but meaningful increases. Point two is we've been in the Obamacare exchanges since its inception in 2014, and we've only been profitable in two out of um those cumulative number of years. to your broader point, the ability to purchase back stock in that time frame was aided by devestatures of businesses. So we over the last five years, we've devested several businesses as well as successfully have been able to run our largely employer sponsored business.
▶ 1:29:33So I would ask you to disconnect the purchase of stock heavily correlated toward devestatures and operating cash flow. We have not made money in the exchange business for quite some time. And in the United States, the vast majority of customers we serve are in the employer sponsored market and in a self-funded way.
▶ 1:29:51I understand that and my time has expired, but I'm concerned about the employer sponsored market, especially public sector where uh expenses have gone up and and coverage has gone down. Thank you. I'll yield back.
▶ 1:30:02Mr. Thompson.
▶ 1:30:02Thank you, Mr. Chairman. Thank you to the witnesses for being here today. I think it's pretty clear that too many Americans can't afford the insurance they need to even see a doctor. And this has got to change. Last year, congressional Republicans cut a trillion dollars from Medicaid, and they failed to extend the enhanced premium tax credits to make insurance more affordable for middle class Americans.
▶ 1:30:26All while they added over $4 trillion to the national debt to give a huge tax cut to corporations and some of the wealthiest people in our country. Now, 15 million Americans are losing their health care coverage. Some clinics and hospitals have already closed. More will be forced to close their doors this year. And I'd like to submit this article outlining some of those closures to the record.
▶ 1:30:55Congressional Republicans also failed to extend the Affordable Care Acts tax credits and hardworking Americans uh health care premiums just doubled or even tripled uh in this new You know, I've supported Medicare Advantage, uh, but some of the actions by some insurance companies, some that are here today, uh, are very, very concerning. And I have three articles I'd also like to submit to the record, Mr. Chairman, on that issue.
▶ 1:31:25Without objection.
▶ 1:31:26These articles show that insurers are abusing Medicare Advantage. In one disturbing example, the Wall Street Journal noted, "Medic care advantage companies are exploiting our veterans." And thank you, Mr. Dogget, for your legislation. If I'm not already a co-author, please add me to that. Um, I'm a combat veteran and I use the VA services myself and I get great care from them.
▶ 1:31:54But many of my fellow veterans are prayed on by insurance companies who get them to sign up for Medicare Advantage programs despite that the veterans get all of their care from the VA. And they're not reimbured. VA is not reimbursed.
▶ 1:32:10According to the Wall Street Journal, one in five veteran members of Medicare Advantage plans did not use a single Medicare service in Care provided at the VA is not build to Medicare Advantage plans, which means your companies are collecting taxpayer dollars without providing a bit of care to many of our veterans.
▶ 1:32:3782% I also want I want to talk about prior uh authorization because uh it's also concerning. 82% of physicians reported that patients abandon needed treatments because prior authorization requirements are too burdensome. The American Medal uh medical association says that authorization delays have led to serious adverse events for their patients.
▶ 1:33:04And according to the California Hospital Association, nearly twothirds of prior authorization denials are overturned on appeal. prior authorization increases administrative burden and uh for our doctors and it's bad uh for our patients and that's something that I believe you can do something about. So I have a question for all of you.
▶ 1:33:30uh prior authorization is causing these uh problems and many of your companies use AI algorithms to categorically deny care that must uh then be appealed without the input of a physician. Uh I want to know what you're doing about that and how you can address it. Mr. Hemley, we'll start with you and go right down the line.
▶ 1:33:52Thank you, Representative. I think that is a great topic to bring forward. Um, our organization is focused on making uh the uh complexity and uh disruption of prior authorization much smoother and much uh easier. We do not use uh AI for anything other than administrative uh purposes. It is not applied for clinical uh applications whatsoever.
▶ 1:34:17And we are advancing an effort to really make the authorization real time and digital. Less than 2% of our total interactions require any authorization at all. And the overwhelming majority of those are administrative. Those are usually resolved. They are usually resolved by a document or something like that.
▶ 1:34:36We're quickly running out of time. So if you could uh hurry along
▶ 1:34:40only that we are definitely in alignment with you on this. uh we would like to make this much more intuitive, simpler, modern and we are on that course. We have four projects in uh the market today piloting this effort and we also want to bring it to the rural community where we think we can expedite the uh flow of funds and bring some relief to those communities.
▶ 1:35:03Congressman, we uh we we agree with you. We do not use AI to deny care and we also believe that there are opportunities to improve the prior authorization process. We're committed to it both reducing the numbers as well as improving the data sharing with the providers to make take the patient out of the middle.
▶ 1:35:20We also do not use AI to deny claims or to deny prior authorizations. We also have clinicians involved and we are committed to continuing to improve in the commitments we made and we want to share data with care providers to make this safer, more affordable and more connected and we think there's big opportunity to do that. Congressman, in the um commercial business that we operate, in excess of 95% of all the claim experiences have no prior authorization.
▶ 1:35:47For those that do, um we've been able to successfully use AI to get to yes rapidly. And now we have almost 78% of all those prior off that need to transpire taking place immediately. But it is never used for a
▶ 1:36:02We have not and will not use AI to deny care. Prior authorization process today sucks. We all take accountability for it. We are fixing it by streamline reducing the number of services that are covered, offering an online service and standardizing electronic submission of
▶ 1:36:18Thank you. There's a disconnect uh Mr. Chairman because the doctors that I talked to and hospitals I talked to are telling me something a little bit different. So I'd welcome the opportunity to work with you to figure this out and see if we can fix it. Thank you. I yield back. Hopefully in the future we'll be hearing from those doctors as well to get to the root of the problem. Mr. Kelly,
▶ 1:36:39thank you, Chairman, and I want to thank you all for being here today. I know your your morning started off in a real pleasant uh launch uh as people start to talk about what they're paying for their health insurance in uh healthcare insurance. Uh one of the things I want to bring out, uh everybody talks about health care, the prices are going up, the prices are going up, and healthcare insurance, the prices are going up. Taxpayers and hardworking Americans are all footing the bill. Um, I before I got here, I was a car dealer and we knew that insurance was an essential financial product.
▶ 1:37:09Now, no one could drive off the lot unless they had insurance on their car. And I think we're getting to the point where anybody in life today doesn't want to get out of bed in the morning if you don't have some kind of healthcare insurance that's going to take care of you if something goes wrong. Now the need for insurance uh it is more about the the confidence that any in any any illness or injury does not lead to a financial catastrophe.
▶ 1:37:34Affordable health insurance remains the cornerstone of competitive benefits package serving as a primary driver for employee retention and the most crucial factor in a worker's decision to accept or stay with an employer. My son now operates our family dealerships.
▶ 1:37:50We started back in 1953 and over that time period we've had thousands of people on our team from time to time and and we've always tried to do the best in their interest as far as products that would help them not only while they're while they're with us but also if they when they retire that there's something there for them as as well. Now when I was talking to Brendan yesterday I said you know I haven't been following it as close as I should. What are we paying for our our healthcare insurance right now?
▶ 1:38:20Because Yeah. Yeah. We just got done talking to our agent. It's going to be $ 1.5 million this year. Now, $1.5 million used to be a lot of money. Uh and to some people it's not to me it's huge. Now, the average American family plan costs a total of $27,000 a year. Unless somebody says that's enough to buy a reasonably placed nice car, uh I would debate that with them. Uh there are some easy fixes that Congress could enact to to make health care more affordable, more transparent, and more valuable.
▶ 1:38:48And [clears throat] I have uh introduced legislation called improving seniors timely access to care act with my colleague Susan Doaney. Mr. Thompson, thanks for your your comments because that's exactly what we're talking about. This bill would make necessary reforms to prior authorization and Medicare Advantage lawmakers on both sides of the aisle. Hundreds of health care organizations and Americans from all corners of the country agree streamlining this process will allow our nation's seniors to receive the care they are entitled to more efficiently.
▶ 1:39:18This legislation modernizes the entire approval process to ensure seniors receive life-saving medical care that they have already earned. This bill has passed ways and means twice and has passed the House floor in previous Congresses. This bill has over 240 co-sponsors and numerous endorsements, including the endorsement of CVS Health. Mr. Joiner, thank you. To our other panelists, I would like you to please look at this piece of legislation. If it makes sense to Mr.
▶ 1:39:49Mr. Joiner, you're all in the same business. It would probably make sense to you all, too. So, please take a look at that. We have a lot of support on this, but we can't get anything done until we actually get it done. Um, I don't know of another country in the world that spends more money on health And because of healthcare being expensive, healthcare insurance is expensive. I know in my own business, if the more expensive product you drive, the more expensive the insurance is on that.
▶ 1:40:17The only thing is you can't leave the dealership without having insurance on that. Uh, what we really need. So, when you you heard about the piece that Mr. Joiner was on, I'd like you all to take a look at that and endorse it. So we can put that on the floor again and get it passed and start making some progress in this. I want to thank you all for being here today.
▶ 1:40:35I know that at times I I witnessed years ago whenever Congress decided to bring the automakers in and criticized them very heavily because they flew in in their own private jets and they thought that anybody flying a private jet shouldn't be coming to Congress asking for taxpayers to to support them. I I think we've reached a point if we can get by being political and talk about good policy. This isn't about President Trump. It's not about President Biden. It's not about President Obama.
▶ 1:41:02It's about the American people and having health care insurance that they can afford and that they can get the health care they need when they need it without having to bankrupt themselves. So, I would just ask you please, you're in the business and it is a business and it's all math. When I look at the numbers, I said, "These numbers look really, they're staggering. Looks like you're very profitable. I don't know what your net is. I know what you I know what the what the the big figures look like." You can say, "God, you had a hell of a year.
▶ 1:41:27I don't know what you netted out of it, though." So, the only thing I'm asking you, and I think whole committee's the same way, let's make sure we're working together to get the right kind of healthc care insurance for the people that we represent every day. I do not represent 3/4 of a million Republicans. I represent threequarters of a million Americans. They're looking to us to get with you and make sense of what the most expensive thing in their life is. Chairman, thank you.
▶ 1:41:51Thank you, Mr. Larson.
▶ 1:41:53Thank you, Mr. Chairman. And uh let me start by saying uh thank you Mr. Kelly. You know it's always refreshing in the committee to hear cander at in a in a speech like that and this is about the American people and I'm uh again want to thank our witnesses for being here. Something preliminary that I'd like to get to. One of our colleagues asked Mr.
▶ 1:42:17Marovich uh uh they asked about the issue of people who don't use services in a year somehow uh being fraudulent. This is something you mentioned in your written testimony. Could you take a brief moment to discuss that point?
▶ 1:42:35Well, uh on average in any population we ensure as a group employers probably 20% or a little more than 20% of people don't have a claim in a given year. And in California on in the Affordable Care Act, we had approximately 18% who didn't have a claim. So we haven't really seen a big difference there. The last thing I'd say is that we worked closely with Covered California to institute things like dual factor authentication and so we are not seeing evidence of fraud in that state.
▶ 1:43:00So it's not fraud.
▶ 1:43:02Well, not in California,
▶ 1:43:03right? All right. Well, listen, thank you uh Mr. Mark. Uh I also wanted Mr. uh chairman to submit for the record uh first to associate myself with the remarks of uh Mr. Neil and I wanted to submit for the record uh this uh district court opinion from Maryland.
▶ 1:43:25Uh and uh the opinion uh has to uh do with uh something we've been calling for on this side of the aisle, which are hearings. frankly like this one where you're candid and people get to ask questions. It's a very simple thing that we're asking for.
▶ 1:43:52uh we wanted uh Elon Musk and Doge to come before the committee and talk to us. Imagine they don't have to talk to They are in every one of our agencies, but most notably Social Security, something all of you are familiar with. And they're there going over people's personal information.
▶ 1:44:22And this report by the Justice Department says that those have given information. Something we have been saying on this side of the aisle is why they should be prevented.
▶ 1:44:42To her credit, said, "I would rather resign my position than allow people to have access to the personal data of more than 300 million Americans." She was asked to leave
▶ 1:45:13and was replaced temporarily by an individual who in fact had already been suspended because he had given to private sector agencies.
▶ 1:45:39He was the person who was intram before our current SSA. This screams and this committee like we're sitting here today to sit with Doge and Elon Musk and Mr. Davis and ask those very questions about what has happened.
▶ 1:46:07You're going to be grilled on questions of what you're today. Rightfully so. And I commend our colleagues and I commend the chairman for saying that there's going to be further discussions bringing in the hospitals and the doctors and all the cost. I wish we could say we had a plan from the other but we don't.
▶ 1:46:34But if we're going to be having hearings and we want to be candid and get to questions that need to be answered and actually work together bipartisanly for solutions, then we need to be able to honor a member's request. We have something that's called a resolution of inquiry that should provide this. Mr. Musk was able to avoid that because he's above the law. No one's above the law.
▶ 1:47:05We need answers to these questions. Thank you for being here to answer tough
▶ 1:47:11I yel back.
▶ 1:47:12Thank you, Mr. Schwiker.
▶ 1:47:13Thank you, Mr. Chairman. Um, all right. Let's have some fun with some math and plan design. Um, um, and Mr. Mr. Hinsley, I'm going to direct most of this to you just because you are truly the your organization is the biggest player in the space. I'm we've been working on Medicare part C, most of us known as Medicare Advantage. Um I in many ways dollar-wise it is multiples of the debate of more subsidies on top of subsidies.
▶ 1:47:43Um, this is the uh, MedPAC report and I know we all argue about what it actually says and but for a decade I have in here basically it's saying and I'm sorry but we've read it a lot so it's falling apart that Medicare Advantage is coming in at 120% of fee for service. If you go back to 2005 when we actually started Medicare Advantage, it was supposed to come in at least 95% or less.
▶ 1:48:14Um, is there a way an organization like yours where you have very robust networks, how do I actually take a look at the externalities and and and look, we have a we're blessed to have a Bloomberg terminal. So we pulled up, you know, your reports and those things, you know, 9 billion to AARP.
▶ 1:48:40We've been trying to calculate what you pay to brokers who have externality costs that don't actually provide health care service directly to that um enrolly. If I came to you and said, "Let's go back to the original design um Senator Frisk um 2005 where it's a managed care model, but the profitability comes from helping your population be healthier instead of scoring them as sicker or the some
▶ 1:49:10of the craziness that goes on in the star ratings and some of the changes that happened during the ACA where in many ways they screwed up the incentives and go back to a classic model of actuarily bid your prop population. Build a model with government so we have some risk sharing if there's an externality of individuals who are remarkably expensive so you maximize the efficiency in your bid. How do we clean it up?
▶ 1:49:39Does it require multi-year enrollment so you can invest in the person to help them get healthier to help them with their BMI? whatever it is. Um, how do we make Medicare Advantage work? And for this is for the members of the committee. I know you've all read it. Over the next seven years, Medicare doubles in cost. We go from 1 trillion to two trillion. In six and a half years, the trust fund is gone.
▶ 1:50:11The Medicare trust fund is gone in six and a half years. That should terrify you. Are you you when you realize how much of the um Medicare Part A trust fund actually goes to the Medicare Advantage population? Am I just rambling, Mr. Hensley, or is this something that your actuaries, our economists, we could build a model because our CBO says it's like 1.8 trillion in savings over 10 years if we could just realign the incentives.
▶ 1:50:42Uh well actually I applaud your interest in this and I think it's very consistent with the spirit of others who have talked about really getting to solutions and getting to a better healthcare environment. Um and the Medicare program is so important. Medicare advantage is as you know a very very popular 95% approval rating with seniors. It is um seniors are opting for it.
▶ 1:51:07We do take issue with the MedPAC report and believe that the cost of Medicare advantage is actually about 91% of fee for service um Medicare. But I would be very open um and I'm sure the industry would be open to exploring ways to make Medicare Advantage more effective and um more impactful.
▶ 1:51:34We already pursue valuebased care as a as the predominant way we approach that which is a payment for outcomes and holding um care providers accountable for the quality and the uh status of their um those that we entrust to their care. So I would respond generally that we would be very open and constructive. Over the years we have offered a number of ideas and we would like to continue to bring those kinds of things forward.
▶ 1:52:04Mr. Chairman, Mr. um my crazy request is um I am blessed with the joint economic committee to have a couple healthcare economists send me a couple of your Let's see if our math works because the scale of spending and and what we're up against debt and deficit wise because we've turned health care into financial engineering. That's most of this discussion here. It's not healthcare.
▶ 1:52:32It's who pays who gets to subs be subsidized. I'm passionate. I want to revolutionize the actual delivery of healthcare so it's effective, affordable, and accessible. And that means making it about healthcare. So with that, Mr. Chairman, I yield back.
▶ 1:52:49We align to that spirit completely.
▶ 1:52:51Uber healthcare. Mr. Schwiker, Mr.
▶ 1:52:56Thank you, Mr. Chairman. and and I thank all of our witnesses for the answers and comments that you have made. Mr. Young, I listened intently to your testimony with a great deal of interest. And one of the reasons that I did so is because you shared with personal real life experiences.
▶ 1:53:25no projections, no analysis, but the real experiences that you have shared. And I certainly agree that there are no simple solutions to very complex problems and complex But I do believe that we live [clears throat] in a country that has the wealth, the technology,
▶ 1:53:57and the resources to make sure that every citizen has the opportunity have good, solid health care that they can afford.
▶ 1:54:17and that if they can't afford it, then it ought to be provided to them And I know that may be a novel idea in the minds of some, but even though we are a capitalistic I still believe that we're able to do that. We've made some progress.
▶ 1:54:46certainly over the last 50 years or so. And so we we we're not as bad off as we've been, but can you think of anything that would take us closer to this goal or what what can we really do?
▶ 1:55:05I mean, we've discussed the issue, but but what do you think we can really do to try and make health care more accessible to the average citizen in our
▶ 1:55:21right? Thank you, Mr. David. So my my thought on what can be done is instead of looking at taking away benefits that really do benefit like those the um premium tax credits, those benefit many people.
▶ 1:55:39And even though the ACA may not be perfect, instead of trying to dismantle something that is really working for millions of us, work together in a bipartisan manner to fix the things that are not perfect, but don't take away what's really helping so many of us.
▶ 1:55:59So I believe if we just if we have the legislators working together in a bipartisan manner, forget all the Democrat, Republican and everything in the middle and then when we have health insurance companies and the you know working with the drug companies and the doctors and everyone working together because right now everyone is seems to be looking out for what's in their own personal best interest instead of the interests of
▶ 1:56:29regular Americans who put each person here to represent us.
▶ 1:56:34Thank you very much. And it quickly quickly if I could ask each one of our corporate executives just one sentence or one thing you think we can do to really make it more
▶ 1:56:54Mr. Himsley, would you say?
▶ 1:56:55Yes. Um thank you and I very much appreciate the spirit in which you framed this. Um I think really if you could listen to everybody who testified um and their prepared remarks to everyone was in favor of changing the incentives towards outcomes and value. Nobody went another direction.
▶ 1:57:19you've got consensus about a change in the direction of how we incentivize and pay for care and it was also in the remarks of several that were made um before we began. So I would say really getting behind that kind of a movement um and really building the um the health care system around those themes um and um I actually believe most of the companies here have already started in that Thank you
▶ 1:57:49very much. Our time is going to expire, so I'll yield back, Mr.
▶ 1:57:53Thank you, Mr. Le Hood.
▶ 1:57:55Thank you, Mr. Chairman, for having this hearing. I want to welcome our witnesses here today. As I travel around my district, uh, in Illinois, central Illinois and Northern Illinois, I continually hear about the rising cost of health care from families and farmers and workers and small businesses throughout my district. Premiums and out-of-pocket costs continue to put pressure on household budgets. And too many of my constituents feel like they're doing everything right, but still falling behind.
▶ 1:58:24While our health care system and its costs remain complex, and we've heard that today, health insurers play a critical role within our system. By pooling risk and negotiating on behalf of millions of Americans, insurers shape what care patients can access and at what cost. Ultimately, I believe competition and transparency and innovation are the best tools to lower costs and improve care.
▶ 1:58:49But when markets become unreliable and manipulated, we have seen that those benefits don't always reach patients. Much of your testimonies here today address factors other than insurance practices for the rising cost of health care. However, I view this as a comprehensive system where everyone shares responsibility to patients and families.
▶ 1:59:12We have also heard a lot about consolidation in health care and health insurance, both vertical integration with PBMs and medical practices as well as largecale horizontal consolidation of insurers and its impact on patient choice and prices. In theory, this consolidation should make it easier to obtain lower prices from providers as your market power increases. Mr. Hemsley, my question is for you.
▶ 1:59:39United Healthcare covers roughly 53 Americans across this insurance business, across its insurance businesses, and processes hundreds of billions of dollars in medic medical spending each year. You are the largest purchaser of hospital and physician services in the country. What challenges do you see as preventing you from lowering prices during negotiations despite your sizable and increasing bargaining power?
▶ 2:00:10I'm sorry, that's an excellent question. Um, and one in terms of real market reality. Um our presence in the marketplace is um um leverable in terms of uh getting uh price um good price and value for health care. Uh but there is meaningful concentration in some markets and you need to provide sufficient access.
▶ 2:00:36So to achieve that level of access um where there is concentration on the care health services side health delivery side um there is only so far you can go so that you can make sure that people have the resources to go to for their care and that creates a a re practical limit in terms of what you can do from a economic point of view. I I want to switch to Medicare advantage.
▶ 2:01:02Uh Medicare Advantage, as we've heard from a few of my colleagues today, has become a popular choice for millions of seniors because it offers coordinated care, predictable costs, and additional benefits that traditional Medicare often does not. When it works well, it can deliver strong value for beneficiaries and taxpayers alike. At the same time, issues have been raised ranging from allegations of improper practices like upcoding to real world challenges seniors face navigating enrollment and coverage changes.
▶ 2:01:33My office recently assisted a constituent whose approved surgery was put at risk because of confusion about open enrollment and conflicting plan information requiring my staff's intervention to avoid a lapse in coverage. Unfortunately, that is not a unique experience. These kinds of situations underscore how important clarity, accountability, and patient- centered administration are in Medicare Advantage.
▶ 2:01:58It's our responsibility on behalf of millions of Americans who have chosen Medicare Advantage plans to prevent this and address faults within the program. I ask this uh for any of you on the panel that wish to answer, what steps are you taking now to ensure Medicare Advantage continues to serve as a valuable and affordable option for American seniors? Not all at once.
▶ 2:02:23Well, I I' I'd go back to the uh points that I was making about getting a digital health record, uh changing the payments models to pay for outcomes, uh eliminating kickbacks. So, the things I mentioned about uh um Blue Shield of California members now can access a digital health record, which is what we're using to do the automated prior authorization, and we have gone to our own pharmacy model, which has saved some money.
▶ 2:02:46So, there are some things that we are trying to do and I do believe and I'm happy to work with you, Congressman, on things that we could potentially change in the rules of the program to help support that. Anybody else?
▶ 2:02:55Again, I would use valuebased care as the principal direction for Medicare
▶ 2:03:01Thank you. I yield back,
▶ 2:03:02Miss Sanchez.
▶ 2:03:04Thank you, Mr. Chairman. And I want to begin by thanking Miss Young for taking time away from your business to be here today to testify about many of the experiences that I think millions of Americans go through in trying to keep their healthcare coverage.
▶ 2:03:18Um, for our other witnesses, I want to say that it's no secret that Chairman Smith called you all in today uh to try to blame and from the fact that Republicans have cut healthc care coverage for 15 million 230 Democrats and Republicans, including three Republicans on this day, voted to stop Americans health premiums from doubling or tripling.
▶ 2:03:43So, um, instead of pointing the finger at other folks, I think perhaps my Republican colleagues should look in the mirror when they talk about accessibility to healthcare coverage. Um, Mr. Hemsley, I'm going to begin my questions. You announced today that you are reinvesting your profits to reduce premium increases for United Patients this upcoming year in order to stave off the Republicans's failure to extend the ACA tax credits. Is that
▶ 2:04:11Um thank you for bringing that up. Uh we believe that given the desire to um achieve coverage that you are really gathered for that in that circumstance as we seek solutions that we would forego profits and rebate them back.
▶ 2:04:31So the answer is yes.
▶ 2:04:32Thank you. Mr. Katani, will Sigma also reinvest its profits to lower patients skyrocketing premiums cost due to the failure to extend these tax credits? A simple yes or no will do.
▶ 2:04:45Congresswoman, thank you for the opportunity. Uh today we cover about 1% of the exchange lives and we do not um intend to make that commitment. As I noted, we've lost money every year, but two over the last 12 years.
▶ 2:04:57Okay. But Mr. Cordani, respectfully, you were compensated $23.3 million last year. Um, and what I'm seeing is perhaps the beginning of an industrywide trend or commitment to try to ensure that patients don't go without health care. Is your answer still no? Um,
▶ 2:05:15Congresswoman, we made a a pledge uh recently to reinvent the PBM offering for the marketplace and it's going to reduce our earnings by 500 to 600 million next year. Um, we've made that commitment that comes out of every executive's opportunity next year. that will affect all the lives we serve, including those on the exchange, and we estimate that it will improve costs for every individual out of pocket. So, we were seeking a much more scaled solution than for just the 1%.
▶ 2:05:42I believe the answer is just still no. Um, Miss Bordeaux, will Eleance reinvest its 2025 profits to save off the um premium increases due to the failure to extend the ACA tax credits? Congresswoman, we're Congresswoman, we are willing to look at any proposal, but I just want to be clear on expectations because as we've been discussing, this won't address the root causes of what drives premium up, which is the cost for services and the continuity of care.
▶ 2:06:12We did also did not make any money on the individual exchanges in 25 and we don't know how 26 will play out. So again, we want to be part of the solution, but want a meaningful long-term solution as well. Yes, but Miss Bordeaux, isn't it true that Elements reported a $50 billion operating revenue this past year primarily due to Medicare Advantage? I I get the exchange is maybe not so profitable, but Medicare Medicare Advantage seems to be um doing pretty well for your company and your salary.
▶ 2:06:41You personally made about 20.5 million and none of that can be reinvested to help patients keep their healthcare.
▶ 2:06:48Congressman, Congresswoman, again, we are very interested in being part of the solution. Medicare Advantage. Uh we also uh made a very minimal profit um not to the revenue side and we have it's a highly regulated environment very
▶ 2:07:03Uh we seek again premiums are result of the costs that are we pay underlying to to support services and the members in those programs. We're looking at sustainable solutions and again want to be part of that solution.
▶ 2:07:17Okay. I take it the answer no. Um, I want to pick up where um my uh colleague Lloyd Dogget um discussed um denials. Um it's outrageous to me that over 80% of prior authorization denials are overturned. I think that plan should be penalized for these inappropriate denials. Um I uh I just want to give like a very quick personal uh uh experience of that.
▶ 2:07:45I had knee replacement surgery earlier uh in the year last year. Uh was supposed to start inhome physical therapy immediately. Had my own challenge being in pain and on pain medication with my insurance that denied me the inhome physical therapy. Although my orthopedist and every nurse said that it was critical to begin the physical therapy right away.
▶ 2:08:06and I'm a member of Congress and was on the phone battling with my own insurance company, which by the way, members of Congress, to dispel any belief out there that we have the best healthcare in the world, I buy my healthcare off the DC exchange. I think that the prior authorization denials and then the fact that they get overturned on appeal so frequently means that these denials are per per purposely um uh they're purposely denying claims so that um they're forcing people to prolong their care which leads to worse
▶ 2:08:36outcomes and I think that that is something that we really need to address. All of you need to really help address that and with that I will yield back to the
▶ 2:08:44Thank you Mr. Arrington.
▶ 2:08:45Thank you Mr. Chairman. panelist uh very concerned about the rising cost of healthcare like everyone in this country as budget the budget chairman I have the honor of representing my colleagues in that role and uh there is no way we're going to reverse the curse uh and change our fiscal trajectory that is completely unsustainable if we do not address and bend the curve on the cost of health care. It's crushing our families.
▶ 2:09:13It's a drag on the economy and again it's a threat to my children's future and we've got to do something about it. A third of the federal government's budget is health care. 50% of all healthc care dollars are controlled by Washington DC. Uh in the 80s it was only 30%. Uh obviously medical inflation is outpacing all other goods and services exponentially and uh it's it's it's unsustainable.
▶ 2:09:41one benchmark for the American people. Uh to get a a sense of of this explosion in cost, we spent $19 billion in 1975, uh around 5% of the federal budget. Today, today we're spending almost $2 trillion on healthcare and it's a whopping one-third of the budget as I mentioned. Uh we've got to do something about it. We have to get the incentives right. Um, we need the partnership with the private sector.
▶ 2:10:11I agree with my colleagues. Competition, choice, transparency. I mean, no central planning here or anywhere is going to deliver the kind of value that you can deliver if we put the incentive structures in place and guard rails so that everybody wins. But I I don't believe that that balance has been struck.
▶ 2:10:36Um, I I want your expertise, your market insurance market expertise on Obamacare. Uh, because I do think that one of the problems with this these perverse incentives have been uh directly flow from the the creation of these tax subsidy regulate mandate This was pitched sold as the affordable care act.
▶ 2:11:03Premiums and deductibles have doubled since the inception of Obamacare. Shake your head up and down if you agree with that. Raise your hand if you agree that they have doubled premiums and deductibles since Obamacare, the inception of Obamacare. Okay, everybody. Okay, because it's just math and it's just data.
▶ 2:11:23Um, and when you add the subsidy to this from COVID, which doubled the cost to the taxpayer, by the way, didn't double the number of people that were getting this insurance. In fact, if you deduct the 6 and a2 million people that are ineligibly on the program, maybe it's a third.
▶ 2:11:45Do you know how much on average the premiums have gone up uh on uh the exchange since we since my Democratic colleagues doubled down on on the quote affordable care act twice? So Mr. Mr.
▶ 2:12:02Hensley, Hensley, is Obamacare uh are the cost within Obamacare uh more or less than the inception uh than when Obamacare was first passed? More or less?
▶ 2:12:17Representative, the the cost of all health care has increased.
▶ 2:12:23But but has Obamacare's premiums gone up twice as much as those in the private market? And with employer sponsored insurance ha has has has have they outpaced the private sector and employer sponsored insurance plans?
▶ 2:12:36I can't say they've out
▶ 2:12:38well they does anybody know the answer to that question.
▶ 2:12:42You don't know the answer to that?
▶ 2:12:44Well uh Congressman I in California they haven't been dramatically different but I don't can't speak to it nationally. Well, we have six and a half, according to CBO, six and a half million ineligible people that are being subsidized by the that are not legally eligible. By the way, there there are also uh there's also billions of dollars in fraud.
▶ 2:13:07There are there are people's dead people's social security numbers used to send the subsidy to your insurance company and everybody else everybody else up here. My question is, do you know that fact? And if you do, what are you doing to stop it so we can steward tax dollars so we can make sure that the sub subsidy, as much as I think the underlying policy is flawed, is at least going to the people that it was intended to.
▶ 2:13:36What are what are what are you and your company, what are y'all doing to uh increase program integrity, pre prevent fraud, waste, and abuse of tax dollars? Well,
▶ 2:13:47six and a half million ineligible
▶ 2:13:51Fraud is unacceptable everywhere. I'm uh proud of the work we've done in California where we've implemented things like dual factor authentication to verify eligibility. So, we have not seen that kind of uh fraud issue at that level in California. And I'm happy to talk also offline about the things that we've done, I think, that have led to that result. Again, I can't speak beyond our market, but that's our
▶ 2:14:12and I'm not picking on you quite frankly. It's across the board. somebody's not uh putting the controls in place and paying attention and uh we've got to change that incentive structure for the sake of the taxpayer and our future taxpayers who who would be our children. So with that, I've gone over my time, Mr. Chairman. Thank you. I yield back.
▶ 2:14:32Thank you, Mr. Arrington. I want to inform members that the votes have been called on the House floor and I intend to call the recess following the end of my questioning period. Committee will be called back in order immediately following the vote series. I recognize myself now for five minutes. I had brain surgery myself five weeks ago and I don't care if I was on dialysis, if I had an elvad in, or if I was intubated, I was going to be here.
▶ 2:14:56I have been a physician for 35 years and sadly have had a front seat to witness the decay and decline of one of America's largest industries, and that's the health insurance industry. I have had patients cry in my room. IFF physicians cry to me, throw up their hands in disgust, and quit because of actions of our health insurance industry. Nothing you're going to say to me today is going to change that.
▶ 2:15:22You have put profits above patients and you've put profits above those who care for patients. You're sitting here blaming hospitals, pharmaceutical companies, even physicians. There is blame to go away to go around there. But you have squarely abused your privilege of authority to deliver health care to patients in this country. There are a few bad actors in the a few good actors in the industry. Mr. Marowitz, I believe you're one of the good actors.
▶ 2:15:48If it were up to me, I would throw out all pro forprofit systems in this country and turn everybody into nonprofit. It has gotten that bad. But you all have been very derelct in your duty and abuse this position of authority. There has been systematic denial and delay of care. It took me eight denials myself to get a medicine that I need to exist. A year and a half. I'm a physician and a member of Congress. It took me eight times through CVS to get that medication.
▶ 2:16:18I didn't pull any strings. I did what I was supposed to do. Imagine the average person in the country. There's been a weaponization of prior authorization. You are killing people who are trying to get deliver health care. There's been abuse with the Medicare Advantage plans. My god, I could talk about that for hours. Deceiving and extorting taxpayer dollars. The vertical integration that has occurred in this country is disastrous and criminal. There have been record profits. I don't want to hear about the fact you're not taking profits.
▶ 2:16:47We know how money gets moved around in these companies. The seauite executive salary compensations is a slap in the face to the average American who goes bankrupt because they cannot afford healthcare. You all showed up last summer at HHS and you said to Secretary Kennedy, "Amea Kulpa," "Yes, we've been doing things badly. We're going to fix things." I won't believe any of that until I see it. And so far, I've seen nothing. Surprise billing, bipartisan legislation passed into law by President Trump.
▶ 2:17:18You all own and keep millions of dollars that are owed to providers today that you're not paying them that have been adjudicated in their favor in their favor. That is fraud. You know, United Healthcare, you guys give a wonderful thing that you're going to return Obamacare premiums. I doubt I I wonder and perplex whether it would have occurred if these if these hearings had not been there. But what about the billions of dollars that you've stolen from the American taxpayer because people were fraudulently enrolled during COVID?
▶ 2:17:47I don't see that money coming back. Medicare Advantage, you've made the diagnosis secondary hyperarathyroidism an amazing thing. 70% of your MA patients have it while 3% of of fee for service patients have it. It's unbelievable. You've manipulated medical cost ratios by the way that you pay physicians and the way that you uh hide money through your PBMs. The vertical integration. You guys own PBMs. You own pharmacies. You own health agencies.
▶ 2:18:17physician groups. God for God. Good God, you own a bank. Why would an insurance company own a bank? You know, I had a very spirited discussion with Dr. Decker a couple years ago and I outlined all the Wall Street Journal articles documenting the egregious practices that were going on by United Healthcare.
▶ 2:18:36And all he had to say in an arrogant and audacious manner was, "We are doing nothing illegal." Well, right now several of your organizations are under investigation for criminal and civil charges or for misconduct and we'll see if things are not illegal. I am here with the outrage of the American people. You know, right now we're trying to lower drug costs. Will each of you I'd like a yes or no answer.
▶ 2:19:02Will each of you commit to allowing Trump RX or cost blood medications to go towards patient deductibles? Mr. Hemsley? I'll take that as a no. Mr. Joiner.
▶ 2:19:16Um, absolutely. If it lowers cost for uh for Americans.
▶ 2:19:20Thank you, Mr. Bedro.
▶ 2:19:21For the lowest cost and affordability, we're open to figuring out how to make
▶ 2:19:24I hope it goes towards deductibles. I'll take that as a yes. Mr. Cordani,
▶ 2:19:28our newest offering would accommodate that. Yes, sir.
▶ 2:19:30Excellent. Mr. Marovic, you don't have you don't own a PBM.
▶ 2:19:34All right. Miss Young, you get to skip on that one. You know, I don't agree with Mark Cuban often, but we do agree that what needs to happen is that you guys need to be broken up. The vertical integration has destroyed competition in this country. And again, if I had my way, I'd turn all of you guys into dust. We'd start back from scratch. We'd have competition in the industry. We'd have associated health plans, and we would have nonprofit hospitals rather than profit being put over patients.
▶ 2:20:00Sadly enough, I'm not na naive enough to believe that anything that's been said today is going to change boardroom I don't think it will happen. The bottom line is profit and that's what's happened in this country and this is where the American medical system compared to the rest of the world is sad comparatively.
▶ 2:20:18But finally, I am glad that we have a president in the office who doesn't care about special interest who is willing to confront and tical and tackle what I believe is unethical, unscrupulous, and unprincipled behavior of the American healthcare insurance industry. President Trump has said he's going to do it. I believe he's going to do it and it is long overdue. With that, I'll yield back with my comments. Prior to recessing, I ask that members of the audience remain seated while the witnesses exit the hearing room.
▶ 2:20:47And I'll ask that this occur right now. The exit while the witnesses will exit.
▶ 2:21:32As announced now, the committee stands in recess until immediately following the vote series. Thank you.
▶ 3:01:01the hearing will come to order. Miss
▶ 3:01:04Thank you, Mr. Chairman. First, I'd like to thank all of our guests for being here and especially you, Miss Williams. uh your testimony was very powerful and is a reason why my colleagues and I are fighting for the 24 million uh me members of Americans that depend upon the ACA.
▶ 3:01:21Um unlike the uh billions of dollars that many of the insurance companies are making, many of the hospitals in underserved rural and urban areas like the ones I represent in Alabama do not see millions or billions in profits annually. In fact, many of the hospitals in my district operate either on thin margins or simply in the red. Some of my hospital administrators often pay staff out of their own pocket and operate monthto monthto monthth.
▶ 3:01:50This is especially true because Alabama, like nine or 10 other states, did not expand Medicaid. So, our underserved urban and our underserved rural areas are really uh in dire straits. Added administrative red tape and burdens do not make it easy for rural hospitals to receive timely payments.
▶ 3:02:11I've spoken in this committee time and time again regarding the painful Medicare Advantage prior authorization process that negatively affects DCH Regional Medical Center in Tuscaloosa, Alabama. Today I want to share the experience of Hail County Hospital uh in Greensboro, Alabama, which is another facility that's in my district, but in the rural part of my district.
▶ 3:02:35Hail County Hospital has had ongoing issues with Medicare Advantage billing due to incorrect coding, delayed uh prior authorizations, retroactive denials, and quite frankly, the list goes on and on. United Healthcare has a significant share of the Medicare advantage in my district and marketplace um beneficiaries receiving treatment at this particular hospital.
▶ 3:02:59United has also negatively contributed to the billing um chaos, the ongoing problems related to billing, including in patient visits being classified as observation and even physical therapy services being filed under the hospital's home health services have resulted in reduced payments to the hospital.
▶ 3:03:20The hospital administrator has paid legal fees and currently uh is paying a revenue cycle consultant to assist with the thousands of claims that they are they that they're only given 30 days to address. These costs are additional unburdened unnecessary burden on our hospitals and the staff at the hospitals describe it as a nightmare. Mr. Helmsley, I want to thank you.
▶ 3:03:46Um, I had an opportunity to share with you what was going on in Hail Hospital and you responded uh this week. Uh, in fact, the hospital informed me and my office that this was the first time that United Healthcare had escalated their concerns despite hundreds hundreds of calls.
▶ 3:04:05According to Kaiser's uh family foundation, 3.2 million uh people uh well 200 two 3.2 2 million prior authorizations were denied in 2023 in Medicare Advantage and 81.7% of those that were denied were appealed and upon appeal were later overturned which really begs the question why were these claims denied in the first place? Um so I really wanted to ask you Mr.
▶ 3:04:34Hley, if there if um you know, what are you and United Healthcare doing to try to make sure that you meet the moment? Um especially in these small rural communities that I represent that didn't expand Medicaid in my state and literally depends upon timely payments and um prior authorizations that are uh appealed and then granted takes 90 to 120 days for them to receive their payments.
▶ 3:05:02and it simply teeters them on the edge. And I know while I'm addressing this to United Healthcare, all of you have similar concerns or people back home who have similar concerns about timely payments and making sure that we're doing all that we can to get folks uh the help that they need. So, can you speak a little bit about what you're doing to address that?
▶ 3:05:23Sure. Thank you and thank you for the issue and and for bringing it up when we met because um once once we know about something we can address it but
▶ 3:05:33but you know and I know that not everybody has can can appeal to their congresswoman and have their congresswoman call which is why I think it's so important that we make sure that everyday Americans have access.
▶ 3:05:44Totally. So um we are pursuing uh an effort to what we call real-time uh kind of processing so that we cut through that complexity. Um most of which as I indicated before is administrative in nature and not clinical and I think that we can do more to own that and use technology more effectively. Sometimes it is more challenging in rural settings but I think we're conquering that. We have a pilot out in four markets, four rural markets,
▶ 3:06:14and we would love that pilot to come to Alabama. I think we talked about that
▶ 3:06:17is headed your way.
▶ 3:06:18You know, I think that at the end of the day, while um lots of um you know, insurance companies have this problem, you are uh United Healthcare is an outlier in the sense that you guys have the most. And so whatever you can do to continue to be responsive to um to the needs of the patients, I would uh suggest that you do. Um Mr.
▶ 3:06:40Speaker, uh I know uh I for one I for one and a member of Congress that will talk to the CEOs and so I say to all the CEOs here, watch out and accept my calls when I
▶ 3:06:52You never surprise me, Miss Soul. Mr.
▶ 3:06:57Well, thank you, Mr. Chairman. Um, we're here today to discuss the economic reality facing American families. Specifically, why the efficiencies in modern health care don't translate into more affordability for the patients who pay them. You know, in a healthy normal market, you think vertical integration and scale would result in lower prices and a better patient experience. Yet, for the people of Kansas, the 2026 healthc care market is characterized as a physical and financial desert.
▶ 3:07:27Families in my district are facing financial are facing finalized gross premium hikes of 26.6% with benchmark deductibles as high as 6,000 for individual and 12,000 for families. When we talk about consolidation, we aren't just talking about companies. We're talking about the loss of local options. In 2026, 14 Kansas counties now have only one single insurer left available to them.
▶ 3:07:55When a local hospital in a community like Derby, Kansas, closes, it isn't just a business failure. It's a new permanent expense for every patient in that town. A routine checkup has turned into an all-day event, including lost wages and travel costs that weren't covered by insurance. Uh, this only adds to the affordability crisis where the patient pays twice. Once through record high premiums and again through the increased cost of accessing health care through shrinking market.
▶ 3:08:22Um, I I hope you can help me understand why American taxpayers who contribute the bulk of your revenue, particularly for um what seems to be the the unaffordable care act, are seeing a diminishing return in the form of high denial rates and soaring out-of- pocket costs that are utterly unfair to them. Um, I want to talk a little bit about vertical integration for u the models that you have.
▶ 3:08:47We've talked earlier about um uh as companies you own an insurer, you own a PBM, uh often own some physician practices. Uh those should be designed to drive efficiencies and lower cost. However, your own data shows that the multi-billion dollar investments in integration uh you still have an increase in in healthc care spending. Nationally, it's up 5.6 trillion in 2025. And healthc care cost outpaced inflation by 300%.
▶ 3:09:18And insuranceowned specialty drugs now cost patients three times more than it did a decade ago. Let's be clear, we we have 15 years of the Democrats unaffordable care act. And this has been the result. Americans cannot afford their health care and the Democrats only solution is to cut another blank check to the insurance to paper over the inflationary prices.
▶ 3:09:42Um, one of the things I want to talk about is how do we I know a couple of members up here have talked about the forprofit versus nonprofit uh aspect, but are there federal policies in place that capture returns? Uh, are you are you relying upon the uh MLR or other provisions to to capture returns? Maybe I'll just go down through the nonprofits. Mr. Mr. Himsley, is that true for you?
▶ 3:10:08Yes, we're we're subject to a a wide spectrum of oversight in every aspect of our business, both the insured and the services side that really oversee the economics and um fair pricing across the board. So we are capped across all aspects of it and uh also subject to care ratios.
▶ 3:10:32So Mr. Joiner is that are you limited as well? about MLR.
▶ 3:10:35Yeah, the MLR caps apply to us as well, which is the only place where the caps actually exist in healthcare is in is for the insurance companies.
▶ 3:10:43Mr. Budro, is that
▶ 3:10:45Yes, we compete in all of the markets you mentioned and they're highly competitive and they're highly regulated and we are subject to minimum MLR from 80 to 85% in those markets. Um, and also file our rates as part of this process.
▶ 3:11:00Mr. Gordon.
▶ 3:11:01Sir, the vast majority of our business in the United States is uh for US employers and 85% of that is what's referred to as self-funded. So there's transparency back and forth with our clients and that's the natural check that happens because they have a choice to hire us or not and which services and the net of all that is approximately a 4% margin across our entire portfolio of
▶ 3:11:22So um I know we're about to run out of time here. Uh, I think there's probably some reason that maybe we need some more have some more discussion about is the MLR driving you to raise your premiums because that's one of the ways you can raise profit. And I I just think that's something that we need to come back to. We probably don't have time today. You know, I try to get in one one more quick question, but Mr. Hemley, you're one of the bigger of the the folks that are here, the one of the bigger players in the Kansas market, and you know, we we've got a concern in Kansas about denial of claims.
▶ 3:11:52I mean uh 26% of all claims are denied uh within uh the studies that we have. At the same time, we're having a lot of rural hospitals that are closing. They're operating on a negative 19% margin while waiting 46 days to be paid. I mean, why why are you targeting or why why are you is it taking 46 days to pay?
▶ 3:12:15Uh again, an excellent question similar to your colleague. Um we part of it is um a time to submission but we are endeavoring to create a real time experience so that these can be collapsed.
▶ 3:12:32So we are moving in in rural settings from about 30 days which is the average to be paid to less than 15 and that is going on in four markets right now and um we we expect to expand that once we uh get you know prove those pilots out.
▶ 3:12:49That that's a thank you. That's a critical aspect for so many of the hospitals that I talked to uh that have to manage their cash flow. Um so Mr. Chairman I move over time I'll yield
▶ 3:12:59Thank you Mr. Smucker. Thank you Mr. chairman for holding uh this incredibly important hearing to address the role that insurance companies have in the rising cost of health care for everyday Americans. You know, the federal government sends hundreds of billions of dollars each year to private health insurers through Medicare, Medicaid, and ACA subsidies. It's a massive public investment and I understand insurance companies, you you want to make a profit, you want to do well, and in a free market, um I would have no problem with that. But this is barely a free market. In fact, much of it is not.
▶ 3:13:29Um, Americans while this is happening are paying they're Americans are paying more than ever for coverage and they're experiencing wor worsening health uh outcomes. While that's happening, we spend more on health care than any other country but have lower life expectancy and higher rates of prevent uh preventable chronic disease than our peers. At the same time, the nation's largest insurers are reporting billions of dollars in annual profits.
▶ 3:13:56profits ultimately supported by taxpayers and families paying higher premiums and out-of- pocket cash. Uh if public dollars are holding up the system, what are the results? Why are insurers thriving while America's health is stagnating? Americans deserve lower costs, better health, and real accountability, not just strong quarterly earnings. Over the past decades, as I've mentioned, families have seen premiums, deductibles, and out-of- pocket costs rise year after year, even as insurers have taken in record revenues.
▶ 3:14:27produce a chart or have a chart that was produced by the budget committee which shows health insurance stock prices uh over in the last 10 or uh in the last since 2014 in the last 10 years and correlates that with rising health uh care premiums or insurance premiums I should say. So there's a there's a correlation between the premiums and where those dollars are going.
▶ 3:14:52has resulted in higher profits and higher uh stock prices uh for health insurance companies. Your margins are protected but for patients their experience is higher premiums, higher cost sharing and more difficulty accessing great care. If we put one additional line, we would literally show declining health outcomes trending downward uh during that uh same uh time period.
▶ 3:15:18And I have a you could argue well the stock market has done well during that period but I have another chart. Um this shows health insurers performance compared to other sectors and you'll see that in just a minute and you'll see that health insurers have uh outperformed the broader market uh in multiple different uh measures. So Mr. Chairman, I'd also like consent to uh submit this data to the record
▶ 3:15:44without objection. So, um, while it's true that input costs have increased, um, several witnesses on this panel, including United Health, have spent billions on stock buybacks and shareholder distributions. Despite rising input costs, insurers have successfully preserved and grown shareholder value uh, as those costs rose. So, it's pretty hard to argue that this approach puts patients first.
▶ 3:16:09And as I mentioned, in fact, health outcomes for the average American have not improved and in many case have worsened. Mr. Helmsley, what EV evidence can you point to that patients, not shareholders, have been the primary beneficiaries of these business
▶ 3:16:26Your mic, please.
▶ 3:16:26Excuse me. I think there are a number of points. One one thing I would offer to point out is that we participated in the ACA exchanges for all of its duration, 12 years.
▶ 3:16:37Yeah. And I I guess what I will say is um this is partly in some ways you're responding to the system that was set up particularly in ACA set up by Democrats which has encouraged this or allowed this um kind of behavior. M Miss Bodro um Eleance has grown massively with uh revenues over 170 billion operates blue plans in many states and owns pharmacy behavior health and other subsidiaries.
▶ 3:17:03uh families and workers in my district are not experiencing affordability gains. Premiums and deductibles continue to rise even as companies like yours grow larger. Do you acknowledge that consolidation in healthcare industry, including your company's expansion into affiliated services, has not resulted in lower premiums or lower out-of- pocket costs for working families?
▶ 3:17:27Congressman, thank you. I appreciate the question about affordability and I would say um our strategy is grounded in whole health and as we think about our strategy we have
▶ 3:17:38do you think costs have gone down as a result of those strategies for families
▶ 3:17:42costs have gone up u predominantly premium because we are paying more for inputs and as you identified the health status has
▶ 3:17:49do you think consolidation has reduced the amount of costs that have gone up
▶ 3:17:53consolidation actually should take friction out drive affordability and drive simplicity,
▶ 3:17:58but it but it hasn't worked. You would expect in a in a in in if a marketplace is working properly that perhaps under consolidation we would see uh lower or at least slower growing premiums in highly concentrated markets. But that's just simply not uh happening today. But I see I'm out of time. Uh Mr. Chairman, thank you.
▶ 3:18:16Thank you, Miss Chu. Uh, Miss Rashonda Young, I want to thank you for your very poignant story uh about your ACA premium tax credits expiring, making your cost go up $498 a month in the midst of you being a breast cancer survivor. And you remind us that right now millions of Americans are watching their health care costs explode because Republicans chose to let the ACA enhanced premium tax credits expire.
▶ 3:18:45Families are being forced to downgrade their coverage, take on crushing deductibles, or go without care altogether. Small business owners like yourself and self-employed workers are being punished simply for trying to stay insured. In my home state of California, we can already see the consequences. Covered California has found that when people are forced out of silver plans and onto bronze plans because premiums have become unaffordable, outofpocket costs double on average.
▶ 3:19:14For pregnancy and delivery, that means more than $3,800 in additional costs. For breast or con prostate cancer, it means about $1,800 more just to get the same care. So, I want to say this plainly. Any minute this committee spends not focused on fixing this ACA premium crisis is a waste of Congress's time and the American people's time. We know what the problem is.
▶ 3:19:43We know what the solution is and every day we delay. People pay the price with their health, their financial security and their livelihoods. Now I'd like to turn to an issue that is very dear to me. Um, it today marks the anniversary of the Supreme Court's Row versus Wade decision, a landmark ruling that for nearly half a century recognized a constitutional right to abortion.
▶ 3:20:08It's been four years since that right was stripped away, and the consequences have been devastating for people across this country, particularly those living in states with extreme abortion bans. In the wake of the DOS decision, access to contraception has become more critical than ever as it's often the only remaining tool that women have to control their reproductive health.
▶ 3:20:32As chair of the Reproductive Freedom Caucus Contraception Task Force, I've spent years pushing it back back against the insurer non-compliance with the Affordable Care Acts contraceptive coverage requirement.
▶ 3:20:45But women are still being denied coverage for newer innovative contraceptive products that are required by law to be covered at Just in this last year, uh, United Healthcare and Blue Shield of California were both subject to enforcement actions and fines for illegally charging cost sharing or denying coverage for contraceptive care in direct violation of federal and state law.
▶ 3:21:12Under federal law, insurers are required to cover all FDA approved contraceptive methods when prescribed by a physician with zero out-ofpocket cost to patients. Yet, many insurers remain persistently non-compliant, imposing formularies, administrative hurdles, and cost sharing that unlawfully restricts access. So, I'd like to ask Mr. Hemsley and Mr.
▶ 3:21:36Marovich, what can you do to remove the hurdles that your organizations have in place for contraceptive care and will you commit to removing the hurdles that have made accessing contraceptive methods more difficult? Mr. Helson?
▶ 3:21:50Yes, thank you for the question. I was not aware of that situation specifically. Um uh we will abide by uh the law with respect to uh coverage in this area and uh I will go back and make sure that that is enforced in our
▶ 3:22:07I deeply appreciate that. Thank you, Mr.
▶ 3:22:09Oh yes, we abide by all federal and state laws and regulations. We certainly will this one and the only reason um that happened is human error and we just need to address it.
▶ 3:22:20Thank you so much. And now I'd like to ask about vaccines because we all know they are the most effective and cost-effective tools in modern medicine, preventing serious illnesses, reducing long-term health care costs, and protecting public health. But recently, uh, HHS Secretary RFK made the ill-informed decision to drop the long-standing recommendation that in infants be given hepatitis B vaccines at birth.
▶ 3:22:46Because of this seriousness of this mood uh move, I asked uh I had a letter where a hund Democrats requested the GAO do a study on the ill effects. One one thing we do know is that it will damage many Asian-American Native Hawaiians and Pacific Islanders who are only 7% of the US population yet account for 60% of these cases.
▶ 3:23:10So I want to ask each of the CEOs today, will your co company commit to covering vaccines recommended by a patient's physician, including the hepatitis Bdosese vaccine with no cost sharing regardless of uh whatever decisions there are. But because these are very important for public health decisions. Yes.
▶ 3:23:36We we um abide by all, you know, historic vaccine um coverage. We have comprehensive coverage and we allow the consumer and the doctor to make the
▶ 3:23:48Yes, there's no change to our policy.
▶ 3:23:50Our coverage has not changed. We abide by all laws and also decisions to be made between clinics and patients and we follow ASIP and other society.
▶ 3:23:58Similar for us, our policy has not changed. We have comprehensive coverage.
▶ 3:24:02I deeply appreciate those answers. Thank
▶ 3:24:05Mr. Hearn.
▶ 3:24:07Thank you, Mr. Chairman, for holding this hearing. Thanks to the witnesses for all being here today. It's been a long day for you. Appreciate you being here answering questions. Healthc care has changed drastically in my lifetime. While this great treatments and technologies have vastly improved, the complexity of health care has made it nearly impossible for Americans to navigate. I continuously hear how individuals don't feel like they're in the driver's seat when it comes to their own health care. They feel that their HR departments choose their plan. Their plan chooses their doctors and the patient is entirely left out.
▶ 3:24:37The experiment of Obamacare has failed is the unaffordable care act and we see it in real time now. Patients want to be in charge of their health care. They don't want the government or the insurance companies controlling it. They're understandably want to be their own decision maker.
▶ 3:24:54The pressure is on everyone on both sides of the aisle and across the industries to lower the health care costs for all 344 million Americans, not just spend 40, 50 billion a year on just a few, the 4%. Miss Budro, what are you doing to support getting patients back in the driver's seat of the decision-making process? And how are you, as CEO involved in improving beneficiary satisfaction and Thank you for the question.
▶ 3:25:25As I shared, we have two priorities. One, to reduce the cost of health care and make the system simpler for everyone. For patients, we have dedicated a significant amount of resources around simplification, transparency, and really just common language so they can understand what they're getting their their programs. We've also invested significantly in technology to assist patients in making decisions and understanding their coverage and going onto our systems.
▶ 3:25:53Um, equally we think it's important to to invest with care providers so that we can share data to make real-time decisions to make simply make it simpler for patients to take them out of the middle. And so those are all commitments that we think are important. And finally, I would say really focused on prevention and health and paying for value so that we are focused on outcomes, not just activity.
▶ 3:26:17I I want to highlight a particular story from a constituent back in Oklahoma. She's self-employed and has had the same go-level PO plan since 2019. In 2021, she saw her neurologist in Oklahoma, was advised to go to the Mayo Clinic in Minnesota. She went to Mayo, got her tests, saw a multitude of specialists, and was diagnosed with MS at 35 years old. And while that was hard news to hear, her health insurance covered nearly all of the services she received at the Mayo Clinic.
▶ 3:26:46So, she wasn't hit with a huge hospital bill. Two years later, she had new symptoms as once again was advised to go to the Mayo Clinic. This time, she was hit with nearly a $10,000 bill. Turns out her goal level PO plan was no longer covering out of state services, even if the services were not easy to come by in our home state. The next year, she saw her premiums increase nearly 60%. She, like many others, are now paying more for less. And it's not just the marketplace.
▶ 3:27:13Americans on employer sponsored plans are experiencing the same exact thing. I think it's fair to say with the massive amounts of federal tax dollars insurers collect that you bear some of the responsibility to fix the healthc care affordability issue in this country. You all are very talented CEOs. You get paid well. You have great companies. We all got to be in this together. While it's input cost, we all understand how the insurance markets works.
▶ 3:27:38Whether it's auto insurance, home insurance, life insurance, health insurance, we all have to work together to address all cost. Mr. Mr. Cordani, I I understand that input costs are rising, but the American people are fed up with the rising premiums and out-of- pocket premium cost or pocket costs.
▶ 3:27:54As the insurer, what is your answer to the Americans that are in the room and those who are watching and those who will watch this for a long time, both today's hearing and here and in energy and commerce this morning that they're believe they're paying too much for far too little.
▶ 3:28:12Thank you for the question, sir. First, we believe there's an affordability crisis, and it starts with the cost crisis we've been talking about. For the American people to get the best possible health care, we need to make it easier for individuals to actively manage their health with their physicians and stay healthy or lower the health risk in the first place. There are many bright spots around that in the employer sponsored marketplace and harnessing technology and bringing more personalization is mission critical relative to that.
▶ 3:28:38On the other side, if one is dealing with a chronic illness, helping individuals have total access to the medications that are life sustaining at low or no cost are mission critical. And then lastly, determining whether or not an individual wants to be self-navigated in the health care system or physician navigated. If you want to be self-navigated, supporting them with the tools to make decisions and then supporting them with a physician. If you want to be physician navigated, actively paying the physician on clinical outcomes in support of those individuals.
▶ 3:29:07We find that the best outcomes for Americans happen when we are able to harness each one of those three initiatives. When we don't, we have more variability. We have people in healthy at risk status that end up in a chronic or acute situation. When we harness those, we get better outcomes for the benefit of Americans and lower or more sustained costs.
▶ 3:29:27Mr. Chairman, thank you so much. And I yield back.
▶ 3:29:29Thank you, Mr. Kustoff.
▶ 3:29:31Thank you, Mr. Chairman, and thank you for the witnesses for appearing today. I in preparation for today's hearing and I went through all your testimonies where you cite uh all the different reasons for rising cost and healthc care. There was an article in the Wall Street Journal. Uh the headline is generic drugs should be cheap but insurers are charging thousands of dollars for them.
▶ 3:29:57It's an article dated uh September 2023 by Joseph Walker. Let me read a couple of sentences. It starts out by saying, "The cancer went generic in 2016 and can be bought today for as little as $55 a month, but many patients insurance plans are paying more than 100 times that." CVS Health and Sigma charge
▶ 3:30:27$6,600 a month or more for gleevic prescriptions. a Wall Street Journal analysis of pricing data found they are able to do that because they set the prices witharmacies which they sometimes own. So Mr.
▶ 3:30:44Joiner if I could with you for the people who are watching this hearing can you explain the logic in charging $6,600 a month for that drug when they could get it generically for as little as $55 per month? Yeah, Congressman, that is a that's a very good question. And I would say back in 2023, there was what we would call cross cross subsidized pricing where the the uh the generics subsidized the brand.
▶ 3:31:13So it was the way in which we contracted with our clients. Um we made a commitment and actually have been migrating towards a new model which actually moves closer to the acquisition cost which solves the problem and solves the issue that was that was described in the Wall Street Journal. So it wasn't the Wall Street Journal article. It was our movement to try to create more transparency, not just for the client, but ultimately moving the price and the acquisition cost closer to the consumer.
▶ 3:31:39So the consumer transparency is where the market has moved to, and we believe we've been the leader in the in the market to accomplish that. I I don't know that anybody who's watching would understand what you said. So let me let me ask you a different way. Would you concede that charging $6,600 for a generic drug that can cost the consumer $55 per month is not logical?
▶ 3:32:02I I completely agree. It's it's a lot. But I was I would just say that from a client contract standpoint, we create a significant savings for the clients and that is why and that's what prompted the push towards now moving to consumer transparency. And again, as a leader in that in that push, we believe we've actually solved the uh the problem on behalf of the consumer and the clients.
▶ 3:32:23Mr. Chairman, I'd ask that this Wall Street Journal article be submitted for the record without objection.
▶ 3:32:28So moved.
▶ 3:32:30Mr. Joiner, if I if I could, let me ask you a different question. Let's assume that we have an Etna insured and she walks into a minute clinic to get treatment and her prescription is filled by CVS Caremark. Can you walk me through the cash flow on It would work very similar to how healthcare works today.
▶ 3:32:56And I would say from the coordination standpoint and from a consumer experience, we have basically taken the process, the scheduling and the logistics out of the consumer's hands. We've actually improved the way in which they're be able they're able to access lowcost health care which is the Menac Clinic. It is a lowcost retail acute clinic setting to deal with cough, cold, and flu. And then now they have the convenience of getting a prescription next door.
▶ 3:33:23So, from a c customer completely better than what exists today by having to go to potentially two or three different uh settings in order to get the same treatment for the flu andor for some virus you may have.
▶ 3:33:36Got it. Walk me through the cash flow from the time that the payment hits Etna all the way down the chain in that
▶ 3:33:46Uh so, Minute Clinic would charge their service although that is contracted with the client. So as we look downstream we offer no cost plans to our customers. So in some respects it could be zero for the consumer um to it to go to a minute clinic and because now we are actually also prescribing we are we were migrating to very lowcost products.
▶ 3:34:09So um this would include the highest generic dispensing rate which actually is in many respects you know less than $5 you know $8 for a u for the medication. So it's a really valueoriented um transaction and I think the consumers have really positive experience with their amended clinic and they have very positive experience [clears throat] with the pharmacists feeling like they have a care team that is focused on their health and focus on getting them healthy for um you know for the conditions they have.
▶ 3:34:38I'll let the consumers see if they understand what you just said. Thank you very much. I'll yield back.
▶ 3:34:43Gentleman yields. Miss Moore. Thank you so much, Mr. Chairman, and let me just start out by thanking Miss Young for her very compelling testimony. Uh, let me just say that small businesses account for 46% of private sector jobs and they account for over half of all new jobs in any given year.
▶ 3:35:07And as a matter of fact, [clears throat] between 2023 and 2024, of all new jobs were created by small businesses. So, small businesses have an outsiz impact on the United States uh gross domestic product.
▶ 3:35:25And though my colleagues, Republicans have tried to destroy and undermine the ACA since its not only would it impede health care, but it would be a draconian blow to our economy. So, I just want to thank you for being here. You know, we've heard all kinds of uh reasons and excuses of blame shifted on whose fault it is that healthcare premiums are so um so high.
▶ 3:35:55Um you know, some just quite frankly say, "Oh, it's because of Obamacare. It's the 20 million people job creators that have caused the problem." We've heard that it was bad actors, higher intensity of care. I was listening. Bureaucratic red tape, medical devices, pharmaceutical companies, and of course the villainous triplets, waste, fraud, and abuse.
▶ 3:36:24But I I really I was I was about to just scream hallelujah and do the holy dance around here when I heard Sharon uh Chairman Smith ask all of you all if if whether or not you engaged in this sort of vertical integration of services like owning PBMs and surgical clinics and [clears throat] um banks that finance health care systems.
▶ 3:36:52And so, um, I'm I'm wondering just very quick if any of you think I know this is a sacred cow perhaps, but do you think that that contributes at all to the higher costs, the vertical integration? Yes or no? nobody wants to answer. Okay. How about the profits that the health insurance companies get? does that, you know, none of you really talk about much about how that may contribute.
▶ 3:37:23Uh, and of course CEO compensation. Nobody wants to answer that. Okay, no problem. What about you say I heard you say particularly you Miss Bordeaux say that comp competition would help lower the cost curve.
▶ 3:37:42So, I'm wondering if you support the notion of, say, a public option where we'd have some making, say, $250,000 a year, you know, 1% of the $25 million you guys make. Do you think that competition uh and like generic drugs that that would reduce the cost curve at all?
▶ 3:38:05Thank you for the question. Um, no. No, I don't support a public option because we haven't seen where it exists lower premiums and the actual impact of
▶ 3:38:15you don't you don't think that a public option would provide the competition? You said that all of you all are in competition. You don't think the public option would be a competition for your
▶ 3:38:25So, we support competition but a public option in the states where we
▶ 3:38:29it would be it would be a competition for you. Let me just ask you this. Um how about transparency? Uh, you know, some an MRI might cost 1,500 bucks, you know, at 10:00 a.m. and at 400 p.m. somebody else walks in and their MI MRI would cost $2,500. Do you think that the lack of transparency has any contribution to rising costs? We don't know.
▶ 3:38:57We don't know what we what the value and cost is of u of medical u products. [snorts] We support transparency and for that very reason we think consumers have a right to know and compare costs. We try to help them do that with support on our websites but we also need
▶ 3:39:16we would um strongly recommend that also hospitals transparent prices become
▶ 3:39:21I would agree with you. I would also agree with what so many of my colleagues on a bipartisan basis [clears throat] has said about prior authorization. I mean, I know physicians personally who've spent hours on the phone debating and begging you guys to give them authorization.
▶ 3:39:39Just recently, I knew a patient who was 30 years old, had brain um, and had to be on and when they went in and found that she had she needed two stints instead of one in her brain. They were on the phone for hours begging you all to let them keep her in the ICU overnight.
▶ 3:39:59So, um I am not it's not really clear to me um that uh that we can bend the cost curve at all if some of the sacred cows that you all have um uh are not just laid down to die. I thank you all for your patience. Thank you, Mr. Chairman, for your indulgence. And thank you for your patience here all day. We've kept you a long time. I yield
▶ 3:40:24Thank you, Miss Moore. I now yield to myself for questioning. Thank you all for being here today. Year after year, uh my constituents in Bucks and Montgomery counties in Pennsylvania are seeing like so many districts across America, rising health care costs that are not, uh isolated to just health insurance premiums, but rather all aspects of care and treatment. Small businesses have been forced to make tough uh decisions to address insurance costs.
▶ 3:40:48and our seniors uh largely living on fixed incomes have increasingly had to pay more for essential medications and treatments. Um and as been mentioned by so many of my colleagues, the rapid uh horizontal uh consolidation and vertical integration of virtually all aspects of the healthcare industry have intensified the need for transparency and the adoption of policies to ensure that insurers are acting as responsible stewards of people's hard-earned money.
▶ 3:41:17with the three largest health insurers controlling 40% of the commercial and the Medicare advantage market as well as the three largest PBMs controlling 80% of the far pharmacy benefit market. There are legitimate concerns by a lot of our uh residents back home on how patients will be adversely impacted by this unprecedented market power. Patients must continue to have access to robust provider networks and comprehensive and affordable drug formularies.
▶ 3:41:47Um, as many of you know, states have been increasingly adopting policies for state regulated uh health insurance plans to address the increasing costs for patients uh both in private and public marketplaces. In fact, over 20 states have now adopted legislation to cap monthly out-of- pocket costs uh for insulin uh in in uh in state regulated plans.
▶ 3:42:11Uh in my home state in Pennsylvania, for example, state regulated health plans uh now cover comprehensive biomarker testing uh leading to more targeted treatments such as precision medicine which can lower costs for cancer treatment u and improve quality of life. I've uh my first question is regard to a uh bipartisan biccameal piece of legislation. Just need to know if anyone's opposed to it. Um it's referred to as the patients deserve price tags act.
▶ 3:42:37Um 61% of non-Medare patients get their insurance through their employer. Uh yet uh these employers are unable to see their own claims data uh for their employees. Again, it's a two-party bill in both chambers. Uh is anyone opposed to that Okay. Thank you. Uh Mr.
▶ 3:42:57Hemsley, um given United Health Group's uh geographic footprint uh and your testimony on value based care, what trends are you seeing across states um that have been effective in addressing the affordability crisis uh in healthcare? Um can these efforts be uh in any way replicated at the federal level? For example, the instance I just gave you in the state of Pennsylvania?
▶ 3:43:21Uh well, thank you for the uh question. Um I if the pursuit of a valuebased care model um where we have um been able to establish that for a long enough period of time we've seen kind of a reduction of about 200 basis points about 2% uh in the cost trends in populations that we've been able to manage. We've been able to have continuity of care over them.
▶ 3:43:49Um being able to get them to the right care at the right place at the right time, get them in a better condition of health. We have seen that the cost trends for them um do step down. Our experiences have been about 200 basis points.
▶ 3:44:05Thank you, sir. Next, I want to uh discuss steps being taken to address the burdens in care created by prior authorization uh as well as step therapy requirements. Um Mr. Cordani, um can you speak to Sigma's um reform surrounding uh your prior authorization policy and how these changes uh you believe will translate into better care for patients uh and reduce the administrative burden for providers who are already facing as we've heard today uh significant uh administrative burdens and challenges.
▶ 3:44:35Congressman, thank you for the question. Approximately 95% a little over 95% of all of our customer experiences in the commercial market are not exposed to prior authorization. So around 4% 4 and a half% or so. First um we committed to reduce the number of um activities that were exposed to prior authorization. This past year we reduced that number by 15%. Second advanced automation and interaction with providers.
▶ 3:44:59We have about 78% of all prior authorizations now are immediately or near immediately meaning within seconds um determined and resolved. and we are committed to further reduce the total number of prior authorizations and increase that number from 78% to 90% in the foreseeable future. So reducing the number getting to near real time and then ensuring that a clinical professional always looks at the residual um items that need to be manually reviewed. I think I speak on behalf of the vast majority of Americans that we need to get back to the basics.
▶ 3:45:28Get back to the basic doctor patient relationship. all this horizontal consolidation, vertical integration has really created so many burdens, so many barriers, so many cost drivers that are not necessary. Um, and that's got to be our goal here. And I yield back. And now I yield to Miss Miller from West Thank you, Mr. Chairman, and thank you all for being here today. I know it's been a long day.
▶ 3:45:51In my home state of West Virginia, distance provider shortages and limited hospital capacity already makes accessing care a challenge and affordability is really inseparable from access. Insurance companies frequently site drug costs as a driver of premium increases, but according to the insurance industry's own data, brand medicines make up less than 10 cents of every premium dollar.
▶ 3:46:21While hospital consolidation and drug prices do play a role in overall health care costs, I want to focus today on factors within insurers control. Analysis shows that administrative overhead, insurer profit margins, and PBM related practices account for a significant share of premium spending.
▶ 3:46:44Roughly 16 cents of every premium dollar goes to profits and administrative costs, making overhead the second largest category of premium spending. Without profit, you close your doors. I understand that. I own a business. But this exceeds spending on medicines and physician services. That being said, Mr.
▶ 3:47:05Hemsley, can you walk us through the top insurerdriven drivers of premium growth and explain why patients especially in rural areas are paying more while getting less excess?
▶ 3:47:19Um well again a very good uh question representative. Thank you for bringing it forward. Um as we have said um the input costs 70 more than 70% of the total cost actual cost of health care services have been inflating at a rate of three times the normal the general inflation rate for more than 25 years and that has created very significant pressure.
▶ 3:47:49Businesses like ours um have reduced those uh cost trends. Those are those are net of us taking $300 billion of costs out of uh these increases by better negotiations, by better data, by better coordination and you still get these um significant cost increases.
▶ 3:48:11Those are the by far the largest factors completely that we can get a better system and we all have a role to play in it. But it is the cost trends and the compounding impact of these trends being higher than general inflation that is really driving uh the affordability
▶ 3:48:31But West Virginiaians are already stretched thin by rising premiums, deductibles, and out-ofpocket costs and prescription drug pricing is also a major contributor to that burden. Data specific to West Virginia shows that Medicare program is being charged outlandishly different prices for the exact same drug within the same time frame.
▶ 3:48:53For example, a matatonab a leukemia drug was build to Medicare on the low end at $75 and on the high end exceeding $8,000. These prices are not set by patients or providers, but by the insurers and their vertically integrated PBMs. Some would allege that disparities are the result of insurers gaming the medical loss ratio.
▶ 3:49:18Gaming like that to artificially inflate medical spending, allowing the profits to flow through affiliated entities while driving up costs for seniors and taxpayers. Mr. Joiner, what effect do these pricing practices have on West Virginiaians who rely on these drugs to survive? And how do you justify such extreme price variations for the same medication when your company controls the benefit design, pharmacy networks, and reinbursement structure?
▶ 3:49:50Yeah, Congresswoman, this is a it's a very good question. And if I look more broadly, um, the drug manufacturers, I'll just look just January uh, 1st of this year, 500 plus drugs took a price increase. So if I if I took that price increase for the drugs on the branded manufacturers for uh, for this past January, it represented almost $25 billion of added cost to uh, to the customers that we serve.
▶ 3:50:15So the role that we play and the importance of a PBM is to negotiate down and actually lower the cost for the for the folks in West Virginia. So we're trying to do our job in creating competition and making sure that gets passed down not just to the clients but the importance of consumer transparency and making sure those discounts then flow all the way through to the consumer.
▶ 3:50:36Thank you. One final point. Many of your industry plans do not cover vaseif. I know them primarily as just kidney drugs, but access to these medications would dramatically increase quality of care as well as reduce the cost for both insurers and taxpayers.
▶ 3:51:00I don't want that answer now, but I do want you all to go back and talk to your teams internally and find out why these drugs are not covered. We have a lot of kidney disease that we deal with in my state when you go through the obesity, the diabetes, the kidney disease. We need access and so please discuss it and figure out how we can handle this. Mr. Chairman, I yield back.
▶ 3:51:26Mr. Byer.
▶ 3:51:27Mr. Chairman, thank you very much. And this has been a remarkable hearing for me because I can't remember ever being in such [snorts] agreement with most of my Republican colleagues on their comments. Um, and I do want to thank Congressman Hearn for pointing out that nonaca costs are rising too. In fact, I think only Congressman Kelly's older than I am on the dis here and can remember how quickly me healthcare costs were rising before the Affordable Care Act. Uh, I also was in the car business.
▶ 3:51:55I go back to when we paid for all the health insurance for our employees and their families and then we had to exclude their families. Then we had to start charging the employees because they were going up so very quickly. That was the reason we had the Affordable Care Act in the first place. So Mr. Helmsley did a little quick research. Switzerland 12.2% of their GDP on health care with is the life expectancy. Denmark 10% GDP life expectancy 83.
▶ 3:52:26Italy 8.4% life expect 84. OECD overall 9.3% life expectancy in 81. And here's the United States somewhere between 18 and a half and 20% with a life expectancy of only 78 years old. I love American exceptionalism, but why are we exceptional in this? Why have so many other first world countries figured out how to do this and we have not?
▶ 3:52:50Um we have a system representative and again excellent uh point. We have a system that drives uh volume over value and outcomes and we have a system that uh drives uh very strong pricing.
▶ 3:53:09So if you take a look at this issue for probably more than 30 years, academic research and real world uh experience suggest it is the prices the in and the service level the use levels of health care services and it is what we are um focused on all the time to reduce and keep moderating those costs in a environment where volumes are um
▶ 3:53:39are are predominant when it value should really be the predominant uh force in evaluation. So we believe that a drive towards a valuebased care incentivized system to to the value and the health status of an individual will over years uh pull these trends back into a more no more state and head toward the direction that you you're seeing. And you can see
▶ 3:54:03when you see the difference in comparable services and comparable uh product costs when you compare those countries that you suggest to the United
▶ 3:54:13Yeah. Yeah. I know. I I I had the good fortune to live in Switzerland for four years and the healthcare was excellent. Mr. Marovich, have you seen California other places the impact of private equity on your costs? I noticed there are 10 states now that are trying to regulate private equity in the healthcare space after the bankruptcy of Steuart Healthcare and Prospect Medical
▶ 3:54:35Yeah, we we have seen some impact. I don't think we've uh seen it necessarily as much as perhaps other states have u Mrs. Budro is talking about the fact that on the independent dispute resolution that's probably the place the industry at large is seeing it the most where private equity back providers are swamping the system with these requests for ind independent dispute resolution and really using it as a profit engine simply to drive costs up.
▶ 3:55:03Um there has been some acquisitions of providers but I do think the regulatory environment in California has uh limited the impact more in that state than than I've seen uh outside the state.
▶ 3:55:15Okay, Miss Budro Eleance Health when you were Anthem settled a claim for denying mental health and substance abuse disorder treatment. Uh have you updated the medical necessity guidelines to generally accept the standards to avoid this in the future?
▶ 3:55:30Thank you, Congressman. Um, we are very compliant. We settled that. It was an older case and did not have liability, but we decided that it made sense because the longstanding litigation, but we are absolutely have a strong compliance program around making sure that our mental um health parody is followed across all of our plans.
▶ 3:55:50Very good. Thank you. U Mr. Joiner, if you want to pile on to Mr. Helmsley's in terms of perhaps your perspective in 30 seconds about why our system is so different, so much less efficient and with worse outcomes.
▶ 3:56:05Yeah, I I think I'm I'm consistent with his views today. we um we have a system that actually rewards those for more volume and um I believe we need to have a strong movement towards getting alignment between the plans and the providers to focus on the outcomes of the of the patients in which they serve. And until we get there, I think we're going to be challenged with the with the growth on the utilization and the rates of u the services being provided.
▶ 3:56:32I also think that technology is going to be a breakthrough and this is what we haven't talked a lot about in the hearing today but I think technology has an opportunity to solve for the interoperability challenges that makes healthc care so frustrating for the patients the systems don't talk to the plans the patients stuck in the middle and I think there's a really strong movement towards having technology solve and actually connect the providers across the system to serve the patients
▶ 3:56:58great thank you very much and I yield Miss Tenny,
▶ 3:57:03thank you, Mr. Chairman, and thank you to the panel for being here. I know it's been a long day. Uh, I everybody's heard this, but I'm also a small business owner like Miss Miller, but you know, Americans are paying more and more for health insurance, and they're getting less in return. Higher premiums, high deductibles. I can speak for that myself. Narrower networks, fewer doctors, and for the small businesses, there are fewer options in competitiveness. It's been 15 years uh since Obamacare became law, and the results are clear. The premiums continue to go up. by the way, at exponential rates.
▶ 3:57:32I know the Democrats want to say they were already going up, but I can see the huge difference just from 2010 into now, you know, from hundreds to thousands more each year. U and the insurers, and I'm just going to be honest, are seem to be rewarded for price increases at the expense of the families and taxpayers. That's not market competition, and that's what we're looking for. This is a uh inflation in health care and more about health care really than it is about getting better medical outcomes.
▶ 3:58:02Uh meanwhile, as I said, small businesses who try to do the right thing, provide health care for their their families like we do in our rural area in upstate New York, we're priced out. Um and I come from New York and I have to say that no state is more reflective of the systemic failure than the state of New York. uh which now holds the number one spot for the highest employer sponsored coverage premiums in the nation. And I'll just, you know, from a personal example, I was just talking to my brother who runs our company.
▶ 3:58:28Um $36,000 a year for a family plan and 16,000 of that we have to self-insure because we just simply can't afford it in rural upstate New York. 19,000 for a single plan. Uh 8,000 of that is self-insured. So we take the risk as as a business. It could wipe us out with a catastrophic injury. So this this is the kind of stuff that small businesses are being forced to to be in. And I know Miss Moore talked about small businesses.
▶ 3:58:53Well, she said 89% of the people in her communities or in the country go to work in a small business. But in my district, it's 95% of the workers go to a small business. We just don't have any options and we have to provide healthcare because we have uh over 50 employees. So we have to comply with the with the healthcare act. But I want to talk about the role of consolidation and vertical integration um and and kind of go down a similar path that Miss Miller went down. And I hate to keep picking on you, Mr. Hemley, but you got you're from United Health, so you I think you can take it.
▶ 3:59:24Um look, you you have obviously, you know, the largest most prolific uh healthc care provider uh healthcare insurance company maybe. Um and the nation's uh this is concerns me the nation's largest employer of physicians. Why is that insurance company employing physicians? Shouldn't that be separate? Uh, and one of the big three PBMs, uh, pharmacy benefit managers to name a few, businesses, all integ vertically integrated and a very robust portfolio.
▶ 3:59:53But let's say I enroll in one of your Obamacare plans, uh, through the ind individual marketplace with an 80% medical loss ratio. The MLR is calculated at the insurance entity level, not at the consolidated parent level. Is that correct? Um it's uh calculated at the legal entity level I believe.
▶ 4:00:11So is is that the same thing as a consolidated parent company level? So that would be your parent the legal when you say legal any you know that's sort of a
▶ 4:00:18well so
▶ 4:00:19ubiquitous term it's hard to hard to um respond to what I would uh
▶ 4:00:27so let me let me see if I can go to this. So, when you're in when United Healthcare contracts with Optimum RX, which is your PBM, right?
▶ 4:00:35Um to manage my prescriptions, that payment counts as medical spending under the MLR. Is that correct?
▶ 4:00:42Uh yes.
▶ 4:00:43Okay. So, when Optimum RX negotiates manufacturer rebates on prescription drugs, reducing the net cost of the drug, right?
▶ 4:00:51Uh we do. Yes.
▶ 4:00:52Okay. And so our manufacturer rebates negotiated by Optim RX on behalf of uh United Healthcare pass through to the insurance entity before the medical loss ratio is calculated. uh the costs uh do pass through to the to the benefit and the insurance.
▶ 4:01:16So that should lower premiums, right? because we're passing that cost through
▶ 4:01:19and does because we get the lowest price
▶ 4:01:23Okay. So, is it possible that these rebates negotiated by Optimum RX are retained at the PBM level or allocated elsewhere in the corporate structure?
▶ 4:01:32No, they are they are passed through.
▶ 4:01:34So, purposes of doing the MLR premium um where where are we with there? So, is that we're really just kind of using within entities. So we're really not reducing the cost to to I know this is complic we're really not reducing the cost to individuals. We're sort of moving throughout the corporate structure to get a to to meet the MLR uh requirement but still costing more via the PBM to the to the uh patients.
▶ 4:01:59Um so everything that you are uh addressing really is very intensely regulated. So there is great oversight over the arrangement.
▶ 4:02:09So let me if it's intensely regulated I'm a regul I'm I'm a member of Congress. What can I do to make sure those rates get reduced? So, it would a vertical integration bill on PBMs for a company like yours. Would you would that be something that would help reduce that rate so that we get get more transparency and a lower rate to our consumers because PBMs don't real work great in my district because I have mostly locally owned and operated uharmacies. I don't have CVS. I don't have big in vertically integrated.
▶ 4:02:35So, for us, it's really it's an I'm I'm out of time, but I wonder if you could just answer that quickly. Don't you think we need to address that that vertical integration? And I know that's a hard question for you to ask. It's part of your portfolio.
▶ 4:02:46Is there a way that we can fix that so that it's brings the cost down?
▶ 4:02:49I I think um if I could uh offer that there is a great deal of oversight and regulation already at the state insurance levels and at the federal levels to make sure that what you're suggesting does not happen. And if you look at an organization like United Health Group across all the discussion about all the elements and so forth, our net margin is 5%. So there there is no
▶ 4:03:15in which entity because you have all these multiple entities when we go back to the medical loss determination.
▶ 4:03:20We're going to have to wrap
▶ 4:03:20my I my time is expired. I thank you. Appreciate it.
▶ 4:03:23Thank you, Miss Beth Vany.
▶ 4:03:24Thank you very much, Mr. Chairman. You know, many of you may not know this. I got into politics um because when my daughter was born, she had nine surgeries on her eye. Um when she was first 12 hours old, uh first child and not at all what you'd expect. And when she was 12 hours old, she was diagnosed with a cataract. She had to have that removed. She subsequently got glaucoma and had to have a number of surgeries to fix it.
▶ 4:03:49And I remember when she was about four months old, one of the biggest surgeries she had to have two days before the surgery was denied by the insurance company, one of the insurance companies that's here today. There was one surgeon in the entire state that could do the work on her eye. One uh and because it was out of out of network, it was denied. And I remember having to go and fight, threatening actually to bring news cameras in the four-month-old down, explaining exactly what happened.
▶ 4:04:19No medical doctor, as far as I knew, had reviewed it. ended up having the surgery, fought after the after the fact. But it really drove me into running for office, having to protect her in recognizing how frustrating it was for parents and for families and for people who are going through some of the toughest times of their lives to have to fight with insurance companies.
▶ 4:04:47And since Obamacare started, we're looking at denial rates that have gone up considerably, almost 20% now, in some in some cases even more than that. We've looked at the largest health insurance companies. Your revenues have tripled in the last decade. Profits have tripled since Obamacare started. Denial rates are up and only grown the last 10 years. And almost half of the denials are overturned.
▶ 4:05:15But it's still the gut fight and having to do it and having the providers have to fight and how much time we we waste on that. You know, in in 2025, the average family premiums for employer sponsored coverage hit $27,000 annually with workers shouldering over 6,800 on that out of pocket. And for 2026, ACA marketplace premiums are surging. I mean, we're seeing averaging about what 26% more in many cases. It's driven by a lot of things.
▶ 4:05:44Unchecked hospital cost, exploding drug prices, a system rigged to make things uh, you know, not have But some on the left, I know understand, are pushing for increased subsidies. It's a band-aid. It's a band-aid solution for a broken system. And unfortunately, seems to incentivize insurers to jack up premiums knowing that the subsidies are going to follow and sticking unsubsidized families and taxpayers with the bill.
▶ 4:06:10The GAO has exposed massive fraud, $21 billion in unverified credits, fake applicants, and seemingly zero accountability. And instead of pouring more money in, we need to have ironclad reforms to root waste, fraud, and abuse out. And look, I get it. The government has not helped, right? We have we have fueled this mess. We've got layers of mandates, regulations, a one-sizefits-all marketplace that stifles innovation, and it drives up costs for everyone.
▶ 4:06:38But we also need to have some bold reforms which I'm hoping since you are so involved and as the chairman has me mentioned earlier on so involved in every aspect I we're hoping that you are going to because you do get so much money from this are going to be providing some of these solutions whether or not this is uh you know having more uh affordable care uh or I'm sorry not affordable care but associated health plans uh so that you know businesses can group together and have more competition uh slashing and identif ifying what their
▶ 4:07:08red tape looks like, expanding health savings accounts with greater flexibility. These are things that we need to do, but we also have to hold the insurance companies accountable. Demand price transparency and abuse of uh prior authorizations, denials that block care, ensure com competition forces real delivery and value or else you lose customers. And executive pay is a big deal and I know that in ENC this morning you guys had to deal with that and and and had a lot of questions.
▶ 4:07:35I haven't heard it yet from our committee, but top CEOs at some of these major payers have earned 20 to$26 million or more in recent years with pay ratios hundreds of times that of average When profits are coming from a lot of public funds, compos compensation should reward delivering affordable and accessible care and not rewarding denials or excessive overhead just by a show of hands.
▶ 4:08:00How many of your executive compensation models are tied directly to premium to claim approval rates, to patient outcomes, and then to reducing unnecessary denials given your company's scale and reliance on federal dollars.
▶ 4:08:24And I'm I'm hoping and and you don't have enough time to answer this question now, but I'm hoping that you will all recognize the responsibility that you all have to lead on Medicare reforms rather than simply operating within the broken system and just collecting federal subsidies. Thank you for your time,
▶ 4:08:41Mr. Schneider.
▶ 4:08:44Thank you, Mr. Chairman. I want to thank all of the witnesses for joining us today for your patience. I know it's been a long day. Americans are suffering from an affordability crisis and nowhere is that felt more acutely than in families healthcare spending. Since President Trump took office and Republicans took control of both the House and the Senate, American workers and their families have seen their healthcare decimated.
▶ 4:09:07Just 202 days ago, Republicans passed HR1, cutting out $1 trillion in healthc care spending in Medicaid, the children's health insurance program, Medicare. All these things were cut just 22 days ago. Republicans allowed the Affordable Care Act premium tax credits to expire, causing people's health care premiums to go up by hundreds and even thousands of dollars a month. Nationally, an average of 114%.
▶ 4:09:35Just 17 days ago, Secretary Kennedy reduced the number of vaccines routinely recommended for all children from ages 17 to 11. This adds an additional hurdle for parents to protect their children from deadly diseases. A decision not based on science, but driven by politics and wacky conspiracy theories, all at the expense of our children. Today, we're here to discuss the rising cost of health care for everyone. I have a lot of questions for our panelists, but I want to start with a few rhetoric rhetorical questions for my colleagues.
▶ 4:10:04How does implementing new layers of administrative red tape designed to keep low-income Americans off Medicaid lower the cost of healthcare? How does ending the premium sub subsidies for individuals buying insurance through the ACA marketplace lower the cost of healthare? How does cutting dollars used to serve older Americans in long-term care settings lower the cost of health care?
▶ 4:10:26How does letting children get sick or even die from preventable diseases like measles by endorsing removal of medically proven vaccines lower the cost of healthcare? Here's what I know. Policies that mean more uninsured people also mean more uncompensated care, less primary care, and people's insurance premium premiums skyrocketing for everyone who is fortunate enough to even have insurance.
▶ 4:10:52A sick or unvaccinated population leads to more kids in emergency rooms and more expensive medical bills for the average American family. Bills that many just simply cannot afford. Here's what else I know. Republican action this Congress has been instrumental in manufacturing the affordability crisis from groceries to housing and yes to healthcare.
▶ 4:11:13So my question for the the group here the the CEOs and this is a yes no question um do cuts in Medicaid and the expected loss of people losing their insurance will that contribute to rising insurance premiums? Uh Mr.
▶ 4:11:27Hensley, will the loss the fact that 10 million people are going to lose their insurance because of cuts to Medicaid, will that lead to broad increases in in health insurance premiums in the broader it will not um the costs will continue to rise.
▶ 4:11:50No, my is the fact that there's more uninsured, more uncovered care lead to premiums for those who have insurance to go up.
▶ 4:11:59Cost will create more cost in the system that will happily be addressed. Yes.
▶ 4:12:03Okay. Uh Mr. Joiner.
▶ 4:12:06Yeah. Assuming they move to an uninsured position, um then yes, premiums will go up. Uh, Miss Bordeaux,
▶ 4:12:14I don't think it's quite as simple as just that because I think there are a number of scenarios. If they go to uncompensated care will drive up costs, they also have opportunities to go into um the um uh ACA,
▶ 4:12:26but yes or no, will more uncompensated care lead to higher premiums for the rest of us?
▶ 4:12:30Uncompensated care does drive costs up.
▶ 4:12:33Mr. Marovich,
▶ 4:12:34I'm sorry.
▶ 4:12:35Yes, I believe it will.
▶ 4:12:36And Mr. Kdani, I skipped you. I'm sorry. more uncompensated care will make its way through the system in elevated cost.
▶ 4:12:42And real briefly, will more kids having measles or other preventable diseases being treated at a cost far more than the cost of of a vaccine lead to higher cost healthcare costs and higher premiums. Mr. Helmsley,
▶ 4:12:55uh, yes, higher disease levels will
▶ 4:12:57Okay. Mr. Joiner,
▶ 4:13:00Mr. Pau,
▶ 4:13:00prevention is always better. Yes,
▶ 4:13:02Miss Cordani.
▶ 4:13:05Mr. Cordani. Mr. Marovich.
▶ 4:13:07All right. So, we heard that my colleague on the other side said government dri driven healthcare inflation. The policies we have seen this year is driving healthcare inflation up. I have behind me a chart that shows the increase in measles in the last year. We are seeing an increase from two years ago 2023 of 59 cases of measles in the United States, 285 in 2024 and last year 2,242 cases.
▶ 4:13:35And the average cost for the insurance companies to pay for a measel vaccine is about $100. And the average cost to the country, to communities to take care of one child with measles averages $40,000 or more. And whenever there's an epidemic, the cost to the community to deal with that case of measles, to deal with making sure it doesn't spread can be as much as $250,000 fixed cost. These are the impacts of the policies that are being passed by this Congress, the Republicans, in the last year.
▶ 4:14:04And if we want to address health care costs, we need to work together. We need to make sure costs go down for all Americans, more people have access to quality care, access to the health insurance, and can see a doctor when they need it, wherever they are. I yield back,
▶ 4:14:17Miss Fishbach.
▶ 4:14:20Thank you, Mr. Chair. And I I just wanted to say thank you to the witnesses. I know this is a a long day and people have been running in and out, but thank you for being here. Um Mr. Mr. Hamsley, we did have the opportunity to meet I guess two days ago, yesterday, whatever day it was.
▶ 4:14:33But um I I serve a very rural area um and uh the western half of Minnesota and so obviously very concerned about the um what's going on with rural health care and um in in many of the rural counties, premiums are rising at a rate faster than in urban areas. And I'm I'm wondering why are rural families seeing some of the steepest increases? And what specifically is United Health uh doing to reverse that or help that trend?
▶ 4:15:03Um well, we do our best to uh moderate the u basic cost of health care services. Healthcare services in rural areas um um are trending up um and of many times uh those um remaining services are uh consolidated with another uh provider in the community. And when that occurs, um prices tend to go up.
▶ 4:15:31Uh but the challenge of um making sure that you have enough access um and enough um care in a rural community and the cost of that does translate into the premiums and and that's why it increases.
▶ 4:15:48Well, it it is it is a critical it's a critical part of the of the rural economy, the communities is to have healthcare and um you know when you talk about consolidation or you know if you close closing clinics, closing hospitals, that's a serious issue. But
▶ 4:16:04I do want to just focus on the insurance rural uh consumers you know already face limited plans um plan choice in rural areas and when premiums do rise across the board they have nowhere else to go. So, how do you justify these increases in markets um where you're where where you're basically the only viable option?
▶ 4:16:24Uh well, what we're trying to do is um engage and help with the rural communities in terms of um getting them care and getting them care at a lower cost. So things like um working with them and organizing how the health services in in that uh in those regions can be better organized together as well as the use of better technology like um teleaalth technologies and then as I indicated uh earlier
▶ 4:16:54we are advancing a program to see if we can um speed up the cash flow to these uh organizations. s uh really uh pursue kind of a real-time processing experience for them and get cash to them at about half the time they're getting it now. And we think that'll be a significant um help and uh the response to that has been very positive.
▶ 4:17:21Well, and and I appreciate the fact that you're trying to speed up that um you know the time that it takes those folks to get the reimbursement that they need, but but it doesn't necessarily address the the cost of the insurance that folks are paying, the healthcare insurance. But just one and and I'm obviously limited on time, so I'm asking these quickly, but um the United Health Networks and rural communities are increasingly narrow and uh and forcing patients to drive long distance.
▶ 4:17:48I mean, and that's that's that's a serious issue in in rural areas. And so, what criteria do you use when deciding um which rural providers to include or exclude from your networks? We use uh you know very u understandable factors about um um uh a access at convenience, quality um and making sure that there is enough coverage uh to
▶ 4:18:19serve those populations uh where we have uh uh insurance products.
▶ 4:18:24Okay. All right. Thank you. I do have I do have one uh question for Mr. Cordani. Um Obviously rural it's going to be a rural question but uh many rural ambulance services operate on on really thin margins barely con barely keeping uh the doors open and rural emergency care and ambulance services in my district have repeatedly come to me with a concern that they are not being reimbursed at a sustainable rate. Um is Sigma paying rural emergency medical services at a sustainable rate?
▶ 4:18:56Congresswoman, thank you for the question. I I don't have the uh rate we're paying rural uh ambulances. We could follow up with your office. I would tell you that we do have an initiative to expand both reimbursement for ruralarmacies, expand digital services for rural providers and help rural mental health providers be able to manage their administrative practices.
▶ 4:19:17So we've identified the broader issue as a problem and we're identifying parts of the ecosystem that we could be helpful in either addit reimbursement, broadening access through virtual care or helping um in the case of independent mental health providers that are rural, helping them run their practice more efficiently through some technology services we can provide them. But I could take this back and follow up with your office.
▶ 4:19:37Well, and and since I'll just I'll just kind of follow up. What I what what the real concern is is that first of all that we have the ambulance service and they're getting that they're able to sustain themselves but but they're not reimbursing sometimes, you know, they may drive out to the scene and if they if the patient won't uh you know or for some reason doesn't need to be taken to the hospital, they don't get paid for that. And that's not necessarily, you know, a a twominut uh two-minute drive. Those are sometimes very significant drives.
▶ 4:20:06And so I'd be curious if you're going to get back to my office with a lot more information about how you are reimbursing because these we're in critical times with with
▶ 4:20:14I'll take that away and follow up. Thank
▶ 4:20:16Thank you. And with that I yield back
▶ 4:20:18Mr. Moore.
▶ 4:20:19Thank you chairman. Um it's been a uh important day to be able to in two different committees of jurisdiction over healthcare to be able to have uh testimony and question and answer. Let me boil this down. So a lot of attention on today. Ultimately in 2010 the affordable care act was enacted promised affordable care. It promised that um even there was even promises made that premiums would go down.
▶ 4:20:48It just hasn't happened. So we got to get to we we got to figure this out. And if you if you look at basic economic like when you subsidize a market, particularly a service that you provide, there's just no incentive to supp to to to make the market actually reduce costs overall.
▶ 4:21:09That's why the biggest folly of it all is that as in 2021, Democrats set a four-year timeline during COVID, we're going to enhance the [clears throat] premium tax credits associated. We're going to enhance the subsidies. We're going to make it so people don't have to pay even $5 for their several thousand policies. None of those principles would ever keep costs down or even encourage costs to even grow at a simple rate of inflation, right?
▶ 4:21:38And then when those costs when those premiums those COVID era premiums it's all a sudden Republican's fault that it happened, right? And we're all focused and we're dealing with this um Mr. There's a poll in Utah recently and it wasn't just focused on the sliver of folks that are on the this ACA plan. Broad approach said look health care costs are way too expensive. Our premium costs are way too expensive. We've got to figure that out.
▶ 4:22:07So I have I have I have just a couple quick questions and um to be able to dig into this. Americans deserve transparency on this. This is the point we have to drive home. Mr. Mr. Cordani, uh, big player in Utah. Your company is, uh, is significant there. Youngest state in the nation, relatively one of the healthiest states in the nation. Uh, we are not a big burden on on this ultimately.
▶ 4:22:29What kind of confidence can you give to my constituents that you're actually focused on helping drive costs down, not just encouraging more subsidy so this continues to go up and out of control?
▶ 4:22:41Congressman, thank you for the question. As I noted previously, the Affordable Care Act or the Exchange lives make up about 1% of our company and we make about 1% of the exchange. So, my comments are going to be relative to the employer marketplace more broadly. In the employer marketplace in Utah, um we are typically a leader in what's referred to as self-funded programs. So, it has total transparency with the employer.
▶ 4:23:05The employer sees their spending every month and we could work with them to put programs in place to elevate prevention, optimize care for chronic care, and get the centers of excellence when acute situations transpire. We could leverage virtual care. We could leverage on-site clinics, etc. When we pull that recipe together, we're dealing with low singledigit rate increases. When those programs are not pulled together, you're dealing with double-digit rate increases.
▶ 4:23:31So in a community like yours where there's an active outdoor community, a very active employer [snorts] community that leverages their culture and their strategy to activate their colleagues. We tend to have better opportunities through the self-funded programs to drive prevention, drive chronic care programs with little to no cost to the individuals for their generic pharmaceuticals and then get to more center of excellence or navigate a care support going forward.
▶ 4:23:56the the broader outcomes for the better side of that seeing the lower that we have to see those outcomes. I encourage you to focus just double your efforts, triple your efforts on making sure that those type outcomes can be can be um experienced by more because it's not being felt. I love that we've got some options to make it happen. Triple your efforts on that. Uh and and and I and I take that, you know, as kind of guidance for everybody. This has to improve. Mr.
▶ 4:24:24Helmsley, um you made an announcement that United's going to provide rebates to Obamacare customers. Um would love just a little bit more detail on this there. I'm going to give you the benefit of the doubt that it's not just because we're going to have a major healthcare day today and there's a lot of frustration and and and fingerpointing like is this going to be something that's sustainable now that there's been the expiry of the COVID tax credits? Is this something that you're going to do to help compensate for some of those increased costs with folks? What's the plan here?
▶ 4:24:53And how's this going to benefit folks?
▶ 4:24:57Excuse me. Thank you for the the question. Um it is with the hope that we do uh go forward with some uh bipartisan solutions about how um you can provide coverage to these individuals who are um in this marketplace and uh with broader ideas because as you pointed out very rightfully this isn't just the ACA this is health care costs at large
▶ 4:25:28and uh the broadly. So with that in mind, we wanted to take the notion of uh profit kind of off the table and suggest that we will forgo profits and rebate um and with the hope that there will be solutions to um coverage and uh care for these individuals uh coming forward from these
▶ 4:25:54Thank you. I'm never going to disparage profits or growth in the stock market, all that kind, but it can't be on the backs of taxpayer subsidies. That's the point that we have to. So, you've got to kind of find these solutions. Don't use this as a one-time moment. Make this sustainable so we can actually see improvement there. Thank you, and I yield back,
▶ 4:26:09Mr. Petta.
▶ 4:26:10Thank you, Mr. Chairman. Thanks to all the witnesses for not only your testimony today. I know you guys probably prepared uh quite extensively to be here. Uh so I appreciate this opportunity because it really is a chance for us to address an issue that we've been hearing a lot about. Uh and that's the barriers to accessing a commercial insurance plan affordably.
▶ 4:26:31Uh it's a good opportunity to discuss the serious complex challenges facing our health system, but also the potential for bipartisan common sense long-term reforms that I believe we should be pursuing when it comes to our health insurance. Now, this is my second hearing this week on healthc care. Uh, and as you've seen, uh, and I think as you understand, it could easily delve into partisanship.
▶ 4:26:56And I get it, there were some pretty partisan bills passed into law this year that cut healthcare and increase prices for healthcare insurance. But as we've heard, there are chances for bipartisanship that could restore Medicaid, extend the ACA tax credits along with a long-term compromise of reforms to fight fraud and overhaul insurance policy.
▶ 4:27:17And I hope that the current majority chooses to work with us on that type of policy rather than put forward another partisan reconciliation bill, especially when it comes to healthcare fixes that add to our debt and deficit. Now with that said, I would like to focus on an area where we do have bipartisan cooperation in the insurance space and it's address it's about addressing ghost networks and Medicare advantage.
▶ 4:27:42Now I admit that when it comes to healthcare, my top priority in Medicare policy uh is Medicare policy and working with Dr. Murphy uh Greg Murphy on this committee to find a fix for traditional Medicare payment reform. However, I also want to talk about a piece of legislation that I helped author called the Real Health Providers Act. It's a bipartisan piece of legislation that would address the so-called Ghost Networks.
▶ 4:28:08The bill, all it would do require Medicare Advantage insurance plans to update their provider directories annually. It would also require those insurance plans to honor the in-et network price if they mistakenly list a provider that they no longer accept. The bill, if signed into law, would mean that patients on Medicare Advantage plans would erase ghost networks and the build and build a reliable health system for our patients and our constituents.
▶ 4:28:38First, Mr. Mr. Chairman, I ask unanimous consent to submit for the record this letter from Mental Health America regarding the Real Health Providers Act and other issues before this committee. Without objection. Thank you. And my question to our panelists, uh, would, and we can just go down the line starting with Mr. Helmsley, would you support this type of legislation and other efforts to regulate and reign in ghost networks?
▶ 4:29:04Um, Congressman, thank you for the question. Um I'm not familiar with the legislation, but we would definitely be aligned with making sure there's integrity in the networks, that they are maintained, um that uh if there are errors in them, that we are responsible for them along those lines. Yes.
▶ 4:29:22Thank you, Mr. Joiner.
▶ 4:29:24Yeah. Um, Congressman, I'm not familiar with the legislation, but certainly would support I think this is a big challenge for the industry and I would also make sure the providers are held accountable for updating their their information as well to have a broader national provider directory that's centralized and potentially run by CMS.
▶ 4:29:41Understood. Thank you, Miss Budro.
▶ 4:29:43Congressman, we work very hard to ensure that our networks are adequate. We support getting them getting uh working with care providers. to ask them every 90 days to update that and would support the opportunity to share data more regularly. So, we're both accountable to making sure not only that there's access, but it's correct. We recently added 50,000 behavioral health because we know that this is a real challenge with the amount of demand that there is.
▶ 4:30:11So, it's also about having access to those providers. So, we support um opportunities to work on that.
▶ 4:30:18Thank you, Mr. Cordani. Congressman, uh, we are not in the Medicare Advantage marketplace, but we support the tenants in our commercial marketplace for transparency and accuracy.
▶ 4:30:26Great. And Mr. Marovich,
▶ 4:30:27uh, yes, I support everything you described. Thank you.
▶ 4:30:29Great. Thank you, Miss Young. I'm not going to make you answer this unless you want to.
▶ 4:30:34Fair enough. Uh, with that, I yield back. Thanks again to all the witnesses and thank you, Chairman, for this for this hearing.
▶ 4:30:39Thank you, Mr. Finstra.
▶ 4:30:41Thank you, Chairman Smith, Ranking Member Neil. I want to thank our witnesses here today to address healthc care affordability. You are the top CEOs in the country when it comes to health care. The fact is this. Back home in Iowa, premiums are too high. Families and businesses are struggling to manage these rising costs.
▶ 4:31:04What families, seniors, and veterans want from this hearing is solutions on how we can cut how to cut premium costs and ensure that they still have quality affordable health care. That's it. That's what we want to do. And this is my top priority for Iowa to have quality affordable health care. It's our responsibility to get this done.
▶ 4:31:27The costs are so high that people are now choosing not to purchase insurance or they're lowering their amount of coverage they can receive, creating high deductibles. This causes people to choose not to go to the doctor for routine care or use the hospital as their primary provider when their health turns extremely bad. Since Obama care became law, small businesses and health insurance premiums have skyrocketed. Right? Affordable health care is not affordable.
▶ 4:31:57It's outpacing dramatically wage growth. So, I applaud President Trump for putting forward a plan to change the status quo. Congress needs to work alongside him and we need all of us to work together for affordable health care. So here's my question. When I'm back in Iowa, I hear from families and small businesses who tell me they feel trapped in a system that they believe is tilted against them.
▶ 4:32:21Rising premiums force them to take losses, pass their costs on to their employees, or they have to raise prices for their insurance for their customer for their employees. So, how do we make health care more affordable? Mr. Hemsley, can you explain under Obamacare, were there any ex incentives that existed to reduce costs or was it just more to manage costs?
▶ 4:32:51Um, I uh thank you for the question. Um and I think your um instincts around u managing cost and incentives to manage cost are completely right. The affordable care act was largely around um coverage and um coverage dynamics and addressed many of the coverage issues in the marketplace u but was not as focused on cost.
▶ 4:33:17And so that's why I applaud the leadership that's being bipartisan leadership that is uh off focused on the input costs of healthcare.
▶ 4:33:27Yeah. And and so you've talked about lowering costs. You've talked about different things here. But here's my question. In rural Iowa, right, rural Iowa, we have a captive audience. Now, I believe in capitalism. I I I absolutely believe in capitalism. I am worried that if we don't start, you guys each have a monopoly in essence in your territories.
▶ 4:33:49I mean, in Iowa, we have pretty much one carrier, United Healthier there a little But when I see that where we're going, where we're tracking down, if it wasn't for Trump and others, we'd probably have governmentr run healthcare. I mean, that's what the Democrats want. This is scary stuff. And I say that uh m Miss U uh Mr. Joiner, how can we change that dynamic and create more competition within the marketplace, especially in rural America?
▶ 4:34:20And Mr. Hensley, I'm going to ask you that same questions if you can think about it.
▶ 4:34:23Yeah. So, Congressman, this is I mean, it's a great question. It's consistent what we've talked about, you know, for the most part today, which is creating an environment in which you allow the plans to compete. And I think there are three things that we're trying to solve for which is the health status of the population continues to uh you know to to worsen.
▶ 4:34:43So we need to focus on the prevention focus on things that actually help people stay out of the hospital and so when they get to the hospital making sure that with the plans have the effective tools to negotiate effectively um with the uh with the providers. And then lastly is the drug manufacturers which you know today are still 25% of the the cost growing significantly making sure that we have the tools to actually allow for competition to lower the cost of brand pharmaceuticals in this uh in this country.
▶ 4:35:10Yep. Thank you. Mr. Mr. Henley, can you got 30 seconds
▶ 4:35:13again? Um the theme about pursuing valuebased care, which is in many respects why some of the uh businesses and areas that we're in is because you can coordinate it more effectively. You can bring all these other resources together and integrate and break the fragmentation that exists in the health care system and change the incentives to pay physicians to uh promote wellness and oversight uh in terms of keeping populations in good health in the right settings,
▶ 4:35:44not using the more expensive resources um and keeping you in that way you can contain this trend. Yep. and make healthcare more affordable and you will find you will see great
▶ 4:35:56Thank you so much. I look forward to working with you because we got a job to do and that is reduce the cost of premiums. Thank you so much. I yield
▶ 4:36:03Mr. Bean.
▶ 4:36:06Thank you very much, Mr. Chairman. A very good evening ways and means uh committee and to our panelist. Uh welcome. We're glad to have you here. America is grateful for you participating in this com conversation. I'm a man on a mission. I'm looking for a recipe, a recipe of affordable, accessible, quality health care, a system, uh what makes it up. And uh I'm not alone. As I listen to my colleagues ask the question, they're looking for that same recipe.
▶ 4:36:36History and economics tell us the ingredients needed for that recipe are choice and competition, which we're very short on. Uh an ingredient that we're that we're overloaded with is blame. We've heard a lot about it today. I know uh hospitals blame pharma, pharma blames insurance. Uh many of you blame uh others. Uh Congress, we're not immune. We blame each other.
▶ 4:37:02My colleagues on the left side of the aisle blame us for a system that they created without a single Republican vote. And we blame them right back. Uh, all this blame's going around while folks in Northeast Florida who I represent have sticker shock whether they're on Obamacare or the Affordable Care Act or not. Just just shock that I've got shock. I'm on the Affordable Care Act up in DC through the exchange.
▶ 4:37:31We've already heard one of my colleagues on the on the left side of the aisle say it's horrible. And uh I would uh agree whether it's intentional or not, those ingredients of choice and competition have disappeared. uh the consequence is that 26% increase in in premiums uh year-over-year because of those two ingredients missing. I want y'all to know uh I come from the free state of Florida where we harness the power of managed care.
▶ 4:38:00You guys are are key players in the recipe of making this this health system. Uh we use that in Florida to get our Medicaid program under control. And I think Florida is a much better state financially uh for the years I spent in the legislature making that uh that happen. But but here we are. Uh here we are going forward. Uh now we know it's just uh it's it's at a at a place that's just unaffordable and unsustainable right now.
▶ 4:38:29Uh looking back, is there anything y'all would do different knowing what you know now? Anybody want to say, you know what, we should have Mr. Mark, I'm getting you because you you've already given me the recipe. I've got your four things, but is there anybody else?
▶ 4:38:42I honestly would have come to you
▶ 4:38:44Uh I I just I feel like we have all the things I mentioned. Yeah.
▶ 4:38:48Getting Americans a digital health record, paying for outcomes instead of uh affordability, put the the system on a budget. I think those that's a good startup recipe. Let me tell you what we did in Florida, though. In in Florida, and you're going to say, "Well, we have this medical loss ratio." That's what we have with the Affordable Care Act.
▶ 4:39:06It says that you guys have to put uh with we give you a premium and then you have to put so much back into uh monies to patient care, but I've got this paper here that shows how you did it. Uh you've got uh subsidiaries and others and PBMs that you put that money towards your own subsidiaries and counted towards that medical loss ratio.
▶ 4:39:29I you also just raised rates where that medical loss ratio was never a problem uh because you just raised the rates and and made sure you had money. I don't want to blame you. You're in the job of making money. We just need a partner. We need a partner. A great reset going forward. And u I know we've already you've been asked this question. I this as I struggle to create a health system. We have to. It's unaffordable. We're going to solve our debt for your kids and grandkids and mine.
▶ 4:39:58We have to get health care under control and we just can't take all of the money for ourselves and go forward. We really have to put patients first. We're mediocre at best with the health care that we purchase right now. We're just so we need you. I just want to I know you're taking a a lashing. You've you've been here all day and I I don't want to pile on so to speak. I just want to remind you of what a key player you are and we have to if we're going to solve it, we have to come together.
▶ 4:40:25I'm grateful for for Marco, your your recipe. Maybe we can talk offline for creating a real robust health system where we compete. I know that's what you want. You guys are business related and you you're trained. You want to compete. It's in your blood and you've bought up and you've got one of you even owns a bank now that you put all the healthcare money. I want to take everybody back. I want to take everybody back when then Speaker Pelosi said we have to pass the bill in order to find out what's in it.
▶ 4:40:55She was talking about the Affordable Care Act and now we know 16 years later what's in the bill. It's unaffordable. It's unsustainable. It's one hot mess and we have to do better if this nation's going to come together. With that, Mr. Chairman, I yield back. Miss Plask.
▶ 4:41:15Thank you, Mr. Chairman. Um, thank you for the discussion that we've having today and thank you all for your patience in responding to each one of the members who have presented questions and issues and discussion with you today. Um, I hear the discussion and I hear two words care and cost right those are the things that you all are trying to balance.
▶ 4:41:39Um, I understand that one of the things that we as members seem to be focused more on is the cost and I I get that. Uh, Mr. Cordani, I know that you said that you have been with Sigma for over 30 years and you've seen some dramatic changes in the industry, in healthcare during that time. And one of those that you point to is cost and how much that has risen dramatically.
▶ 4:42:09Not just since Affordable Care Act was passed. You know, they love to use the word Obama care. I don't know why Obama has to be attached to it. That becomes like a dirty word in so many ways, but the Affordable Care Act and since 2000, the cost of hospital stay increased. You said, is that correct,
▶ 4:42:28Congresswoman? Yes. That's what I noted. Since 2000, the cost of a hospital stay is up over 200%.
▶ 4:42:34And what do you attribute that to?
▶ 4:42:37If you look at the uh cost structure in America, we essentially have inflation on the same goods year-over-year for health care costs that are greater than any other good in America. So there's wage inflation, which we know and we saw a pronounced effect of that during COVID. Necessary wage inflation that took place. We have sight of care
▶ 4:43:00that is in the design of the ecosystem. So we will pay more for an MRI in a
▶ 4:43:05It could be the same GE equipment in a freestanding facility at half the cost and it could be the same GE equipment in another facility yet half that cost. So we pay higher in sight of care.
▶ 4:43:16Thank you. Thank you. And I understand Mr. Hemsley, you discussed that in your testimony when you discuss hospital pricing. uh you actually have a graph that is very much uh situated as Mr. Cardani says where you do the overall inflation and then you compare it to other components as well. Is that and an area that you're looking at also? It is.
▶ 4:43:43And you know, the reason I'm bringing this up is um and I know that there's been some concern about the Affordable Care Act and what it means and um how this is a terrible thing and what costs are. Uh I always explain to my colleagues or try to use myself as an example that I'm here representing the Virgin Islands and in the Virgin Islands, we don't have all of the full use of the Affordable Care Act. We do not have an exchange.
▶ 4:44:12Miss Young, you talked about what has happened to you and the premiums that you have to um have to utilize. What would happen if you did not have an exchange to get your health insurance from?
▶ 4:44:24If I did not have an exchange with the rates that they are now, I would probably have to go without.
▶ 4:44:32You would have to go without healthare
▶ 4:44:33probably. So in the Virgin Islands, onethird of the people living in the Virgin Islands do not have healthcare because we don't have an exchange. People who live in Puerto Rico, 3 million Americans, many of them do not have an exchange. In the Virgin Islands, a quarter of the individuals rely on Medicaid.
▶ 4:44:52Another quarter depend on And with the HR1 and the nearly 1 trillion in cuts that will eliminate coverage for at least 15 million Americans, many of them will be affected by that, increasing the amount of individuals that do not have care at all.
▶ 4:45:12Now I'm going to disclose I previously worked for United Health uh worked in their merit choice division where I we they at the time we employed a philosophy that put value and care at the forefront. One of the things in the Virgin Islands we're concerned with is all of the uncompensated care and what's that going to do in rising our hospital costs there. Mr. Hemsley um you are at United Health Group now.
▶ 4:45:39Can you speak about the financial valuil viability of valuebased care models and what's that like in practice and are you utilizing that model still today?
▶ 4:45:50Yes, we are. uh Congresswoman and as I said uh previously uh when those have been in place for a few years you do see a change in the um health status of the people that you're serving and it it improves and you're able
▶ 4:46:08how do you practically utilize a valuebased care model
▶ 4:46:12you incent the physicians and the entire system to to care for individuals in the right place at the right time, more preventative care, um making sure that they use specialists when they need them, making sure that they get their drugs, that they're adherent to them. And so you actually are very engaged um as uh in terms of um making sure that they're cared for in all the right settings.
▶ 4:46:40And when you do that and do it on a consistent basis, you see that you're using the resources of the system more virtuously. uh you see that their cost trends uh tend to down but their health increases and that is um something that I think is when we talk just about cost the actual quality of their life improves because they are not in some um uh unfavorable cycle or as concerned they
▶ 4:47:10know that they have medical home and that there is someone caring for them. They have a resource. They can get information. They're the group is already informed about them. They're connected and um it is by far I think a more virtual virtuous model.
▶ 4:47:26Thank you.
▶ 4:47:27And if we could do that at scale, it would be impactful.
▶ 4:47:29Thank you, Mr. Chair. Thank you for your indulgence. I just propose that we as here I hear the discussion about cost. We need to talk about care and we as members of Congress need to begin that discussion. Not about government taking over health insurance, but how do we work with health care providers?
▶ 4:47:48How do we work with these companies to ensure that all Americans have the care they need so that we can be a healthy nation, which in effect is financially a more better a better place for us to be? I yield back. Mr. Kerry.
▶ 4:48:03Uh thank you, Mr. Chairman. I want to thank all the witnesses for being here. Miss Young, I definitely appreciate you being here because I think like most of my constituents, you probably went online trying to shop to find what was the cheapest airline ticket to come into town. So, I definitely appreciate you being here. You know, unlike buying groceries or shopping for Christmas gifts on sale, Americans simply do not have a reli reliable way to know how much equivalent services or costs are from different providers.
▶ 4:48:31Now, President Trump has emphasized the need to move away from government sponsored subsidies going straight to you, the insurance companies, but rather directly to in the hands of working Americans. Now, this common sense approach would allow Americans to take control of their health care in a free market way that our country is founded upon.
▶ 4:48:56However, now that requires clear transparency in different prices offered by doctors down the street versus the one across town. Now, this is something that I'd like to get into and uh Mr. Joiner, my team will be following up with you um in in some written comments on that, but given the um and just to uh put you on the docket, Mrs.
▶ 4:49:21Uh Ber uh Berro um we are going to have uh I'm going to my next question is be to you about how uh you support patients and their doctors making their own personal medical choices but I'll be coming back. First of all uh back in March of this year this is going to be a yes no answer. So you won't really have to think about it but just think about the body in which I'm going to be answering this. I introduced the Care Act with Mr. Dogget a Democrat uh also on this committee.
▶ 4:49:49This legislation would require the Center of Medicare and Medicaid Innovation to re-establish a pilot program to test an alternative payment model for health care services provided by our ground ambulance.
▶ 4:50:04While this bill would only apply to Medicare brandaries treatment in place models which provide payment to emergency medical technicians, paramedics for treating patients on the scene, avoiding that costly unnecessary emergency room visit um that are available nationwide.
▶ 4:50:24Now I'll go down the dis as I said before c but could each of the witnesses here answer with a simple not you miss young but I appreciate I mean if you want to say yes you can but um but if you wanted to go through just yes or no whether you believe that allowing people who call 911 to be treated where they are when medically appropriate instead of requiring ambulance to to transport them to an emergency room that would reduce health care cost and coverage cost. I'll start with you, Mr.
▶ 4:50:54Uh, when medically appropriate. Yes.
▶ 4:50:59Yes, we support it.
▶ 4:51:01Yes, we support it.
▶ 4:51:05You like data?
▶ 4:51:06Okay, that's good.
▶ 4:51:08Um, but any rate, uh, listen, I hear from constituents every day, as you've probably heard, and I know you were in the lesser committee before you came to this committee, but, uh, whether healthc care provider or patient, but the denials for care. So, uh, Mrs.
▶ 4:51:22B uh Ber um what practices related to the utilization of management but included but not limited to clinical guidelines prior to authorization and preferred form formularies has your company applied to improve the coordination of offering services and treatments with providers and patients to make sure that the patients you ensure receive the access to the services that they are
▶ 4:51:46Thank you for the question. And I think it's an important one and let me start with we support the clinical decisions made by uh the treating provider as it relates to prior authorization and other things. We are about less than 3% right now um go through prior authorization. Um and as we said the most of them are approved. I think it's still important though because as medical treatment continues to evolve we actually see this as a partnership with patients and providers.
▶ 4:52:16partnership that allows them to use medical evidence also look at the appropriate site of care drive affordability and we think it's a very important part of that and we've been making very significant investments I think one of the things that we can do in this process is share data directly uh in interoperable way with care providers so we can be real time and we've been doing that and what we found is that with that data we can make faster decisions and we can support patients better.
▶ 4:52:45Um, and that's an opportunity, as I shared in my opening testimony, about using AI, not for decisions, but for getting the data in the hands of both of ourselves and the care providers to make better decisions and we think that drives both affordability, but also drives easier access for patients and consumers.
▶ 4:53:04I am at my five minute mark. I want to thank all of you for being here. My team will be reaching out to all of you with additional questions. And with that, Mr. Chairman, I yield back.
▶ 4:53:13Mr. Yakam.
▶ 4:53:14Thank you, Chairman Smith. US healthc care spending exceeds $5 trillion with costs growing faster than wages and The average Hooser family faces healthcare premiums of almost $25,000 and deductibles of over $4,000. In Indiana, the median household income is below $70,000.
▶ 4:53:36These high costs put significant financial stress on families and it forces them to make difficult financial I regularly hear from constituents in rural communities that they constantly have fewer options to access care. Mr. Hemsley, United Health Group is the largest health insurer in the country. What concrete steps are you taking to ensure that patients in rural communities have strong access to care?
▶ 4:54:02Um we are trying to be supportive of uh both all of the uh care facilities and sources in rural communities as well as independent pharmacists 26,000 or so in our networks. Um and we are moving forward on efforts to see if we can facilitate faster payment to them and financial support um and just put as much business with them as we can because we need them and uh need them in our networks to really provide the care for those that we
▶ 4:54:33um cover for health.
▶ 4:54:34Thank you. And and Mr. Hemsley, I also hear from a lot of rural providers that they're they're constantly uh forced to accept smaller reimbursement rates from insurance companies that make it harder for them to survive. uh what are you doing to ensure that rule providers are being reimbursed at a fair rate?
▶ 4:54:50Uh well, it's actually in our best interest to make sure that they're uh reimbursed because we actually need them. As you point out, there's a scarcity of these resources. So, we tend to be very um forward thinking in terms of reimbursing um in rural communities because we need them uh and we need their services.
▶ 4:55:10Thank you. And all of our witnesses uh today in their testimony mentioned the need for affordable health care and and frankly I couldn't agree more. The healthcare industry at large is very quick to fingerpoint as to why costs are too high while also taking zero accountability. What role have private insurers played in the cost of healthcare uh high healthcare premiums? Uh Mr. Joiner.
▶ 4:55:34Um so Congressman, it's a good good question. I would say that the insurers today play an very important role in terms of reducing cost. So the role
▶ 4:55:43what what role have you played in the cost of high premiums
▶ 4:55:46of cost of high premiums? Um I would uh I would suggest that our role is is to basically combat the rising costs that actually lead to premiums. So our focus has been reducing the cost of hospitalizations or keeping people healthy to prevent hospitalizations and actually focusing on the cost of branded medications in this country. So if you look those are the big cost drivers that lead to the premiums and as an insurance company that's the focus that we have is to make sure that we're continuing to focus on engagement
▶ 4:56:15and Mr. Mr. Marovich same question to you what what role have private insurers played in the high cost of premiums.
▶ 4:56:21We haven't done enough to improve the system. We're still using faxes and CDROMs and clipboards and photocopers and some of these technologies are what we're using for processes like prior authorization, provider directories, credentiing and so um we we should have done more like the financial services industry to to allow for financial transactions in the background. We need we should have been doing more up until this point. I'm proud to say that we are now in prior authorization.
▶ 4:56:50So, I'm hopeful that will change.
▶ 4:56:52Thank you. and and what concrete steps are are your companies taking to reduce premiums? I will start with Mr. Cordani.
▶ 4:57:00Um Congressman, thank you for the opportunity. I'd highlight three. Um I referenced earlier today with the employers we work with in America, we spend time first trying to ensure that the benefit design has zero costs for preventative care and low or zero cost for generic drugs for chronic care. So ensuring there's ease of access and support of either staying healthy or optimizing your health outcomes.
▶ 4:57:24Second, um extending access to services that are cost-effective like inhome infusions, virtual care, and integrating behavioral health with physical health. And then as you heard earlier today, expanding valuebased care, rewarding the doctors and the care teams that are providing the highest quality and supporting them with technology and services and expanding services for them.
▶ 4:57:45Thank you. And very briefly, uh, Miss Bordeaux, uh, same question. What concrete steps are you taking to reduce
▶ 4:57:50I I would point to three very practical things. Uh, one is paying for value, um, to try to incent, um, positive outcomes. We're investing heavily in fraud, waste, and abuse to try to take that out of the system. Also streamlining, as I said, the administrative issues on prior authorization, uh, working to deliver fair value across the entire health care system and trying to simplify it. and we're offering trying to offer a range of options and products so that consumers have choice in what they need
▶ 4:58:21Thank you. You know, all stakeholders play a role in skyrocketing healthcare cost and the Hoosiers that I serve literally pay the price. Uh my constituents cannot continue facing higher health care costs year after year, especially while not seeing better health outcomes. Thank you, Mr. Chairman. I yield back.
▶ 4:58:38Mr. Horford.
▶ 4:58:40Thank you, Mr. Chairman. Uh, I know it's been a long day uh for all of you. Uh, but it's been a longer day for a lot of constituents that I serve back in Nevada who are, you know, staying up late at night, can't sleep because of the cost of their health care and whether or not they can even access it. Uh, this has been a choice to cut a trillion dollars out of the health care system. It's been a choice to not renew the enhanced premium tax credits.
▶ 4:59:08It's been a choice um to not make some of the reforms that you're talking about here today. And I hope that since uh the majority has decided that this is an opportunity for us, I'm focused on what you said, Miss Young, which is what can be done in a bipartisan way to address the needs of the American people around their need for accessible, affordable healthcare.
▶ 4:59:36So, I want to give you a moment to speak directly to the people in this room and who are watching this hearing. You opened up in your remarks talking about what it means as a small business owner who has the responsibility to provide health care as a breast cancer survivor, as a widow, what this issue of health care access and affordability means.
▶ 5:00:05So, I just want to give you a chance to talk about that and especially in this moment when we have the president focusing on directing billions abroad to Venezuela and to Argentina to talking about Greenland while you and your family and your business struggle to have access to
▶ 5:00:24Right. Thank you. So, the first thing I'll say is I believe you always take care of home first. So if I haven't mowed my own grass, why am I going to go and mow my neighbors? And so you always take care of home first.
▶ 5:00:40So when I think about the whole issue of healthc care and us all being here, I really want people just to see the humanness behind all of this and to see that there's so many people like me who work really hard and we contribute so much to our communities. We provide jobs for other people. We really enhance the economy of the places that we live.
▶ 5:01:09And when we don't have the things that we need, it really threatens us being able to provide all of the benefits that we are. So for myself being a breast cancer if the if that outcome were different, how many people would not have a job because I can no longer employ them because I'm no longer here?
▶ 5:01:33There's such a ripple effect for not having the care that we need h not having a healthy society. So when I think about our president who is, you know, looking outside of the United States before taking care of home, that's not acceptable. You always take care of home first.
▶ 5:01:54And when I think about just the back and forth of health insurance companies and pharmaceuticals and all of the people who are looking more at profits than people, it's really disheartening and hurtful. Thank you. Well, centering your voice in this debate and I'm so thankful that you're on this witness stand today.
▶ 5:02:16Uh we have a lot of prestigious executives who are here but the most important person that we heard here he heard from today is you
▶ 5:02:26because you represent millions of people who are just trying to get by and who are trying to survive who are trying to create opportunity for themselves whether as a business owner or for their family. And I think when we center the voices of the people, when we listen to you, when we lift up your lived experiences, and when we learn from you, we can make healthc care better for everybody.
▶ 5:02:53Thank you.
▶ 5:02:54Now, unlike some of my colleagues um on both sides of the aisle, I have long supported Medicare Advantage. uh I have been a champion for its integrated approach into our [snorts] health care system and I believe in giving choice to my constituents. So nearly 60% who have decided uh to enroll in Medicare advantage as their healthc care option.
▶ 5:03:22But across policy areas I I got to say I have consistently heard from people that we need to make improvements. So Mr. Himsley and Mr. Joiner, I I want to thank you for the conversations that we've had. They've been productive. But the concerns that I hear from from seniors and providers suggest that Medicare Advantage too often works better for insurers than for the people it was designed to to actually support.
▶ 5:03:53So, I want to just give you an opportunity to talk about ways that we can work around transparency, around prior authorization, and around supplemental benefits like dental, vision, transportation, and meals to improve that quality of care under Medicare Advantage and what we collectively can do in a bipartisan way to um provide those benefits to Medicare recipients.
▶ 5:04:22Um well, Congressman, I completely agree that uh Medicare Advantage is a modern form of care and um using valuebased care principles within it really allows that population who are engaged to really be under the direct care of the clinicians and the clinicians make the decisions with respect to uh their care plans, how they're overseen, how they use resources.
▶ 5:04:50there's not the um in those situations the the clinicians are uh responsible for those individuals. They're paid a uh uh a rate for each one and they make the decisions. And we think when they're incented that way that they make good decisions, they're good practitioners and they get good outcomes.
▶ 5:05:16So we think valuebased care and a Medicare advantage is a perfect platform for that is a really good example of what the future of health care could be here and where uh resources are used in a more virtuous way under the oversight of practitioners who are incented to maintain health and get outcomes as opposed to drive volume. I know my time is up, but I want to follow up with you, Mr.
▶ 5:05:45Joiner, and with all of our witnesses. I hope that if nothing else, we can agree that healthc care should be improved, it should be more affordable, and it can be more accessible and all of us have an obligation to the people that we represent to make that a reality. So, thank you, Mr. Chairman. I yield back.
▶ 5:06:06Mr. Miller.
▶ 5:06:09Thank you, Mr. chairman and the witnesses for testifying here today. Ohio families, individuals, and small business continue to struggle with the high cost of healthcare. As climbing premiums, significant deductibles, and denial of necessary treatments are taking a serious toll, the United States, including the worldclass medical facilities in my home state of Ohio, is leading the way in the state-of-the-art medical advancements, many made possible through federal funding.
▶ 5:06:36However, for many people suffering from life-threatening diseases, these breakthroughs remain out of reach. According to the Health Policy Institute of Ohio, more than one in five Ohioans have trouble paying medical bills as health care costs are rising and out-of-pocket costs are significant, even for Ohioans who are insured. It has also been reported that nearly one in three people living in my state have avoided a doctor recommended procedure, lab test, or evaluation in the past year because they simply couldn't afford it.
▶ 5:07:06As this committee has highlighted, the costs to our nation's health care system are exacerbated when chronic illness disease develops, compounding expenses for providers, insurance carriers, and the federal government. But beyond these financial burdens, the cost to human life is immeasurable. And we're seeing that here today. In my district, a young girl with autism was told she could not access treatment for over a year for a serious dental issue impacting her overall health.
▶ 5:07:38For far too many people, affordability is a key factor in whether they can survive cancer, heart disease, and other chronic illnesses. As echoed by my health advisory council, Ohioans battling cancer facing cost barriers are more likely to have their cancer diagnosed and treated at an advanced stage when survival is less likely and the cost of care is more expensive.
▶ 5:08:01Also concerning are insurance practices that outright deny coverage or charge exorbitant rates to the elderly just because they have a serious medical diseases when trying to re-enter through the metagap policies that we've seen. The lack of affordable care for consumers also echoes through the entire health care system with Metro Health in my congressional district losing 1 million a day. And the Cleveland Clinic providing aid to patients unable to afford care.
▶ 5:08:26In an effort to lower cost, University Hospitals is taking strides through Medicare shared savings while improving quality. Rising costs hit hospitals, physicians, and emergency rooms. Then ultimately the federal government picks up the tab through state directed payments and other means of addressing uncompensated care. This is simply unsustainable as pretty much every member has said this today.
▶ 5:08:49Finally, coverage denials and prior authorization requirements as echoed by everyone from small independent practices to large hospitals in my district place significant burdens on the entire health care system. A local OBGYn was forced to close her doors despite patient need. In addition, more efficient prior authorization practices must be aligned to lower overall patient costs without compromising reimbursements for critical treatments. In the end, such delays jeopardize patient care.
▶ 5:09:20As such, I seek to witnesses commitment to work with me to resolve these issues impacting my congressional district. We can and we must do more to address these rising healthc care barriers within our nation. I appreciate everyone being here and I know it's been a long day and it's been told you probably a dozen times and it has for everybody. Uh, but I'll try to keep things short. A few weeks ago in Congress, we had a pretty tough vote. I took that vote.
▶ 5:09:49I took that vote to keep my constituents covered. And the way I look at it now is that it's time for all of you to start making some tough choices. I want to know yes or no. Do any of you believe that inefficient prior authorizations improve affordability for the American people? Mr. Hemsley, yes or no?
▶ 5:10:10Uh, inefficient ones. No,
▶ 5:10:12Mr. Joiner.
▶ 5:10:13No. We have a lot of work to do between us and the providers.
▶ 5:10:18We can do better by connecting directly with data.
▶ 5:10:21Thank you, Mr. Jo.
▶ 5:10:22No. And we've made public commitments to drive improvements and we're ahead of schedule on those uh commitments today. No, and we're working on it as well.
▶ 5:10:31Thank you. Now that we've established that inefficient prior authorizations make healthcare unaffordable, I'd like to get your commitments that what you'll do to address this problem will not get passed on to patients because I believe that continues to happen.
▶ 5:10:44Can everyone commit to not passing those costs on to Um we as as indicated we we are really driving a real time um straight through prior authorization um agenda and have that in market. So we don't expect these costs to to um sustain. We expect to be on a vastly more efficient system.
▶ 5:11:13Those uh are in the marketplace right now and they're being experienced by care providers. Well, Mr. Ambles, I can just say very quick, I know I'm out of time, but what I'm hearing from my own constituents and what I'm hearing from three major hospital systems and what I believe is the largest not only within the country, but the entire world is that prior authorizations are making it almost impossible to do their job and to take care. Why? It's because they have to rule everything out. Even myself when I had to go in for a simple procedure, had to go through six months.
▶ 5:11:42Then I had to get a laminctomy for my back and I had a severed nerve and I could no longer feel the feeling in my leg. I mean it is out of control. I think that this is absolutely insane and we'll be following up and more so I I really at this point I will yield back but I want to know how much money uh you know everyone is making off of this in prior authorization. I know you say you're saving money.
▶ 5:12:04I would actually like to see that data and how much because the reimbursement I believe and what we have seen is staying in your bank accounts collecting interest that stays longer than it usually should. But with that, I yield back.
▶ 5:12:17Mr. Marine.
▶ 5:12:18Thank you, Mr. Chairman. Uh folks, it's no secret that Americans across the country are frustrated with the growing cost of health care and health insurance. And I think we all recognize that these cost increases are not confined to any one group. They're felt by employers, families, and communities everywhere. The truth is that every insured American is paying more, no matter if they are on the ACA program or not.
▶ 5:12:43In my opinion, the skyrocketing costs of our health care system stems from too many subsidies, regulations, and mandates, and too little transparency, competition, and influence from the free market. Rather than subsidizing the healthcare industry, we should return to market-based solutions that enable the free market to increase competition, thereby lowering health care costs. Uh, I want to address the five corporate folks here today. Miss Young, you get a pass from me. Okay? So, just take a deep breath.
▶ 5:13:13Thank you for being here. By the way, a few weeks ago, folks, uh, on the House floor during a debate on a healthc care bill, um, my minority leader Hakee Jeff went right before me in the debate. And here's what he said with clarity. He said, quote, "We have a broken health care system." Those were his words. By show of hands, how many of you would agree with Leader Jeff that we have a broken health care That's four of the five of you. And I got a little bit of a hand from Miss Budro.
▶ 5:13:44Was that a yes or a no? Do you agree it's a broken health care system?
▶ 5:13:47I think we have an incredible opportunity to fix our system. And I think we have to work together to do it. By your admission that we need to fix the system, I would take that you agree that it's a broken system. And I agree with you. It is a broken system. And by the way, I want to remind everybody that system was built by the Democrats on the ACA years ago. And your companies, by the way, heavily influenced how that ACA plan was put together. How many of your companies publicly supported or lobbyed for the passage of the ACA? Of the five here, any of you?
▶ 5:14:16Raise your hand. We've got one. Did the other four of you guys either publicly or privately lobby for the passage of the ACA years ago or your predecessors in interest?
▶ 5:14:30Okay, we've got one over here as well. So, you guys were involved in that process. You agree it's a broken system. Let's let's look at the rise in the premiums versus the uh increase of the profits that your folks are making from your stock prices. Democrats blame rising premiums on temporary COVID era Obamacare subsidies expiring, but premiums for all Americans have been rising long before those subsidies. ACA premiums are up over 100% since Democrats law took effect.
▶ 5:15:00And your company's stock prices are also up during that time period. From 2014 to 2024, health insurer stock prices are up over a,000%. I'm sure each of you know that. Did you know that? a,000% in that 10 years. During that time frame though, 100% increase in the ACA premiums. Let me ask you, did does anybody here think that that was the goal of the ACA? Raise your hand if it's a yes.
▶ 5:15:27Do you think that's the goal to increase shareholder profitability on one side, but still on the backs of the the American people that were paying 100% more for those premiums while the government is subsidizing those premiums? Anybody think that's the goal?
▶ 5:15:43If not, if premium increases is really about expiring temporary COVID era subsidies like the Democrats would claim, why are your show shareholders doing so well in the midst of this time while working families and taxpayers are bearing the brunt of these increases? Can anybody explain that to me?
▶ 5:16:02Congressman, we don't have shareholders. We're a nonprofit and we've capped our
▶ 5:16:06So, you're you're off the you're off the hook on these. We're talking about these four on these issues. Anybody want to explain to me thousand% increase for the for your stock prices over 10 years period of time when the people that are actually having to bear the brunt of the premiums saw 100% increase in their Do you think that's the kind of system that we need to continue to subsidize any of you? That's no. I I see no hands go up and I'm glad to hear you.
▶ 5:16:36I'm glad that I'm getting that response. Speak now or forever hold your peace. Because that's what the Democrats are asking us to do is to continue COVID era temporary subsidies that have done nothing but drive up the cost of the premiums that people are paying and frankly subsidize the profitability of your companies to the benefit of your shareholders. I love profits. I think profits ought to be there.
▶ 5:17:00I certainly do not think the government needs to subsidize those profits when you can make it on your own and the free market should drive that determination. Does anybody disagree with me? All right, Mr. Chairman, with that, I yield back.
▶ 5:17:16Thank you. Um, I know it's been a long day for each and every one of you. Um, thank you for appearing before us today. I believe that we've had some constructive dialogue that will be very helpful in drafting some legislation that hopefully will lower the cost of health care for all Americans, lower the premiums for all American. Um, please be advised that members have two weeks to submit written questions to be answered later in writing.
▶ 5:17:43Those questions and your answers will be made part of the formal hearing record. And with that, the committee stands adjourned.