▶ 0:16:48Take a moment to address the guests in our audience. First of all, thank you for coming. We thank engaged citizens are a welcome and valuable part of this political process. I do 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.
▶ 0:17:08I know that we all have deep feelings on these issues, and that we may not agree on everything, but I ask that we all abide by these rules and be respectful of our audience members, our viewers, our witnesses, and of course, members of the committee. The chair appreciates the audience's cooperation in maintaining order. As we have a full discussion on these important issues, the chair recognizes himself now for three minutes for an opening statement.
▶ 0:17:34Today we will discuss health care costs, patient access, challenges by examining affordability across the entire health insurance marketplace. This hearing builds on work republicans have done in this congress to address healthcare affordability. We plan to have future hearings with other leaders and experts across the health care continuum to understand the root causes of rising health care costs. Specifically, this hearing will focus on the role insurers play in the delivery of care.
▶ 0:18:04The insurance market is dominated by a handful of fortune 50 companies that control the majority of the national market. In some states, a single insurer may even control 80 or 90% of a particular market.
▶ 0:18:18The biggest health insurers today often manage several facets of the health care supply chain, such as owning the pharmacy benefit managers, the group purchasing organizations, multiple provider groups, and specialty or mail order pharmacies. Even with owning those complicated benefit designs, narrow networks, prior authorization requirements, and opaque coverage decisions often leave patients feeling like they are paying more for less.
▶ 0:18:49The market also lacks transparency and is not easily navigable. One can one contributor to health insurance unaffordability for millions of americans is the so-called affordable care. The affordable care act, also known as obamacare, that was signed into law in 2010 when democrats passed obamacare without republican support. They sold the bill on the promises that premiums would fall, competition would rise. And if you like your insurance plan, you can keep it.
▶ 0:19:15Instead, obamacare has increased health care costs, warped incentives, federalized benefit, restricted plan design, and limited access to care. Many patients have fewer plan choices than they did before obamacare was enacted. In fact, a constituent of mine told me recently that his family only had one provider option in the obamacare exchanges. Therefore, obamacare coverage is not translating to patient or taxpayer affordability.
▶ 0:19:39Unfortunately, employer sponsored insurance is also becoming unaffordable, and each year, more american small businesses choose not to offer health insurance because it is too costly. These impacts are. This impacts the ability for a small business to be competitive and to attract talent. We know two things are true competition and we know two things are true.
▶ 0:20:01Competition is essential for patient access, lack of competition and consolidation within the insurance marketplace has led us to higher health care costs as a whole. The health care system needs to work for patients. That means empowering individuals with real choices, transparent prices, and coverage that fits their needs. We must strive to have more competitive plan options that reward quality and focus on affordability, access, and outcomes.
▶ 0:20:26Our discussion today is meant to move beyond politics and spur debate about how we can work toward delivering meaningful, innovative solutions for the americans that we all serve. We owe it to patients to get the root to the root cause of the challenges we see across the health sector, and I look forward to hearing from our witnesses. I now recognize the subcommittee ranking member, representative degette, for her three minute opening statement. >> thank you, Mr. chairman.
▶ 0:20:56Americans know that health care is far too expensive as it takes up a greater percentage of our economy than any other developed country. Americans health outcomes lag far behind others, with our life expectancy now falling behind spain, panama and oman, and millions of americans who get insurance on the individual marketplace saw their premiums shoot up, doubling on an average at the beginning of the year because of the aca.
▶ 0:21:21Now, the lowest number of americans ever are uninsured. Only seven are. Right now. There's 21 million people enrolled in the marketplaces under the aca. But because congress failed to extend the enhanced premium tax credits, health care coverage is shooting up now.
▶ 0:21:43Two weeks ago today, the house did the right thing by passing a three year extension of these critical tax credits, even as the republican leadership worked against it. Just 17 house republicans joined democrats to do the right thing and help millions of americans like our witness, ellen allen, who's sitting right here today, can continue to afford health coverage.
▶ 0:22:05And just one republican on this subcommittee voted for affordability, the enhanced premium tax credits we enacted into law five years ago were predicated on a simple premise no american should have to pay more than 8.5% of their income for health insurance.
▶ 0:22:24But even when people do have coverage, good care can still be a fight to get through denials, prior authorization requirements, and sky high co-pays and deductibles that create additional barriers between america's patients and the care that they need. Just last year, this majority is top. Top priority was to enact massive tax cuts for the wealthy, for people just like the insurance ceos who are sitting in front of us today.
▶ 0:22:53These handouts to the rich were funded by cutting health care for hardworking americans, and the same bill in the same bill with the tax cuts. This majority chose not to extend premium assistance for middle class americans, causing health care costs to skyrocket. And that's what has led now to this current crisis. In the big picture, the chairman and I can agree what we need is access to quality, affordable health care for every american.
▶ 0:23:19That's why, frankly, I've long supported a solution like medicare for all. But americans need relief now, and we need immediate action to bring down health care costs in this country. Open enrollment for 2026 ended a week ago, as the republicans in congress failed to pass any legislation to make health care coverage more affordable. We are simply out of time.
▶ 0:23:43The senate must act immediately to join house democrats and the 17 courageous house republicans to send this critical help for middle class americans to donald trump's desk, and he must sign it. To do anything else is to accept a poorer and sicker america. On a positive note, Mr. chairman, I have 15 seconds left and I want to thank the majority for finally including the health extenders package that we were supposed to pass over a year ago and which dodge cut.
▶ 0:24:15Finally, it's going to be included and it's going to help get research and health care to millions of americans. Thank you. And I yield back. >> does that mean we can count on your vote this afternoon? I rhetorical question. >> good. >> I now recognize the chairman of the full committee, the gentleman from kentucky, chairman guthrie. >> thank you. Thank you, chairman griffin. I want to thank our panel of witnesses for being here today. Today's hearing is the first in a series of hearings focused on health care affordability.
▶ 0:24:43And we begin by hearing testimony from our nation's top health insurance ceos. According to cms, america spent $5.3 trillion on healthcare in 2024. That represents a staggering 18% of our country's gross domestic product. Over 200 million people in the us get their health insurance through the private marketplace.
▶ 0:25:05Of that total, around 178 million people receive their coverage through their employer, and 24 million get their coverage through obamacare. Across these markets, health care costs have been increasing at an unprecedented rate in the obamacare markets. Healthcare premiums increases for 2026 were as high as 40 and 50% in the employer marketplace. Year over year. Cost increases for 2026 are at a 15 year high.
▶ 0:25:36Despite what my democrat friends would have. The american people believe health care affordability is far from a one market issue. It also isn't a new issue. This committee has previously worked in a bipartisan way to pass major reforms across the health care sector to make health care more affordable for all americans. I hope we can rise above the politics and have a real discussion about the root causes of affordability, and how we can help all americans have access to more affordable care.
▶ 0:26:04And that is why we have convened this panel of ceos today who can speak authoritatively on the market forces affecting affordability. The goal of this hearing is to have a conversation about these rising health care costs. And your companies sit at the center of our health care financing system. Nearly every dollar spent on health care in america runs through your companies or one of your competitors.
▶ 0:26:26And as we as a country are spending a lot on health care, a core component of your industry's value proposition is working on behalf of americans to lower the cost of health care, along with improving access and quality. Yet health care costs are increasing every year, and more and more americans have become frustrated by the feeling that their insurance isn't working for them and working against their health. I want to be clear in what we expect to hear answers on today.
▶ 0:26:54As some of the largest companies in our economy and amongst the companies that benefit the most from government subsidies, how do you justify the continuing skyrocketing cost of for your beneficiaries? What are you doing that is working to lower health care costs and what isn't working, and what are the barriers we need to address? What should insurance companies be doing better to live up to the promise to the american people? I thank you all for being here.
▶ 0:27:19I look forward to a spirited discussion and great information and I will yield back. >> gentleman yields back. I now recognize the ranking member of the full committee, representative pallone, for his three minute opening statement. >> thank you. Chairman.
▶ 0:27:32Today, republicans are looking for a scapegoat to blame for the fact that 24 million americans saw their health care premiums skyrocket at the beginning of this year by calling health insurance executives before us today, republicans are attempting to divert attention from their failure to extend the affordable care act's enhanced premium tax credits. Make no mistake, congressional republicans and president trump are to blame for the health care affordability crisis americans are experiencing today, and it's only going to get worse.
▶ 0:28:01That's because republicans are sabotaging our nation's health care system, driving up costs, taking away coverage, and undermining access to care at every turn. As a result of republicans actions, including passage of their big, cruel, ugly bill, 15 million people will be left uninsured, driving up health care costs for everyone with private health insurance. Now, republicans are proposing further dismantling the aca in favor of junk insurance and health savings accounts. That won't help when you or your family get sick.
▶ 0:28:31Chairman talked about competition, but it's not competition. If your alternative doesn't provide coverage, for example, a policy without hospitalization, which a few years ago republicans were advocating you could buy a policy without hospitalization. That's not health care coverage. If I get a policy with that has a deductible of 7 or $8000, and then you give me $2,000 in a health savings account, that doesn't help me either, unless I'm rich. Their policy is for the rich guy, not for the average guy.
▶ 0:29:01We set up the aca because people couldn't buy health insurance that covered that, had good coverage and was affordable, and nothing republicans have discussed so far changes that if costs go up, which is what they've done, because, you know, the health crisis and the cost of health care, then the only way to help people is to provide more subsidies or tax credits so they can afford the insurance, giving them junk insurance or giving them high deductibles and some kind of $2,000, uh,
▶ 0:29:32Amount of money for a health savings account isn't going to help them. It's not going to provide any real competition or alternative. And it's not the way to make health care more affordable. So I appreciate the opportunity to hear from the executives of our nation's largest health insurance companies today. This is not your fault. This is the republicans fault. It's not your fault. Don't let them drag you in here and blame you for what's going on. It's not your fault. Democrats stand ready to continue to fight to lower health care costs for the american people. We have a witness today.
▶ 0:30:01Ellen allen, who joins us here from west virginia. We'll hear her story about how health care premiums have skyrocketed this year as a result of republicans inaction. Just as she's preparing for retirement, americans like ellen deserve to have peace of mind. They can afford the health care they need, and their life savings won't be drained if they get a life threatening disease or have a health emergency. Unfortunately, the republicans assault against quality and affordable health insurance puts that at risk. It's not going to help ellen allen. Thank you, Mr.
▶ 0:30:31Chairman, I yield back. >> gentleman yields back. We now conclude with member opening statements. The chair would like to remind members that pursuant to committee rules, all members opening statements will be made a part of the record. We want to thank our witnesses for taking their time to testify before the subcommittee today. Although it is not the practice of this subcommittee to swear in witnesses, I would remind our witnesses that knowingly and willfully making materially false statements to the legislative branch is against the law.
▶ 0:30:58Under title 18, section 1001 of the united states code, you will each have an opportunity to give an opening statement followed by questions from members. Our witnesses today are stephen hemsley, ceo, unitedhealth group. David joyner, chairman and ceo, cvs health. Gayle bordeaux boudreaux. Sorry, I get it right. President and ceo of health.
▶ 0:31:22David cordani, president, ceo, chairman of the board, the cigna group paul markovich, president and ceo of and patient advocate ellen allen. The per committee custom, each witness will have the opportunity for a five minute opening statement, followed by a round of questions from members. The light on the timer in front of you will turn from green to yellow. When you have one minute left, and then to red when your time is up. I now recognize Mr.
▶ 0:31:49Stephen hemsley for five minutes to give his opening statement. >> thank you, chairman. Guthrie, ranking member, pallone, chairman griffith and ranking member degette. Members of the committee, thank you for inviting me to testify today. Every day, people count on our company not just to help them when they're sick, but to help keep them healthy and well at every stage of their lives. And we take that responsibility seriously.
▶ 0:32:16>> sir, could you move the mic a little closer to your mouth so everybody can hear you? >> thank you. Like all of you, we are dissatisfied with the status quo in health care and know we must all do better. And so we are committed to doing exactly that. And that's in part why I returned to unitedhealth group as chief executive. Our mission as a company is to help people live healthier lives and to help the health system work better for everyone. Better outcomes, better experiences, lower costs.
▶ 0:32:47Achieving these goals means being candid about why health care costs continue to rise. The cost of health care insurance fundamentally reflects the cost of health care itself. It is more in 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 rising volumes of care activity. And it is a fact.
▶ 0:33:13Hospital and drug spending has soared at three times the rate of inflation since before 2000. We limit these pressures as much as possible. We continue. We use negotiations, data, insight, better care, coordination to moderate the cost growth, improve outcomes and protect access. And we focus on preventative care so people get care before a condition worsens or before becoming sick at all.
▶ 0:33:44Insurance is the only sector in health care incentivized to help the help keep the cost of care as low as possible, while still seeking high quality 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. We are innovating to make high quality health care easier to find, simpler to navigate, and most importantly, more accessible and affordable.
▶ 0:34:13Last year alone, we negotiated nearly $300 billion in savings for our customers. Without those efforts, recent premium increases would easily have been twice as high. Nearly 90% of our premiums go direct to direct medical care, including in affordable care act plans. Our enterprise margins are around 5%, with medicare, medicaid and aca margins being far less than that.
▶ 0:34:45Additionally, we've made notable progress in areas such as value based care, which incentivizes better care and health outcomes and simplifies the experience. And in medicare advantage, which provides lower total costs than traditional medicare, with more benefits and lower overall costs to seniors, a majority of whom choose it each year. We've introduced innovative health plans that offer people the information they need up front, enabling them to comparison shop for care.
▶ 0:35:13These plans often have no deductibles and no co-insurance, and members pay, on average, more than 50% less in out-of-pocket costs compared to traditional plans. And employers offering these transparent plans are also seeing lower total costs.
▶ 0:35:30We're committed to extending these consumer centric features wherever we can to consumers, have them, give them more choice, more control, more transparency and certainty, and more value.
▶ 0:35:44We're mindful of the current moment and the debates about affordability in congress and throughout the country, and we appreciate the current bipartisan talks focused on ideas around affordability, transparency and possible short term tax credit extensions because we want to continue to be part of the solution with respect to aca individual plans, we will voluntarily eliminate and rebate our profits this year for these coverages.
▶ 0:36:13I know there are aspects of our products and services that are still 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 making healthcare more affordable.
▶ 0:36:32In addition, we have 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. I look forward to our discussions today about what more can be done to improve affordability and expand the availability of quality care. Thank you. >> gentleman yields back now. Recognize Mr. joyner for his five minute opening.
▶ 0:36:59>> thank you, chairman griffith, ranking member degette 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 solutions needed to address them. Cvs health engages with millions of americans every day in their communities, helping families struggling with an often confusing, disconnected system. And the rising cost of health care.
▶ 0:37:22What's driving these costs is understood greater demand for care, growing medical provider costs, and persistently, 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.
▶ 0:37:51Cvs health supports the committee's goal of addressing rising medical costs, and we want to be a partner in addressing these challenges. Together, we are working to ensure our members have access to the right care at the right cost, and we're expanding low cost primary care, covering preventive care at no cost to patients and offering free virtual care to eliminate barriers to access.
▶ 0:38:13We are leading the industry in developing new solutions to lower costs, investing in technology to identify health problems before they become serious and tailoring treatment to individual patient needs. Today, I will 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. So filling out forms.
▶ 0:38:39So instead of filling out forms doctors can spend that time caring for patients all while driving lower administrative costs of care. We know denial of 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 is growing.
▶ 0:39:07The medications, nearly half are approved immediately. And for others, the average approval times have decreased from three hours and 2024 to just 34 minutes. Today, cvs health's bundled approach now gives providers one approval, covering medical procedures like repeat imaging and medications for specific conditions for patients undergoing breast cancer treatment. That means a single authorization for the entire series of procedures. Third, we're using competition to address rising drug costs.
▶ 0:39:38We're aggressively promoting the use of biosimilars. We now have the vast majority of members paying $0 out of pocket for the once pricey drugs that have generated more than 1.5 billion in savings for our customers. Fourth, we're building a modern consumer healthcare platform that we will open to all plans and providers for patients. It's simple open one app that allows them to own and manage their own health care.
▶ 0:40:03For 17 million monthly active app users, we will schedule appointments, refill prescriptions, access preventative care all in one place with the goal of helping them stay healthier at lower cost. And for the healthcare system. It's a shared foundation we believe will make health care more coordinated and affordable. I took this role 15 months ago because I wanted to help shape the future of health care in this country.
▶ 0:40:29I'm proud of the work we have done so far to simplify the health care experience and make healthcare more affordable and accessible for american families, I know there is much to do. It requires health plans, providers and employers working together. That's why we support reforms that increase transparency, competition and innovation, particularly among hospitals and in the pharmaceutical supply chain.
▶ 0:40:50We encourage policy makers 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, and allow people and high deductible plans to access these services in their deductible phase.
▶ 0:41:20Third, address the bad actors who are gaming the no surprises act, centralizing eligibility, automating processes, and increasing oversight can help address this abuse. Fourth, accelerate the interoperability of health records to reduce friction and help patients manage their health, and finally pass the icaps legislation allowing pharmacists to practice at the top of their license and receive medicare reimbursement.
▶ 0:41:48This will benefit every pharmacy in this country, while improving access for patients and reducing costs. We welcome the committee's partnership in these efforts as we continue to work to make health care more affordable for all americans. Thank you, and I look forward to your questions and to the additional hearings in this series. >> thank you very much. And now recognize Mrs. boudreau. >> thank you. Chairman griffith and guthrie, ranking members degette and pallone and members of the committee.
▶ 0:42:17I'm gail boudreaux, president and ceo of elegance 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, health care, affordability. Families are frustrated by the rising cost of health care, and they're right to be rising.
▶ 0:42:44Premiums and out-of-pocket 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.
▶ 0:43:07Our responsibility is to provide coverage people can afford, provide clear information in plain language about coverage and costs, and make timely decision. That includes negotiating for fair prices that affect premiums and out-of-pocket costs.
▶ 0:43:26Our role isn't just to explain costs, it's to act and make health care easier to navigate for patients and doctors, every redundant step and paperwork delay adds costs and frustrations without improving care, prior authorizations apply to about 3% of our claims, and since january 1st of 2024, we've removed more than 400
▶ 0:43:58Services 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 remains in human hands. The united states now spends more than $5 trillion a year on health care.
▶ 0:44:28Health insurance premiums are primarily shaped by medical care and drug costs, and where care is delivered when the price is charged for care, rise premiums and out-of-pocket costs rise to hospital spending increased by nearly 10% in 2023 and again in 2024, the fastest rate in more than three decades, outpacing
▶ 0:45:01Inflation and wage growth. Prescription drug spending grew nearly 8% in 2024, and now represents a quarter of what employers spend on health care.
▶ 0:45:16Costs also rise when the same service is billed at a much higher price in a hospital setting than in a physician office or urgent care fraud, improper billing and administrative requirements also add costs that ultimately show up in premiums. We're focused on practical solutions that lower costs and make healthcare easier to navigate.
▶ 0:45:45Our 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, and we work with doctors and hospitals to help patients get the right care at the right time and in
▶ 0:46:18The right setting. For example, our concierge care oncology program has lowered chemotherapy related hospital admissions by more than 60%. We're committed to being part of the affordability solution because when healthcare is too expensive, people delay care. Employers struggle to offer coverage, and families lose peace of mind.
▶ 0:46:46Keeping care within reach requires common sense reforms that address root causes, such as hospital price growth, rising prescription drug prices, unnecessary paperwork, and a lack of transparency with discipline and partnership, progress is possible. Thank you again for the opportunity to be here.
▶ 0:47:12I look forward to your questions and to working with you to make health care more affordable. >> I thank you. We're going to hold for just a second, and I'm going to make a housekeeping announcement. We're expecting votes at 1030. The ranking member and I will do our questions, and then we will recess until after the vote is completed. But we will start as soon as we have the ranking member, myself, and a majority of the subcommittee here. We will start with questions again in order to meet our time deadlines.
▶ 0:47:41That being said, I now recognize Mr. cordani for his five minutes. >> chairman. Guthrie, chairman, griffith, ranking member pallone and degette and members of the subcommittee. Thank you for the opportunity to testify here today on one of the most pressing challenges facing american families and employers, which is the cost of health care. My name is david cordani, and I serve as the chairman and ceo of the cigna group. We're a global health service company.
▶ 0:48:07We serve millions of americans through employer sponsored coverage and union based coverage programs, and our services are designed to improve affordability, broaden access, and make care easier to navigate. And while I am proud of the work we do, we know there is more to be done at a high level. There are three areas where we could further improve the us health care system for the benefit of patients.
▶ 0:48:29First, we must focus more resources on the patient earlier in the care journey, especially programs that prevent chronic disease and support long term health. Second, we need to better align incentives for providers and pharmaceutical manufacturers that reward based on the clinical outcomes, not just the volume of services that are consumed. And third, we must further leverage competition in america, where it is proven to lower costs and improve care for the benefit of patients.
▶ 0:48:57I joined cigna more than 30 years ago, and during that time I've seen amazing advancements in medical care. Over that time, I've also seen medical costs continue to rise at multiples of inflation. And as discussed, many americans feel that pressure every day at the kitchen table or at the coffee table, which is why this discussion is so important. The us health care system does generally provide quick access to high quality care, but we know access is only meaningful if it's affordable.
▶ 0:49:27The system requires health plans, hospitals, drug manufacturers, physicians and policy makers to work together with the patient at the center. At cigna, we're focused on expanding access to preventative care, coordinating services around patient needs, and increasing transparency so people better understand how their health care costs are being spent. But today, our system overwhelmingly pays for care after people become sick. Prevention and sustained engagement are more the exception than the rule.
▶ 0:49:56We do know a better approach works for people living with chronic conditions. We have redesigned coverage and care models supporting prevention and treatment adherence. This means eliminating or lowering out-of-pocket costs for life saving medications. It means coordinating medical, pharmacy, and behavioral care for the whole person, and it means giving patients the support they need to stay healthy and avoid costly complications. But expanding these solutions requires us to confront the underlying cost drivers as well.
▶ 0:50:28For example, since 2000, the cost of a hospital stay is increased 220% in america. In 2024, the median launch price of a new pharmaceutical was $370,000. That's up from $2,000 less than 20 years ago, or a 12,000% increase. These prices put many treatments out of reach for individuals or employers, especially when competition is delayed or blocked. We also need to recognize there are broader forces at work here as well.
▶ 0:50:59Our population is aging and more americans are living with chronic conditions that increases cost across the entire system and drives premiums up, just as increasing fuel prices might drive up costs across the economy. More broadly, at cigna, we work tirelessly to counterweight these pressures our ability to drive competition, for example, among generic drugs, has led to some of the lowest generic drug pricing in the world and where we could effectively harness competition with brand drugs.
▶ 0:51:29We are driving meaningful savings for patients. For example, we've been able to cap the cost of insulin at $25. We have biosimilars available to many patients at $0 out of pocket, and we are further modernizing prescription benefits to deliver lower costs at the pharmacy counter through greater transparency. This focus on solutions matters most for people when they're at their most vulnerable. For example, a cancer diagnosis is devastating for both the patient and the family member.
▶ 0:51:59We built care models that eliminate out-of-pocket costs and connect patients quickly with top specialists, supported by focusing again on outcomes, not volume. Our goal here is simple get the right care at the right time without adding financial stress. We do recognize that no single company or sector could solve this alone.
▶ 0:52:18That's why we at cigna stand ready to work with congress, this committee and the administration more broadly and partner within the health care sector to further prioritize focusing on prevention, rewarding based on value, not volume, and leveraging competition to further lower costs for the benefit of americans. I look forward to your questions today. Thank you. >> thank you. Now recognize Mr. markovich for his five minute opening. >> thank you, dear chairman guthrie and h.
▶ 0:52:46Griffith ranking members pallone and degette and members of the committee, thank you very much for the opportunity to testify before you today. My name is paul markovich. I am president and ceo of ascension, a nonprofit and the parent organization of blue shield of california. Our healthcare system is bankrupting and failing us. It's way too expensive. It's too impersonal. It doesn't cover everybody. It as inferior quality scores relative to other countries. And it's mistrusted by far too many americans. This is unacceptable.
▶ 0:53:18We all are mortal, and therefore we are all going to need the health care system when our loved ones need to access it. We want them to be able to afford it and to get treated the way they deserve to be. Our nonprofit organization describes this as a healthcare system that is worthy of our family and friends, and sustainably affordable for everyone, or simply worthy of us.
▶ 0:53:39We are a long way from that ambition right now, because there's too many times when the participants in the health care system, health plans, hospitals, physicians, pharmaceutical companies and others put profits ahead of patients and are complacent about how complex, inconvenient, and inefficient our current system is. This leaves consumers, employers, and the government financially stressed and frustrated with the impersonal and inconsistent service that they receive.
▶ 0:54:08The 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 all take accountability for doing so. We don't need more explanations as to why health care costs so much, or more. Attempts to blame others for the problems.
▶ 0:54:29We need to enact bold reforms as soon as possible that force everyone in the health care system to improve the health of america's americans more efficiently. Specifically, there are four things we need to do. First, ensure every american has access to a comprehensive, real time digital health record that can be used to personalize their health care and take a lot of administrative cost out of the system.
▶ 0:54:56Second, break the do more, get paid more fee for service model and instead 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, we need to put the entire health care system on a budget. We need your help to make this a reality. Well, it's possible for the health care industry to adopt changes on its own.
▶ 0:55:24Based on my experience, including 13 years as a ceo who's been trying to pursue change, I've come to the conclusion that the system will not fix itself. The health care system needs some tough love and clear direction, and the american government is in the best position to provide both. I'm proud of the many things that nonprofit blue shield of california has done to try and address this health care crisis, for example.
▶ 0:55:49To my knowledge, we're the only major health plan in the country to have voluntarily pledged to cap our profit at 2% of revenue and have given back more than $800 million to our customers in the community.
▶ 0:56:03As a result, actively supported legislation for the federal government to negotiate directly with pharmaceutical companies, move to a new pharmacy distribution model that does not rely on a pharmacy benefit manager, and supported a statewide office of health care 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.
▶ 0:56:29The average cost of a family health insurance policy is now more than $27,000, or the cost of a new car. Every year, I and we are a part of the problem with the affordable, highly flawed health care system we have today. But I'm committed to doing our part to fix it. We have an affordability crisis. Our health care system is broken, but we are not.
▶ 0:56:57On behalf of blue shield of california, I'm ready to work together to create a health care system that is truly worthy of us. Thank you. >> thank you, miss allen. We now recognized for five minutes.
▶ 0:57:13>> chair guthrie and griffith, ranking members pallone and degette and members of the committee, thank you for the opportunity to testify on the importance of the affordable care act and the essential premium tax credits that make health insurance accessible and affordable for more americans. My name is ellen allen. I am from west virginia. I'm a daughter of appalachia who has formerly worked since I was 15 and informally since I was 12 years old. I mowed the lawns of many of my neighbors and picked up discarded glass bottles.
▶ 0:57:43Soda bottles mostly took them to the local grocer, and leveraged those through a soda pop and a moon pie. Well, I wasn't born into great wealth. I did enjoy the privilege of growing up in a middle class working family in southern west virginia. I ate well, I was dutiful to my annual physicals, and I took good care of myself. Still do so today. One of the privileges I have enjoyed throughout my life is access to high quality, affordable health insurance.
▶ 0:58:11I'm 64 years old and I have essentially never lived a day without health insurance. Until the last three years, I always had employer sponsored health coverage. I changed jobs in 2023. The small organization I work for today can't afford the $50,000 for the annual premium to cover two of its employees two employees. I'm enrolled in the aca in august of 2023 and remain enrolled today.
▶ 0:58:36Last month, I did what millions of americans and tens of thousands of west virginians did. I went online to reenroll in my health insurance through healthcare.gov, the aca marketplace. When I saw my new premium, I felt a pit in my stomach while I was expecting to see an increase. It was a punch in the gut to see my premium had jumped 323% in 2025.
▶ 0:59:02I paid just under $500 per month, nearly $6,000 a year for a bronze plan that included vision and dental. I liked this health care plan and it was somewhat affordable, even though I had a high deductible and $9,200 maximum out of pocket cost in 2026. With the expiration of the enhanced premium tax credits. My monthly premium is now just under $2,000, and that's without vision or dental. I simply couldn't afford it.
▶ 0:59:29I was forced to drop that and my maximum amount maximum out of pocket now is $9,900 for this year, almost $10,000. Despite taking good care of myself, eating well, maintaining an active lifestyle, I have developed chronic conditions that can be managed with medications and sometimes more invasive procedure. But this means I am likely to hit my maximum out of pocket expenses.
▶ 0:59:56So far for the first eight months of this year, I'll be eligible for medicare in september. It will cost me almost $16,000 in premiums only. Then add the 40% of co-insurance I'm responsible for, and I'm likely to face over $25,000 in health care related costs for me alone. And that's just the first month's first eight months of 2026.
▶ 1:00:21This is a lot to ask of a hardworking american who has worked every day of her adult and teen life for the last few years. Millions of americans, including 67,000 west virginians, have been able to afford market based coverage thanks to the enhanced premium tax credits. They kept people insured, they kept small business owners covered. They kept families healthy. The tax credits helped reduce west virginia's uninsured rate from approximately 20% to below 6%.
▶ 1:00:50I think that that is an extraordinary achievement in health care. West virginians know what it means to work hard and play fair. We expect fairness. We expect fairness. And right now, there's nothing fair about a system that makes us choose between saving for retirement or dipping into our savings to pay for a procedure that is life preserving. Or, as several people I know are doing, they're dropping their health insurance altogether and rolling the dice.
▶ 1:01:17In conclusion, I just want to emphasize this is fixable. Congress can act now to restore and make permanent the aca's expansive expanded premium tax credits. Doing so would save lives, protect families, and strengthen our economy.
▶ 1:01:34Urge this body to consider a three year extension of their credits, and during that time, please work on bipartisan ways that truly make healthcare more accessible and affordable for every american and every stage of our lives. The expiration of the epcs is not an economic inevitability. It's a political choice. Healthcare is not a luxury. It is a necessity.
▶ 1:01:58The ability to access and afford coverage should never depend on how much money you make, where you work, or who you voted for when. In conclusion, again, when lawmakers choose to cut taxes for the wealthy instead of keeping healthcare affordable for working families, they're choosing who wins and who loses. And it's clear that people like me and my fellow west virginians are being asked to lose the policy decisions, sacrifices, our health care.
▶ 1:02:29It's time for our leaders to put people before profits, families before corporations and patients before politics. Because when we say healthcare is a human right, it's time we act like it. Thank you again for the opportunity. I look forward to your questions. >> thank you, miss allen. We now begin questioning. I ask that members not begin a new question to our witnesses as their five minutes expire, and would encourage members to submit written questions. For the record, I now recognize myself for five minutes. Miss allen, it's great to have you here today. You brought up fond memories.
▶ 1:02:59I, too, grew up in a son of appalachia. I grew up in virginia, on the other side of the line, and used to collect bottles at the waysides between christiansburg and salem, where I grew up. Alright, panel as a whole, um, I believe competition lowers costs. Do any of you disagree with me that taking away the ban on physician owned hospitals would increase competition in some provider markets? And if you do disagree, please raise your hand.
▶ 1:03:27Seeing none, I appreciate that. Well then the question becomes do you think there should be more insurance competition or more competition in the insurance market? Uh, particularly in light of the fact that many of your companies own huge swaths of health care, including pharmacies and mail pharmacies and, um, pbms. Mr. hemsley got any thoughts on that? Yeah.
▶ 1:03:57Turn your mic on. >> I apologize. Thank you. Um, while we think it's already a very competitive market, we are always open to competition. >> yeah. The problem I have is you may have heard my opening is, is that we have issues in my district where we in the aca marketplace only have one provider. Um, so, you know, there's not as much competition. Now, I will now ask, um, and Mr. hemsley, you might want to listen as well, but I'm going to ask Mr. cordani.
▶ 1:04:25Uh, I'm aware of the issues that you all have had when negotiating rates in my district in virginia and in east tennessee. How do you reimburse larger systems versus smaller systems in these poorer, underserved or rural areas? >> Mr. chairman, when you say larger versus smaller systems, hospital systems? >> well, yeah, exactly. >> each hospital system negotiation is unique. So each hospital system has its own contractual relationship. And we try to get to the best balance of affordability and access.
▶ 1:04:55We typically serve the employers in your home state. So we get the network or the access to the hospitals and the reimbursements to align. It is not higher reimbursement for larger and lower reimbursement for smaller. They're unique to each provider. >> so when you have only one provider, particularly in the aca marketplace, how does that impact the leverage that you have when negotiating with hospitals. >> in the broader sense? If I understand your question, more choice equals improved affordability.
▶ 1:05:24More competition equals improved affordability. So there's a consistent theme in any aspect of our business. >> and we have a unique situation in east tennessee. Miss harshbarger's district in mine, where because the hospitals were all in threat, both states and the federal government allowed ballad health to have a monopoly. I think it's the only way we could have saved our hospitals. But how does that impact your ability to negotiate with them? >> in general, the phenomenon you describe, Mr. chairman, causes prices to go up on an accelerated basis.
▶ 1:05:52So less choice means more price inflation, whether it's through consolidation or hospitals or otherwise. >> all right, Mr. hemsley, the reason I asked you to pay attention is, is that we have limited number of healthcare access, uh, in the region. And recently, your subsidiary optum bought the hmg or the holston medical group, which is one of the largest if it is the largest provider in east tennessee and provides in southwest virginia as well. How does that impact the ability to have competition in the, in the marketplace?
▶ 1:06:22>> um, well, Mr. chairman, uh, the motivation for that is to drive value based care, um, system, um, that's been described by me and others on the panel to actually get better care, more continuous care, and a better value to individuals.
▶ 1:06:39So it really plays into an effort to make sure that there is, um, good resources available, that value based care, um, can, uh, operate and optimize the experience for individuals and physicians get paid, uh, very effectively under value based care arrangements. >> all right. And I hate to move everybody along, but we're running out of time. Uh, again. Mr. Mr.
▶ 1:07:05Hemsley, based on your company's experience, did the biden administration loosen enrollment validation requirements on the enhanced temporary covid premium tax increases to such an extent that it led to widespread waste in the federal aca program? Yes or no. Specifically talking about shadows, shadow enrollees that you all don't even know who they are.
▶ 1:07:29>> um, uh uh, we do believe that there should be a real oversight in terms of the, um, the aca marketplace and all marketplace to. >> but the loosening, the loosening up of the invalidation requirements led to this dilemma, did it not? Yes or no, because I've got nine seconds. >> um, we believe there should be. Um, so. That's a yes, an oversight. >> you believe that the that that led to an increased number of people who are being insured, that aren't actually insured.
▶ 1:08:00>> we believe there should be more. >> I gotta I gotta yield back and recognize the gentlelady from colorado, miss degette, for her five minutes. >> thank you, Mr. chairman. I want to talk a little bit about what it was like before the affordable care act was implemented, before the aca, 14.5% of americans were uninsured. After the aca, it was 8.6% because of insurance costs. It crept up a little bit. But then after the tax credits were implemented, it dropped back down to 8.2%. Mr.
▶ 1:08:27Cordani, your company offers both aca plans and administers employer based health coverage, correct? >> that is correct. >> um, now, prior to the aca, private health insurance plans were not required to provide coverage for preexisting conditions like cancer or diabetes. Is that correct? >> we, um, madam chair, we participate in the larger employer market. >> no, no.
▶ 1:08:54Before that, before the aca, the plans did not were not required to cover these things, preexisting conditions. Right. >> um, in the small employer marketplace. Correct. In the large employer marketplace. >> now, even in employer based insurance, there could be restrictions like waiting periods on coverage of preexisting conditions before the aca. Is that correct, congresswoman? >> in the small employer market. >> correct.
▶ 1:09:19And plans were permitted to have lifetime benefit limits, where if you became too expensive as a patient, they could throw you off the insurance. Is that right? >> yes it is. >> okay. Now, people might have had to pay also for preventative services to keep them healthy before the aca had the essential benefits included. Is that correct? >> again, in the small employer market, not in the large employer market? >> okay.
▶ 1:09:45Now today, are your plans in the aca marketplace or employer plans in large or small markets permitted to engage in any of these practices? >> um, congresswoman, we we cover approximately 1% of hca. I know we're not. >> I know what you do are your are are people in the large or small markets permitted to say no, you have a preexisting condition? I'm not going to cover you.
▶ 1:10:11There are certain requirements in the aca that everybody has to follow now so that everybody can have insurance. Is that right? >> that is correct. Okay. Is this large employer market are now in this market. >> now the aca has has succeeded in many ways. But clearly and we can agree on this. On both sides of the aisle, system wide work is needed to bring down costs for everybody.
▶ 1:10:35People on exchanges, people with employer based insurance, people with medicare and more enhanced premium assistance built upon what the aca got right, capping the cost of premiums in the individual marketplaces contributed to over 24 million people purchasing insurance on the exchanges last year, including miss allen. So, Mr.
▶ 1:10:57Markovich, I want to ask you, aca premium support is calculated based on some of the lowest premiums in the market. Is that correct? >> yes. >> now, if one plan is more expensive, subsidies don't just automatically increase. Is that right? That's correct. Okay. And that means that plans have to compete on price, not just sit back and let the subsidies roll in. Is that right? >> yes.
▶ 1:11:25>> now, some of my colleagues have said this assistance to middle class americans is a handout to insurers. Mr. joiner, we had enhanced premium subsidies in place in 2024. Is that right? >> correct. >> now at that same year, the health benefit segment of your business took a $984 million operating loss. Is that right? >> correct. >> and so I would say if premium support is a handout, it surely not a very good one.
▶ 1:11:54What premium support is though is help to the middle class is helped to help the middle class afford health care. So I want to ask you, miss allen, when people can't afford insurance, do you think it's worse for the person going without health care or worse for the insurance industry? >> it's, um, it's can be catastrophic for the individual going without insurance or delaying the help they need. >> so.
▶ 1:12:22So I've got 45 seconds left. And some of you know about my daughter francesca. She's a type one diabetic. And last summer, and she's a young lawyer, she had a job through her employer, and she called me up. I was listening to you, Mr. claudia tenney, talk about the insulin prices, but she called me up and she said, mom, can I put my $1,500 quarterly diabetes equipment payment on your credit card?
▶ 1:12:51Because I'm just having a little cash flow problem this month. And I said $1,500 quarterly. She had a $6,000 deductible on her insurance. So we have to fix that. You have to fix that. And you all have to be our patients and fixing that, because that ain't going to work for francesca. And that's sure not going to work for miss allen or anybody else I yield back. >> gentleman yields back by agreement. We're going to get one more set of questions in. Now.
▶ 1:13:19Recognize the chairman of the full committee from kentucky, Mr. guthrie. >> thank you, Mr. chairman. Thank you, everybody, for being here today. And I want to start with, experts, including the congressional budget office, estimated that the expiration of the temporary obamacare enhanced covid credit is projected to increase premiums by anywhere from four and 8%, depending on the market. Yet many areas for 2026 insurers requested and were approved for premium increases of 30, 40, even 50%. So, Mr. boudreaux, you're in kentucky.
▶ 1:13:48So the average obamacare plan increased its premium by roughly 24%, despite what democrats would have. The american people believe the temporary covid credit does little to actually lower underlying obamacare premiums in the american taxpayers are footing the bill. So, Mr.
▶ 1:14:07Boudreaux, by your best estimation, even if the the democrats temporary covid credits were extended, would obamacare plan bids bids in my state of kentucky increase or decrease between 2026 and 2025? >> well, thank you very much for the question, congressman. You know, as we've shared, premiums reflect the underlying costs. >> so they would have increased. Right? I've only got five minutes I'm sorry. So they would have increased regardless of the extended credits. Correct. >> the the credits will give consumers. >> but they still.
▶ 1:14:38>> increase. The overall costs are still driven by underlying root causes. >> so let's talk about the overall cost. So I want to obamacare costs are skyrocketing. The american people are holding the bag. But unfortunately because the incentives have been so warped by the democrats policies, these affordability challenges are not just happening in obamacare, but across all of health care markets. And so I want to focus on a particular incentive, and I would like to quickly go through a few questions for each of the ceos. And I really need a quick yes or no question.
▶ 1:15:06And does the medical loss ratio or mlr put in place by the obamacare? Does it cap the dollars that you can maintain at a percentage of the total amount of the premium payments your companies receive? Does mlr cap what you can maintain based on the premium? Is that yes, for everyone it does. I mean, is it true that if the amount of your premiums go up, then the amount of dollars you can maintain, including profits, would actually increase? Yes or no?
▶ 1:15:36Yes, it would go up. So and as in premiums increase when your company's input costs like hospital reimbursements, provider payments and drug costs increase. So the mlr policy also requires you to spend a set percentage of premiums on medical services. So under the requirements of mlr policy, the less that your companies contain the cost of health care, then the more your premiums increase. And that results in increasing your total profit potential.
▶ 1:16:03So then the obamacare mlr policy, effectively, it's an incentive for your premiums to be higher, because that would because you're penalized when you try to curtail health costs. Is that true? Yes or no? Let's start with yeah, Mr. hemsley, and we'll go down. >> this is a very competitive marketplace. We compete based upon price and premiums. So it is very competitive.
▶ 1:16:31And premiums really reflect the actual cost of health care services. >> so so can I I know I got brief time so we can let each one answer please I'm sorry Mr. >> so in our specific example, congress and we we did not perform well in the exchange last year. So cost actually exceeded the premiums we collected. So regardless of the mlr, we underperformed and actually gave back money to to the government okay. >> so miss.
▶ 1:17:02>> the mlr. We're in a highly regulated environment. Um, we have to as you know, at least 80% of premiums. The majority go to medical costs. Our loss ratio in 24 was 88.5%. And in 2025 we did not make money in the individual. >> exchange as well. >> Mr. chairman, we lost money in the exchange all but two years since 2014. So that phenomenon has not affected us favorably. >> Mr. market. >> uh. >> we've capped our profit at 2% for the last 15 years, so this doesn't matter.
▶ 1:17:33>> so, so so so when you get the you have an insurance business and you get limited on what you can recover, then if it urges you to, to vertically integrate so you can make profits other places. So if the costs are reflective of your premiums, then if you can capture those costs that you're paying out then it gives you the opportunity. So, Mr. hemsley, unitedhealth group has pursued aggressive vertical integration since the passage of obamacare.
▶ 1:17:55And you you have the largest health insurance plan, the one of the largest pbms and one of the largest employer providers, uh, employer of providers. And there's not a sector which you don't have a presence. So if competition helps healthcare, how do you explain the vertical integration? Does that encourage competition and cheaper? How do you how do you explain the vertical integration.
▶ 1:18:16>> and um, it really is a very substantial value dynamic in terms of bringing a better, um, care experience and more value to the health care. Uh, environment in total, by better coordination of care across those spectrums, by better use of data, by, um, more engagement in critical areas, uh, in health care, including, um, how drugs are made available and integrated into
▶ 1:18:46Therapies. >> thanks. My my time has expired, so I apologize and I will yield back to the chair. >> I thank the gentleman for yielding back. I now will declare the committee in recess. We will begin as soon as, uh, we get, uh, relative number back and chairman or ranking member pallone will be up when in the queue. He's up in the batting order when we get back. Thank you.
▶ 1:57:24To order. We are back in session and I now recognize the ranking member of the full committee. Mr. pallone, first five minutes of questioning and I'm taking a I'm taking a minute or two. So we get a couple more members in here before we finishes. Alright, Mr. pallone. Thank you, Mr. chairman. >> I wanted to turn to miss allen.
▶ 1:57:48Just last week, president trump put out his so-called great american health care plan, where he says we shouldn't fund aca enhanced premium tax credits and we should just give cash to people to put in tax exempt health savings accounts. So, miss allen, your testimony speaks to the more than $25,000 in out-of-pocket health care costs you're facing this year.
▶ 1:58:10And that's even with becoming medicare eligible in september in the face of losing the aca enhanced premium tax credits without having access to a health savings account, put a dent in your health care costs. Let's even say that the health savings account was preloaded with a couple thousand dollars, which seems to be what the president's talking about. How does that compare to the reality of the health care costs that you're facing? >> thank you for the question.
▶ 1:58:40Um, you know, frankly, that's insulting. $2,000 deposit into a health savings account for someone whose premium is $2,000 a month does not go a long way. So wouldn't be very helpful at all. >> you. My point is that the president and I think the republicans are not facing the reality. They have these ideas. Um, you know, which they even some of them passed on the floor a couple of weeks ago. The president talks about it.
▶ 1:59:08Uh, but they're not really addressing the root causes of rising health care. And the only people that I know who, you know, you know, talk about this, you know, willing to do a high deductible, we hear, like, could be 7 or 8000 a year, and then, you know, you get a couple thousand in a health savings account or people that are wealthy because you can't it seems to me you can't, um, you know, put money into.
▶ 1:59:32First of all, you can't even put money in a health savings account unless you have some excess money to spare, right? And so this idea of, um, of, you know, highlighting health savings account as an answer, it just isn't it just it only benefits the wealthy, in my opinion, because the majority of americans can't afford, you know, their medical bills, much less pre-fund a tax advantaged account for thousands of dollars. Uh, it doesn't do anything for them.
▶ 2:00:02And I really think that if you want to address the affordability crisis now, uh, the only answer is extending the aca enhanced premium tax credits. Um, but let me go back to, um, I don't know if we have time for everyone, but I wanted to go, uh, ask some of the ceos. I'll. I'll start, I guess, with, um, Mr. uh, markovich, um, where to?
▶ 2:00:30The companies who provide coverage on the aca marketplace and ask for the plans. Your offer? Uh, what are you, uh, what are people telling you about the coverage? What are you hearing from them? I'll start with you, Mr. markovich. Well, um, what we're seeing is that for certain people in certain categories, uh, their premiums are going up quite substantially as a result of, uh, the expiration of the tax credits. I was speaking to, uh, member in california last week. He's 61 years old.
▶ 2:00:59He's the proprietor of a small business. He's been a ten year member under the aca, covering himself, his wife and his two daughters. And his premiums were going to go from 1600 a month to almost $5,000 a month. He simply couldn't afford it. And he ultimately ended up putting his wife and two daughters on, um, a bronze plan, a much less rich plan. And he's literally going uncovered and just trying to hang on until he's eligible to for, for medicare.
▶ 2:01:26So, um, for, for people in that category, higher income, uh, 400% of the poverty level and, and that age bracket, it's been some significant increases. >> and the same thing is happening in my home state, right? In other words, you you have, um, people whose premiums have doubled, uh, tripled because of, uh, the republicans inaction on the premium tax credits.
▶ 2:01:55Um, and the problem is, if you go from silver to bronze, uh, you know, you often have less coverage or you have a higher deductible or higher co-pays. And, you know, I just when the republicans say, oh, that's okay. Um, it just doesn't work for the average person. And the idea of having these health savings accounts to make up the difference is completely out of reach. Uh, for for people who are middle income. That's my experience. So I know I can't go down the whole list here.
▶ 2:02:24My time has run out. Thank you, Mr. chairman. Gentleman yields back. Now. Recognize the gentlelady? Vice chair of the subcommittee, Mr. harshbarger from east tennessee. >> thank you, Mr. chairman. Thank you to the witnesses for being here today. Um, today we're here because american families are being crushed by health care costs and the failures of obamacare. And insurance companies sit at the very center of that system. Premiums are up, deductibles are up, choice is down.
▶ 2:02:52And meanwhile, insurance profits consolidation and executive compensation continue to rise. This is not a failure of doctors or patients. It's a failure of a system that rewards bureaucracy over care, opacity over transparency and market, uh, power over competition. So first, I want to touch on the issue of consolidation and vertical integration.
▶ 2:03:19And as a pharmacist, both in my practice and from health care providers across the country that contact me, there's a real concern when a single corporation controls coverage, pricing, dispensing and care decisions when that level of vertical integration exists, competition erodes and patients end up paying more. That's just a bottom line. There is a chart to the right of me and what we see. This is what it looks like in real practice.
▶ 2:03:47The same corporate family decides what's covered. They set the drug prices and the rebates through its pbm. It controls the pharmacy counter. It owns the doctors and the clinics, and they make referrals. And it increasingly controls the data and analytics that drive the utilization decisions. Ladies and gentlemen, that's not competition. That is control. And that isn't just participating in the market.
▶ 2:04:18It's writing the rules of the market. So we're going to start with some questions first, Mr. hemsley, and then I'll go to Mr. joyner. What prevents your companies from steering patients to their own pharmacies and clinics, prioritizing your own pbms or designing benefit structures that disadvantage competitors?
▶ 2:04:38And if your answer is simply going to be existing law or existing regulations, you need to pinpoint specific guardrails that affirmatively stop those practices, Mr. hemsley. >> well, thank you, representative, for the. >> and I've got a short amount of time. So you need to be quick, sir. >> I think there are a number of factors. Um, the objective here is to actually provide a better value and a better experience to the consumer.
▶ 2:05:04And there are many regulations and, uh, business practices that ensure that, um, uh, okay. Marketplace is. >> well, you can you can submit that in writing to me. Your answer. >> and if you could pull the mic a little closer. Yeah, pull the mic a little closer to your mouth so we can hear you. >> Mr. joyner, same question. >> um.
▶ 2:05:28>> at this point, we see the combination of businesses that we're in is helping solve and or address the challenges in healthcare. I mean, I think people would suggest today the technology doesn't work. There's a fragmented and disjointed experience. So by putting these businesses together, we believe we're solving, for one, the fragmentation that. >> if you're in a rural healthcare setting like my district or, uh, representative morgan's, uh, griffiths district, listen, you have independent pharmacies who are underwater.
▶ 2:05:58They can't get reimbursed properly. They lose money on every prescription. You have physician practices who cannot get it together. They go bankrupt because of the vertical integration within these entities. So you can also submit in writing your answer to that, sir. Uh, yeah. Mr. hemsley, um, you know, I'm used to following the money, especially when patients are told something is about affordability. And aarp presents itself as an independent nonprofit speaking for seniors.
▶ 2:06:26But its own financial filings show that unitedhealth paid aarp over $9 billion in a single deal, far more than aarp brings in from membership dues and more than four times its annual operating revenue. They also earned royalties tied directly to insurance premiums, meaning more seniors pay. The more they pay, the more aarp makes. Yet that same organization lobbies congress on affordability and pushes policies that benefit large insurers like yours.
▶ 2:06:56So before we accept aarp as an independent voice for seniors, we need some straight answers about who this relationship is really serving. So I have two questions. Why does unitedhealth pay aarp roughly $9 billion? And what does unitedhealth get in return? And what percentage of aarp's total revenue comes from united health today? >> um, thank you for the question, representative. Um, we've had a long standing relationship with aarp more than 20 years.
▶ 2:07:25Um, and we serve their members. Uh. >> well, you're not answering my question, sir. >> well, and and we, uh, extended that, um, for an indefinite time. >> well, I'm out of time, so you can submit your answer in writing. Thank you, sir, and I yield back. >> thank you very much. Gentlelady yields back. Now, recognize the gentleman from california, doctor ruiz. >> thank you very much. Uh, I'm an emergency medicine physician. I work in the emergency department. Uh, and I've treated many patients and also many uninsured patients.
▶ 2:07:54Um, I just want to cut to the chase and get to the effects of a growing population that are uninsured onto the health care system. Uh, miss brad knott, Mrs. bourdeau, you said in your testimony that hospital, uh, pricing is a part of increasing costs. Uh, Mr. uh. Markovich.
▶ 2:08:21What what does a growing population in the millions of uninsured patients do, uh, to a hospital for uncompensated care? >> well, that's the dynamic. Is that people then? Uh, by law, hospitals have to accept patients that come to the emergency room irrespective of whether they have insurance or not. And then typically what happens is they don't get reimbursed or they get reimbursed very little for that care.
▶ 2:08:47And then they're generally increasing or looking to find that revenue from other sources. And so it has. >> what sources do they do. >> they come back to the plans and negotiate higher reimbursement. >> so they negotiate high reimbursements from the plan. And what does the plan then do in preparation for that? >> well, I mean, we do our best and to keep the rates as low. >> as your best, but.
▶ 2:09:13>> but I mean, there's just many circumstances in which in order to serve a population and provide access, you have to have these hospitals in the network and you end up raising your price. >> in other words, you raise the price. Raise the premiums is what you just said. Yeah, okay. And what happens to the individual who is uninsured? They no longer seek care. They can't afford the care what happens to them in their health. Uh, outcomes. >> well, there's been studies on this. Their life expectancy tends to be lower. They tend to delay health care. >> so they die earlier. You're saying.
▶ 2:09:44>> they die earlier and they generally aren't in as good a health. >> so they're sicker. And when they get sick, where do they go? Do they see a primary care doctor or where is their safety net? Do they go the uninsured? >> excuse me, congressman, they go to the emergency room. >> typically they go to the emergency department. The emergency department is one of the higher costs places to get care or the lower cost to get care. >> higher. >> higher costs. So they go to the hospital higher cost. They're sicker. The hospital gets uncompensated care.
▶ 2:10:15They're negotiating higher prices so they can keep their doors open. And so you're increasing premiums. Okay. Now I just want to make this point clear, because the republicans just passed the big ugly law, right. That cuts medicaid up to $1 trillion. It's going to leave 15 million people uninsured. But they said, no, it's not going to affect anybody.
▶ 2:10:42We're only going to try to get try to get those that are scamming the system by creating overburdened administrative requirements. But we've argued all along that doing that, it's going to raise costs for everybody. And we just made the link that the uninsured population becomes uncompensated care strains hospitals. They have to keep their doors open.
▶ 2:11:12They're going to put pressure on all of you during negotiations and you will increase premiums. Do you agree? Cordani Mr. cordani. >> congressman, the phenomenon you described is correct. >> do you agree, Mrs. bordo. >> the phenomenon that you described is important, but I think. >> do you agree, Mr. joiner. >> I agree. >> do you agree, Mr. hensley?
▶ 2:11:36Every single health insurance people here is, is stating that because of the 15 million uncompensated care produced by the republican big ugly law, that everybody else's premium is going up and and this uncompensated care is going to cost hospitals $400 billion. Okay.
▶ 2:12:02In addition to that, this big, ugly law reduced revenues to hospitals by over $600 billion. So costs are going up by $450 billion, and the revenue has gone down by 600 billion over more than $600 billion. That's about a net loss of over $1 trillion for just hospitals alone.
▶ 2:12:26In addition to the nearly trillion dollar cuts to medicaid, the big issue here is the health care crisis that republicans have created that is in cut medicaid in order to give billions in tax cuts to billionaires. And it's raising premiums across the board for all of those who have your insurance. And I yield back. >> gentleman yields back.
▶ 2:12:54Now recognize the gentleman from florida, Mr. bilirakis? Thank you, Mr. chairman, I appreciate it. Thanks for holding this hearing. It's very critical hearing. Uh, insurance companies play a significant role in our health care system, as everyone knows. And it's our duty as lawmakers to ensure that our families and constituents can access the care they need.
▶ 2:13:15I often hear from constituents who experience delays or denials for specialty drugs for conditions like hemophilia or rheumatoid arthritis or cancer, patients cannot deal with burdensome processes to re-up their medications, especially when missing a dose could be life threatening, or they cannot afford to pay thousands of dollars out of pocket. So the first question is for Mr.
▶ 2:13:45Hemsley how can we fix this broken system where patients often feel like they either pay out of pocket if they can, or jump through hoops to access medication? Mr. >> well, um, thank you for the question. I think it's a very thoughtful question.
▶ 2:14:02Um, I think that we should be advancing, um, and there are protections in the market that when people change their, um, plan coverage, that there should be continuation of care, um, and the prior authorization, um, disciplines in the space can also be strengthened and improved and made in a real time basis so that there isn't delay in care. >> okay. If follow up here from the perspective of of an insurance plan, would you rather again for Mr.
▶ 2:14:31Hemsley, would you rather spend a dollar to pay for a patient's prescription that may prevent an adverse health event, or would you rather spend it on paying a hospital bill after an adverse health event takes place? Um. >> you can very well framed, uh, question. Thank you. Representative.
▶ 2:14:52Um, we are very much oriented to preventative care and proactive care and, uh, avoidance of, um, more serious and acute experiences and higher cost settings. >> okay. So the answer is you'd rather. Prevent the prescription as opposed to having somebody, uh, I mean, it's a quality of life is so important to I mean, you can't put a price on a person's life, that's for sure.
▶ 2:15:19So as co-chair of the congressional rare disease caucus, I spent years promoting policies that help bring innovative cures to market. And rare disease companies have made remarkable progress delivering these cures. I think most of you would agree with that. We know that earlier intervention with new treatments like gene therapy can give patients a second shot at life. That's priceless and save money in the long run.
▶ 2:15:46Of course, cell and gene therapies could reduce total disease costs and productivity by up to 30% for certain serious conditions in the us, potentially translating to billions in savings. Or you can't put a price on a person's life or quality of life, in my opinion.
▶ 2:16:09So however, we often hear that these drugs are denied by insurance companies due to policy exclusions or cost concerns. Despite their overwhelming benefits. So the second question is for Mr. cordani, how does cigna approach coverage decisions for high costs? But high impact treatments like gene therapies?
▶ 2:16:34What types of innovative payment models does your company deploy to deliver these innovative treatments to your members at an accessible price? >> congressman, thank you for the question. Um, two parts of my answer. One is the coverage policies are determined, typically employer by employer, that we serve. We serve large employers. We will advise them based on the clinical evidence and the vast majority of the coverage that we're able to provide for our large employers, our comprehensive coverage back to innovative programs.
▶ 2:17:03If you take some of the most expensive gene therapies, there are several that are in excess of $1 million per dose. We were the first to offer a program that actually took all the affordability risk away from the employer through our embarc program, by simply charging $1 per member per month, because no one was able to predict when that event was going to transpire. But we needed to have access for the benefit of our employers.
▶ 2:17:27That's an example of an innovative program that removes the uncertainty for the employer while ensuring that access exists. If the unique need for one of those one, 2 or $3 million pharmaceuticals are necessary. But getting to comprehensive coverage is typically working with the employers and advising them on the most comprehensive coverage possible. >> okay, thank you very much. And I yield back. Mr. chairman. >> gentleman yields back. Now recognize the gentlelady from michigan, miss dingell for her. >> thank you, Mr. chair.
▶ 2:17:56And thank you and ranking member for holding this important and very timely hearing, because it's coming at a pivotal moment. Millions of americans across the nation have seen their health care premiums skyrocket because of both the expiration of the affordable care tax credits last month.
▶ 2:18:15The only thing that made a lot of people able to afford it, but also because of the passage of behave today and just call it the big brutal bill insurance sent out renewal notices a couple of months ago notifying consumers that their premiums were going to skyrocket in 2026. Yet all of you are posting record profits, approving millions of dollars worth of ceo compensation packages, packages, executive bonuses, and paying your shareholders.
▶ 2:18:46Let me tell you something. People are really struggling. I hear these stories every single day. The moms are the worst. They're too. They're not able to get their kids their medicine. Even parents with asthma, their children have asthma, can't afford the inhalers. Make no mistake that we're seeing a ripple effect. My colleague next to me just talked about some of them that are going on. The american people deserve better. I want to start with miss allen.
▶ 2:19:13I want to thank you for being here today and for your willingness to be one of the faces that is sharing your personal story. It's important for everybody in this country, but especially the executives at this table, to understand directly from real people living with the consequences of both what happens here in congress and what happens in the insurance companies, like nearly 200 million americans.
▶ 2:19:41Miss allen is living with a chronic health condition that makes consistent and affordable coverage important. Miss allen, I know you had no choice but to buy the bronze plan on the affordable care act marketplace. You want it to buy the silver, but you just you couldn't afford it. Can you explain what that means in real terms? >> thank you for the question so very much. Um, yes.
▶ 2:20:06I was hoping to purchase the silver plan just to reduce my total out-of-pocket costs. I mean, 40% coinsurance, the out-of-pocket cost. I knew I would face $10,000, potentially and actually likely. Um, so that's money that I actually took out of a savings account to, to pay my health. Health care costs. And, you know, I'm closer to retirement right than not.
▶ 2:20:33So that is not helping me, uh, secure my economic viability in my retirement years. >> may I ask you one more question and then move to the others? But you. You're affordable care plan that you have. How many? It's worked. Right? How many claims have been denied? >> you know, I've had essentially no claims denied with my plan. I've been very happy with my plan, particularly with the tax credits up. >> until this year. Correct.
▶ 2:21:02>> until this year, I think I've had one specialty eyedrop medication denied, which eventually I was able to secure. >> now I'd like to turn to Mr. hemsley, who is the ceo of the country's largest insurer. A cbs news analysis of about 1.3 billion federal health insurance claims across three years shows that in 2024, for insurers, insurers denied 19% of in-network claims. About 1 in 5.
▶ 2:21:32Unitedhealthcare, in particular, denied as many as one third of its federal claims in the preceding two years, all while raking in record profits of $400 billion. Patients who are battling terminal illnesses are spending the last days and months of their lives with loved ones on the phones, battling with their insurance company, and essential treatments are being denied. Mr.
▶ 2:21:59Hemsley should sick patients who don't want to leave their families with bills have to spend hours on end fighting to get their treatments approved? >> um, congressman, thank you for the, um, question. Um, it is very important that people, um, don't go through that kind of complexity. >> and so how are you simplifying it? Because I don't have a lot of time. And I. >> would love to to comment on that. Really.
▶ 2:22:25Only about less than 2% of all the interactions that we receive are under a prior authorization review. And the vast majority of those are administrative. And at the end of the day, 99% of all the care is covered. We should be doing more to expedite and make the prior authorization authorization processes quick, real time, accurate, crisp, and not interfere with care.
▶ 2:22:54>> so are you telling me the fact that one third is denied is not true? >> it's not consistent with our experience at all. >> I have more questions for the record. Thank you, Mr. chairman, I yield back. >> gentleman yields back. Now recognize Mr. carter of georgia for his five minutes questioning. >> thank you, Mr. chairman.
▶ 2:23:15Between 2014 and 2024, the seven largest for profit health insurers including united, cvs, cigna and elephants raked in over $10 trillion in revenue, $10 trillion and $543 billion in profits. In fact, since the passage of the affordable care act, the stock prices of these health insurers has increased by over 1,000% 1,000% premiums are rising, and patients struggle to afford care insurance.
▶ 2:23:45Executive compensation continues to increase at the expense of patients americans now owe. And hear me and hear me clearly. Americans now owe. $220 billion in medical debt, $220 billion. To put it simply, the system is failing the people it's meant to serve, and that is the patients. Mr. joyner, Mr. joyner in 2024, cvs health spent a staggering $41 million in compensation to you and your colleague karen lynch.
▶ 2:24:13This is enough to cover the premiums for thousands of american families. How do you justify getting paid that much when so many of your patients struggle to afford skyrocketing premiums, $41 million, Mr. joyner. >> that that was. Congressman, thanks for the question. >> I don't don't thank me for the question. Just answer them, please. >> um, that was not my compensation, um, that you referenced, um, this past year.
▶ 2:24:43Um, my compensation was 17 million. >> it was 17 million. >> of which 1.1, of which 1.1 was my base salary. And the rest is long term incentives. And the bonus. >> I just met with some pharmacists out there who want to say, you're welcome. They helped you pay that. They helped pay your salary. >> yeah. And I think it's important to note, based off the performance of the year, I did return my bonus back to the employee relief fund. Um, so the employees that were going through challenging and difficult times got the benefit of my bonus last year. >> cvs employees. >> yes, sir. >> going through the difficult.
▶ 2:25:14What about the patients who are trying to pay their premiums going through difficult times? Let me ask you, Mr. hemsley. Yes or no? Don't thank me for the question. Just yes or no. Have you ever personally looked into the patient, a patient in the eye, and explained why your company denied them a medication? Their doctor said that was needed. >> um. >> have you ever personally looked a patient in the eye and told them that. >> I have looked patients in the eyes many times?
▶ 2:25:41Um, I don't recall whether it's regarding a prior authorization, but it is. >> well, Mr. hemsley, let me tell you, I practice pharmacy for 40 years. I'm the one who had to look the patient in the eye. I'm the one who had to tell them that on your behalf. It's not fun. Mr. hemsley, I want to tell you a story about andrea kelly. She's a single mother from kentucky who was diagnosed with stage two breast cancer and has endured years of chemotherapy, surgery and radiation just to stay alive.
▶ 2:26:12And she wants to stay alive because she's got a seven year old daughter. Despite being stable on the medications for years, unitedhealthcare is now denying andrea her lupron injection and veozah medication, according to her doctor, these denials are actively increasing, as you would imagine, and you understand they're actively increasing andrea's risk of cancer recurrence. This is not about convenience or cost. This is about whether her cancer comes back.
▶ 2:26:39To quote andrea and I quote, I am a single mom and would do anything to live as long as I can for my daughter, who is now seven, I need access to my medication so that I can live for my child. End quote. It was me. I was the one who went to the counter. I was the one who had to tell him that. Not you. Not you, Mr. joiner. Not any of you on this panel, but me, the pharmacist.
▶ 2:27:06I was the one who had to tell them that. Mr. hemsley, knowing that your company's denial raises andrea's risk of cancer recurrence, why is unitedhealthcare overriding her doctors and denying her medication? Do you have any idea? >> um, I don't know that particular circumstances. >> can you help me out here? Because I want. I want to help her. What can I tell her? What can I tell andrea that she can tell her seven year old daughter?
▶ 2:27:36>> actually, I would love to learn more about that and see if we can't help solve that problem. >> let me ask you this, Mr. hemsley. President trump's proposing a bold new health care plan, and I applaud him for that one that puts patients in control. Thank god somebody finally realizes instead of sending the money, my colleagues, instead of sending the money to insurance company, send it to the patients. Let them create a competitive marketplace. The president is proposing this.
▶ 2:28:04He wants to put patients in control and expand choice and ensure transparent pricing. Can we count on you, Mr. hemsley, to support president trump's great health care plan? >> uh, representative, um, we will be open to any kind of bipartisan solution. And I think the president's thoughts contribute to the conversation. Uh, good ideas to be considered. Uh, but. >> I certainly hope so, because for 40 years, I'm the one.
▶ 2:28:32I'm the one. Thank you, Mr. chairman, I yield back. >> gentleman yields back. Now. Recognizes the gentlelady from california, miss barragan, for her five minutes of questioning. >> thank you, Mr. chairman. I want to just ask the witnesses. Um, all of you here, uh, accept the the witness on the end. Uh, all of you get a stock option or a stock benefit for your compensation. Is that correct, Mr. hensley? >> yes, representative. >> and Mr. joyner.
▶ 2:29:02>> yes. >> uh, miss. >> I do as well. Tied to long term incentives. >> okay. And, um. >> yes, I do. >> uh, no, we don't have any ownership or stock. We're a nonprofit. There's no ownership. >> okay? You get no, you get performance bonuses instead. >> correct? >> okay. So those of you who have stock, um, your company has to do better or good for you to maintain that value in that stock. Is that right?
▶ 2:29:31Nobody disagrees with that, right? You're all in the business of making a profit, right? Nobody disagrees with that. Okay. Um, Mr. hensley, you got a $60 million, one time equity award. That's a lot of money for my constituents. Uh, when I said we were having this hearing today as to what would you ask?
▶ 2:29:59They said, we want to know why they're making so much and why we can't afford our health care, or why we stretch every penny and dime to buy health care just to have the claim denied when I actually need it. And that's what's wrong. That is what's wrong in this system. Mr. hensley, you were just asked about denial rates. I have a chart.
▶ 2:30:28I have a chart right here of the denial rates. I don't know if you could see it, but united healthcare group, according to the kaiser kaiser family foundation, uh, study says you're in network denial rate is 33%. That's 33%. You just told my colleague that wasn't accurate. Are you saying the report is inaccurate? >> um.
▶ 2:30:58>> or are you just not aware of what your denial rates are? >> representative. Um, I think we are aware of our denial rates. I don't know the context of what you're showing me. >> okay. So you're not aware of the study? Okay. Excuse me. What? What do you think your denial rate is? What do you think? The percentages. >> yeah, we're having a hard time hearing. If you could pull your mic closer and we'll give you three seconds. Okay. >> what do you think? Your denial rate is. >> less than 2%. >> yeah. That's, like wildly off from any, any numbers that I have seen.
▶ 2:31:27I want to enter into the record. An la times article published in february 2025 that tells the story of colleen henderson and her three year old toddler, who, of course, was insured by unitedhealthcare. They fought your company for five years to pay for specialty care, to treat their three year old daughter's rare condition. She had a tumor in her bladder, a tumor in her bladder.
▶ 2:31:52The family ended up with $1 million in medical debt and was forced to declare bankruptcy because unitedhealthcare said treatments recommended by the doctors were unnecessary. Do you understand why the american people are not a fan of unitedhealthcare and big health care companies? Mr. hensley. >> I think that is a tragic situation. I don't know the details of it, but, um, I'm very sympathetic to situations like that.
▶ 2:32:22>> well, what are you going to do to make sure that more families are not going into medical debt and that their kids can get the care they need because, you know, the alternative is the kid is going to die. >> um, well, I'm glad you brought that up, because I think one of the reasons that motivated me to return to this company is because I think we could be a force for solutions like that, and that we are our mission aligns to that. And my purpose is to improve the performance of this enterprise, to solve those kinds of solutions.
▶ 2:32:51>> well, I hope that we see improvements, and I'm going to be tracking that progress to see if it actually happens. The other thing that's really quite fascinating is that we find that most people will not appeal these denials. Most people don't have the time or the effort. I live in a district where it's working class families. They can barely find the time to show up to two jobs to pay their bills. Do you think they're going to have the time and the effort to, um, appeal a claim? We've seen that less than 1% of claims are appealed, but when they are insurance, reverse their decision 44% of the time. That's almost half.
▶ 2:33:21Why do your patients have to fight your company to get their claims covered? >> representative. Again, I appreciate the subject. Um, it's an important. They shouldn't have to fight. We should make this much easier and intuitive. And we use technology for that purpose. We have a number of initiatives in market right now to make it. >> real time.
▶ 2:33:49The way you're talking about this is not sympathetic. It's not compassionate. I appreciate the topic. These are people's lives. These are children's lives. This is when people you said that you want to help people when they're sick. You know, it doesn't help when they get a bill, when they have to go into medical debt for $1 million, a debt that doesn't help people when they're sick. I hope that you all are going to do better. >> gentlelady yields back and the gentlelady referenced a document. If she could make sure we have a copy of that.
▶ 2:34:19And without objection, it is so ordered to be entered into the record, I now recognize the gentleman from pennsylvania, Mr. doctor joyce, for his five minutes of questioning. Thank you, Mr. chairman. According to cms data from 2024 on total health care expenditures, spending reached a new high of over $5 trillion. Notably, in this report, hospital costs, which now make up over 30% of that 5 trillion, are the steepest, rising costs being paid by the american patient.
▶ 2:34:50One of the reasons driving this has been the trend of hospital consolidation, leading to regional monopolies dominating markets. I hope that this is a topic that this committee will explore in future hearings. For our insurers. On the panel, please raise your hand if you agree with the following statement. Highly consolidated provider markets make it harder to contract at competitive rates for the services. On behalf of your of your customers, I see that, uh, Mr.
▶ 2:35:24Helmsley, Mr. joiner, miss bordeaux, Mr. cordani and Mr. markovic have all risen, have all raised their hands. Thank you. Since the passage of the aca, we have seen costs across all markets continue to increase. One of the key issues driving this is the medical loss ratio, or the mlr, that requires plans to spend either 80 or 85% of your premium dollars on health care expenses.
▶ 2:35:51The mlr created multiple perverse incentives for insurance companies to dramatically consolidate both vertically and horizontally. The companies that you lead today are not just involved in insurance. You own pbms, you own specialty pharmacies, you own retail pharmacies, you own gpos, you own physician groups and practices. In some cases, you own hospitals and you own drug manufacturing companies.
▶ 2:36:20And at least one of you owns a bank. This has led to alleged cases of self-dealing as your companies work to circumvent the mlm requirements. I would like to add for the record, a stat news article from november of last year entitled united health pays optum physicians 17% more than outside providers under mlr rules.
▶ 2:36:46It is now in the insurer's interest to purchase as many health services that count towards that 80 or 85% medical spend requirement to ensure that american's premium dollars merely are just changing hands within your company's corporate structure. Since provider profits are not capped under the mlr in the same way that planned profits are, there is absolutely no incentive to keep prices low.
▶ 2:37:13In fact, it's in your interest to keep driving them even higher, resulting in bigger payments that can make your own corporate owned providers and bigger profits that you can retain legally. Skirting the mlr requirements as a doctor, of which there are many of us on this committee, we took the hippocratic oath, an oath that says, above all, do no harm.
▶ 2:37:37But it is painfully evident that promise that we took is not reflected in the blatant gaming of the mlr, because you are clearly putting corporate profits ahead of patients, and ultimately each and every one of you are hurting those patients. Transparency in this area is critical for us to truly understand what's driving cost increases.
▶ 2:38:01And I would ask that by the end of february in writing to please provide to this committee the names, the size of the business areas of each subsidiary that your company owned, that you have spent premium dollars that would qualify as a medical or quality improvement expense under the mlr. Can you please also provide the percentage of your dollar spent in each individual or commercial or medicare advantage market that went to the subsidiaries that you own?
▶ 2:38:29And can you provide a breakout of how your negotiated rates compare for services delivered by your affiliates versus a non-affiliate provider? Please raise your hand to indicate that you will provide the committee with that information by end february. Seeing that all of the insurers, Mr. helmsley, miss. Mr. joyner miss. Mr. and Mr. markovich have all raised their hands. In addition, the growing physician employment that each of you operate that is one problem.
▶ 2:39:00But you also own some of the largest pharmacies in our country. And this has led to a crisis among smaller and rural pharmacies, especially in my district in south central and southwestern pennsylvania, closing and leaving entire communities unserved. I would also like you to provide in writing a comparison of total cost and spend for routine dispensing fees.
▶ 2:39:21When you pay a community pharmacy in your network against what you pay a pharmacy that you own, please raise your hand to indicate that you will provide this committee that information by the end of february. >> congressman, we don't. >> see all health insurers have raised their hands. Uh, I will follow up with questions for for the record, detailing these requests. And I ask that you stand by that commitment that you just made to answer these questions for my patients and for my constituents. Thank you, Mr. chairman, and I yield back.
▶ 2:39:53>> gentleman yields back. Uh, the gentleman referenced a a document. He wanted to be placed in the record. If you can make sure we have a copy of that and without objection it will be so ordered. Further, I would request that since you asked for specific information by the end of february, if you would put that in writing so that it can be presented to the members who are insurance company executives. >> yes, Mr. chairman. >> I appreciate that. Thank you very much. Now, recognize, uh, the gentlewoman from gentlelady from washington, doctor schrier, for her five minutes of questions. >> thank you, Mr. chairman.
▶ 2:40:22Thank you to our witnesses today. Thank you to doctor joyce for his comments. I wholeheartedly agree. Um, I'd like to talk about medicare advantage today. Uh, specifically with regard to prior authorizations, just to set the stage. I'm a pediatrician and took care kids in my community for almost 20 years before coming to congress. I also have had type one diabetes for over 40 years.
▶ 2:40:45So I get what it's like to be a patient who is dealing with, um, uh, difficulties with insurance companies. Uh, and now I'm a member of congress, and I hear a lot from my from my constituents. And I am here to go to bat for them. So, um, just I'm sure it's not a newsflash for you, but just so you know, uh, people are pretty off at their insurance companies because they are paying more every single year, and they feel like they are not getting the value for it.
▶ 2:41:13And like, you are not living up to your end of the bargain. I mean, they're insurance companies. Your companies, uh, are charging more, paying less, and then delaying or even denying care due to abusive demands for prior authorizations. And I hear the same, by the way, from hospitals, from physicians.
▶ 2:41:35They are telling me that they are forced to hire more people to deal with your paperwork than nurses, and that is just plain wrong. Uh, now, particularly when it comes to medicare advantage, not only do you delay that care with prior authorization demands, but you sometimes flat out deny claims after the services are already rendered. And, um, here's an example.
▶ 2:42:01One of my constituents had a stroke required hospitalization. Uh, this patient had a unitedhealth medicare advantage plan, and unitedhealth refused to pay for that hospital hospitalization because united decided that it was medically unnecessary, overriding the doctor's own medical decision. And so now we've got this senior who's in the hospital, can't go home, stuck with a huge bill, and that is just unconscionable.
▶ 2:42:33And it is shameful that you're doing this to people on medicare advantage. I mean, they paid into the system for their whole lives. They're paying premiums now. They're counting on you to look after them. And I just want you to think about, um, how many elderly patients who suffered a stroke can then go home and deal with sitting on hold with customer service and submitting letter letters, uh, in the appeals process? And it took over a year, by the way, for unitedhealth to finally pay.
▶ 2:43:02Um, Mr. hemsley, if a patient's physician has determined that their patient should be in the hospital after a stroke, why would unitedhealth decline that care? >> um, I'm not familiar. I appreciate the question. And I'm very sympathetic to the situation that you describe. The describe it before. Um, I'm not, uh, I don't have specific knowledge. >> you don't really need specifics.
▶ 2:43:30Like senior suffered a stroke. Doctor said this guy's not safe to go home. They should. United. Overruled. >> they should get all the care that's appropriate for them. Yes. >> um, thank you for saying that. And I will communicate that to my constituents and go to bat for them. I will tell you that paying a bill is the last thing patients should worry about after having a stroke and doing this because a multibillion dollar company doesn't think that it's necessary for them to get their care. I mean, this is why so many people hate their insurance companies.
▶ 2:43:59They pay a lot of money. They expect peace of mind, and then the insurance company leaves them high and dry. Um, a lot of you run medicare advantage plans, but unitedhealth is the poster child for medicare advantage abuse. I mean, we know we all know about padding diagnoses. So you can make patients seem sicker and riskier and then overcharge the government for their care.
▶ 2:44:24Um, but today's focus really is on prior authorizations and, and denials, which you demand more than other insurance companies that take care of medicare advantage patients. And most patients, they just shrug their shoulders. They give up. Um, but the ones who do appeal, 80% of them get get their appeals covered. Um, if these denials are ultimately overturned, why are you doing these pre authorizations and denials? >> um, well, I appreciate the question, representative.
▶ 2:44:54Um, we we have been methodically reducing the area of prior authorization and, uh, expediting that process. We are not trying to do anything. >> with 15 seconds. I'm going to hold you to that. And I will follow up with you about what you're doing now. But I have to tell you that the rest of us, this looks like your business model. It looks like you bet on wearing patients down on them, not appealing.
▶ 2:45:22And then they either decide to just eat the cost, or they die before they, uh, get the care they need. And my constituents are sick of it, and we're sick of it. Doctors are sick of it, and people deserve better. So, uh, we need medicare advantage reform now. Thank you. >> gentlelady yields back. Now, recognize the gentlelady from iowa, doctor miller-meeks. >> thank you, Mr. chairman. And I want to thank our witnesses for testifying before the subcommittee today.
▶ 2:45:50There are many topics, such as prior authorization, which we just heard about, and denial of claims, which the majority of which are later approved without modification. Uh, that I'd like to discuss with our witnesses today. But unfortunately, or fortunately for you all, I only have five minutes, so I'm just going to jump in. Uh, as a physician and veteran and a former director of public health, I strongly support innovation in health care delivery.
▶ 2:46:16But every dollar wasted on inefficiency, waste, denial of claims, or unnecessary billing is a dollar not spent on patient care. That's why senator grassley's recent report detailing unitedhealth group's conduct in the seniors health insurance advantage plans, commonly known as medicare advantage. Um, that report is very troubling.
▶ 2:46:38I've had many doctors within the state, and I myself have experienced, um, what is happening when patients go, ah, patients come back after having visited at home. Medicare advantage was created to improve outcomes and coordinate care for seniors, not to incentivize gaming the system.
▶ 2:47:00Do any of your companies decide a claim for a level of care without documentation or justification for the level of service, or test or imaging? The answer to that is no. You require documentation.
▶ 2:47:15The independent federal oversight reports from hhs, oig, have identified that conditions, including congestive heart failure, were among diagnoses often added via in-home assessments or chart reviews and medicare advantage. So if you would deny a claim from a provider without documentation, why is it that you feel at liberty to submit a claim to cms for a diagnosis based on a home visit?
▶ 2:47:44Congestive heart failure is not a paperwork diagnosis. It's a serious, life altering condition. And when it's added to a patient's record without active management, without their routine provider and doctor knowing that they have the condition that is creating higher payment without accountability, and it is a danger to patients and providers.
▶ 2:48:06Now I'm going to turn our attention to another lesser known player in the health care system that I believe american people should be made aware of. Pbms and pbm gpos, the largest pbms, cvs caremark, express scripts and optum have created rebate contracting entities, or pbm group purchasing organizations, which are adding to the complex and opaque nature of the medicine supply chain.
▶ 2:48:33My first pbm reform bill on transparency was in 2019. As an iowa state senator, pbms claim these entities provide them and their clients with greater bargaining power to lower costs. But recent investigations by members of congress, industry experts, state attorneys general and federal oversight agency suggest the opposite may be true. We have a graph up here. Let's start with the left.
▶ 2:48:58The drug maker who pays rebates directly to the pbms and pbms gpos to ensure their drugs are included on their health plan formularies, meaning the drugs are covered by insurance. Then these pbms and their pbm gpo subsidiaries collect the rebates, which they promise to pass through to their patients and health plans. Can any of you tell me what percentage of rebates are passed through to the patient who is paying a higher drug cost, because the rebates are added to the price of the drug? Is it zero?
▶ 2:49:23You don't even know that you're not giving these patients back a rebate for paying higher drug prices. Next, the pbms passed supposedly rebates to the health plans. However, the health plans are told 100% of the rebates negotiated by its pbm are then returned to the plan as savings.
▶ 2:49:44They often aren't told anything about the pbm, gpo subsidiaries, which collect a whole different set of fees from the drug maker in exchange for formulary management. So a health plan might be getting 100% of the rebates the pbm received, but the plan has no idea if the rebate got everything the gpo earned or how much money the gpo may have kept.
▶ 2:50:02It begs the question are pbms gpos just a cover for the big three to say in a contract that they pass through 100% of the rebates they get, and also a way to keep anyone else from being able to fully access brand drugs? Mr. joyner, on average, in the commercial market, what percentage of manufacturer rebates and fees negotiated through your pbm are retained by your gpo, or are they going to other subsidiaries or offshore?
▶ 2:50:30>> yes, congresswoman, we we pass through 99.9% of rebates to to our customers and feel really strongly about the strength of our purchasing arm. In fact, if you look at the the branded products that we're. >> going to reclaim my time. Mr. cordani, how many of the your gpo ascent health is headquartered? Why is it headquartered outside the united states, and do you pay taxes on fees in america? >> uh, our gpo is headquartered in switzerland. We're a global company. Um, so we leverage our global infrastructure for that.
▶ 2:51:02>> thank you. And before I yield my time, why isn't this a violation of stark? As a physician, I cannot do what you all have done with pbms. With that, I yield. >> gentlelady yields. Now, recognize the gentlelady from massachusetts, miss trahan, for five minutes of questioning. >> thank you, Mr. chair. I'd like all of my colleagues I hear from people across my district who are exhausted by having to make impossible financial decisions about their health care. While a handful of massive corporations post record profits and their top executives take home record pay.
▶ 2:51:32You know, republicans have destabilized hospitals and families with their biggest health care cut in american history and their failure to extend the aca tax credits with no alternative plan to bring costs down. At the same time, the private insurance market itself has become deeply consolidated, and that consolidation is a major reason costs remain so high.
▶ 2:51:53You're sitting before us or the executives from four companies that together control about 50% of the commercial insurance market, not exactly a depiction of a healthy competitive system. It's a system of haves and have nots where market power is concentrated, competition is weakened, independent providers are squeezed out, and families are forced to pay more.
▶ 2:52:17The lack of real checks and balances is bad for patients, it's bad for innovation, and it's bad for affordability. And to show what this level of consolidation looks like and maybe a more familiar context, because your business deeply complicated. Let's just step outside of healthcare for a moment.
▶ 2:52:36Imagine if in the auto market, one dominant, dominant company didn't just sell car insurance, but they also owned the dealerships, controlled all the repair shops, and ran the claim system, meaning one company would be selling the car, steering the repairs, and setting the price at every step. Independent shops would struggle to survive, consumer choice would shrink, innovation would be stifled. And basic economics tells us that prices would rise, not fall.
▶ 2:53:03Yet in health care, we've allowed insurance to buy up doctors, pharmacies and critical infrastructure and build exactly this kind of vertically integrated ecosystem. If one car company sold the insurance, owned the dealerships, controlled the repair shops and ran the claim system, regulators would immediately worry about steering self-dealing and higher prices. So I'll I'll just kind of throw it out into the ether.
▶ 2:53:29Can anyone on this panel explain why consumers should believe health care is the one industry where this kind of corporate structure lowers costs, instead of raising them? You know, I pose this question. It's a tough one, and it's obviously volunteered, uh, because peer reviewed research consistently shows that provider consolidation drives higher prices, especially for commercially insured patients.
▶ 2:53:58And those higher prices show up as higher premiums, higher deductibles, higher out of pocket costs, and higher overall spending. When insurer owns the provider it pays, it can set internal reimbursement rates instead of negotiating in a competitive market. And that kind of consolidation has been shown to raise prices for the same services.
▶ 2:54:18Now, unitedhealthcare is the country's largest private insurer and owns roughly 90,000 doctors through optum, meaning a growing share of premium dollars are circulating inside the same company. Instead of lowering premiums or providing rebates to patients. Mr.
▶ 2:54:37Helmsley is my colleague from pennsylvania, mentioned unitedhealth determines the reimbursement rates paid to optum owned physician groups, and those rates that you set are inside the same corporate family, hidden from regulators, hidden from competitors, patients, us. So Mr.
▶ 2:54:52Helmsley, when united owns the insurer, the doctors, the pharmacy benefit managers and the care delivery system end to end, where exactly is the competitive pressure supposed to come from to keep prices down? >> um, the thank you for the question.
▶ 2:55:11I think it's important area to clarify the the structure of that is in response to the marketplace to actually drive more value and drive cost down by integrating and allowing these elements of health care services to actually serve the consumer better.
▶ 2:55:29There is a great deal of oversight and regulation on the establishment of pricing, uh, within, uh, an organization like ours, the, uh, all the sponsors have benefits, uh, evaluate and can look at those prices, prices.
▶ 2:55:47>> I so respectfully, uh, the claim that competitive pressure, uh, is keeping pricing down or that regulation is keeping down is undermined by the fact that the department of justice is actively investigating unitedhealth on over how its physicians and insurance divisions interact, including interviewing former optum doctors. The bottom line is this when the same companies control the insurance, the doctors and delivery of care, competition just breaks down and families pay more.
▶ 2:56:16What's clear right now is that this system is working very well for corporate profits. But this committee has a responsibility to fix a system that today isn't working for patients. Thank you. I yield back. >> gentlelady yields back. Now, recognize the gentleman from california? Mr. obernolte for his five minutes of questioning.
▶ 2:56:39So we're having a discussion today about why health insurance costs so much and how we can better allocate ratepayer dollars to health care costs. Mr. markovich, I was pretty astonished last year when I heard that blue shield had contributed half $1 million to a committee supporting the passage of prop 50 in california.
▶ 2:57:02Prop 50 is everyone in this room knows, uh, was an effort to shift five congressional seats from republican to democrat control. It's pretty transparent. Uh, partizan undertaking that passed. Uh, reasonable minds can disagree whether or not that's something that should have been supported. I myself feel like mid-cycle redistricting erodes voters trust in our elections and our democracy. I oppose doing it in texas. I oppose doing it in california.
▶ 2:57:30Uh, reasonable minds can have a discussion about that. But I was just astonished that a health insurance company would wade into a political debate in such an enormous way. Why on earth did you do that? >> well, respectfully, congressman, we didn't do that what we did, we have a long history of blue shield of california is contributing to candidates from both parties at the federal and state level, including governor schwarzenegger, brown and newsom.
▶ 2:57:58And we try to support candidates that we think will be thoughtful about health care policy and this contribution to a fund that did not have a specified purpose is something we committed to as a part of that. After that contribution had happened, the governor then, uh, purposed those funds for proposition 50, and our plan did not take a position on it. >> okay. To be clear, though, these were two different checks for a quarter million dollars each to a ballot measure committee, not a candidate.
▶ 2:58:27I mean, we understand supporting candidates, but this was to support a ballot measure. So if not prop 50, what ballot measure did you think you were supporting? >> well, we we didn't know. Neither we nor the other health care companies. >> you wrote a half $1 million check, not knowing what ballot measure you were supporting. >> we and other companies, including other health care companies, all contributed to this account.
▶ 2:58:53And it's not uncommon, particularly in california, with lots of propositions where candidates would prefer contributions to these types of accounts as opposed to direct contributions to their campaign support. >> well, now, now, knowing what you know, do you regret having made that contribution, knowing that this was the only prop 50 was the only proposition that this committee supported? Well. >> we we did not support or oppose proposition 50. We didn't take a position on that.
▶ 2:59:21So, um, you know, it's a decision we consciously made going in, as did others and just didn't have control over where it went afterwards. >> all right. Well, let me you and your testimony, uh, said that you think that the health of our health care system needs some tough love. Uh, respectfully, I'd like to offer you some.
▶ 2:59:39When a health insurance company wades into such an obviously political topic like that, it not only, uh, erodes your ability to work with folks on the other side of an issue, but also erodes consumers trust in the system as a whole. So please don't do that again. Um, Mr. helmsley, uh, I represent a very rural section of california, and one of the biggest problems we have is access to health care.
▶ 3:00:05So we are grateful to have critical access hospitals that are in most of the communities that I represent. But we're having an increasing problem with, uh, medicare advantage plans, like the ones that you provide, where the critical access hospitals are no longer recognized as being in-network, and my constituents are forced to drive long distances to get the health care they need.
▶ 3:00:27And now I understand that, uh, keeping costs down is something that is often in tension with, uh, with contracting with these hospitals. But, uh, let me also suggest that that when people have to drive hours and hours to get access to basic health care, some of them just won't do it. And, uh, that denial of health care turns out to have much larger costs in the long term for our entire system. Uh, what can we do to improve that?
▶ 3:00:56And why are those decisions being made? Uh, microphone, please. >> thank you for the question, congressman. Um, there's a meaningful pressure in the medicare advantage space. Uh, given the funding actions taken in previous administration and has put a great deal of pressure in terms of what can be served. Um, we are very interested and dedicated to the rural health care and, uh, adequacy there.
▶ 3:01:25I will look into the situation that you describe. Um, but we are also advancing initiatives to see if we can get rural care, um, resources paid more effectively and more currently. So we have four pilots in the market that are expediting payment and trying to cut the payment time frames in half. Um, and those are. >> we're out of time here. But these critical access hospitals are going to close if this trend is continued. That's not good for you.
▶ 3:01:55And it's not good for, uh, the constituents that rely on them. >> we appreciate. >> that gentleman yields back. >> uh. >> and we're in a dilemma. All of our witnesses have to be at another hearing in just a little bit. So unfortunately, we're going to have to roll back the question time for members to three minutes subsequent to the questioning by miss ocasio-cortez, who is now recognized for five minutes. >> thank you so much, Mr. chairman, and apologies if we have to move quickly here due to the time.
▶ 3:02:25Um, thank you to all of our witnesses for coming here today. Uh, Mr. joyner, you are the ceo of cvs health, correct? >> correct. >> and, um, I actually don't know how many americans know this, but cvs health owns aetna, the health insurance company. Correct? >> correct. >> and cvs, which owns aetna, also owns oak street health medical clinics, correct?
▶ 3:02:55>> yes it does. >> and in addition to that, they own, of course, cvs pharmacies and cvs health. Um, also owns cvs caremark, the pharmacy benefit manager, which helps negotiate some of these rebates and prescription prices. Correct? >> that's correct. >> and cvs caremark, um, processes nearly 30% of all prescriptions in a given year.
▶ 3:03:24And so in other words, cvs caremark helps determine the prices that patients pay for a third of all prescriptions in the us. In fact, um, I was following one of cvs's recent or one of cvs's investor calls where, um, where they really laid out quite clearly what this means. If you are a patient, this is what's known as a captive strategy.
▶ 3:03:49And cvs in the investor call used the example themselves of a patient known as kate. Kate has an aetna health insurance plan. Um, right here and which is owned by cvs health. She then goes to a cvs pharmacy. She's connected to an oak street health medical clinic. She sees a doctor at oak street health who prescribes her medication. And then she goes to fill that prescription at cvs pharmacy.
▶ 3:04:16So the price kate pays for that medication is dictated by aetna, cvs caremark. And they also own the drug manufacturer cordova's. Um Mr. joyner this is quite a bit of market concentration wouldn't you agree. >> um no I wouldn't agree that it's market concentration. I would suggest it's a model that works really well for the consumer. >> yeah. Um, it I think it works very well for cvs.
▶ 3:04:44I think, in fact, you all said on the call that a fully you all call it a fully engaged member. It's great marketing. They're fully engaged. Member unlocks sizable value for payers and cvs health. Um, so the health insurance gets a cut. The pharmacy benefit manager gets a cut, the drug manufacturer gets a cut, and the patient gets screwed.
▶ 3:05:09Um, I think the federal trade commission has also found that health care conglomerates like cvs health charge more for medications filled at their pharmacies. We're talking about thousand percent markups on medications for cancer and hiv.
▶ 3:05:26And, you know, I think this is actually an interesting point of, um, of common ground that I may have with some of our republican colleagues here in this hearing, because whether you're a blue blooded capitalist or a card carrying democratic socialist, I think corporate monopolies are a problem. And this vertical integration is destroying people's ability to access care.
▶ 3:05:54You know, I don't think, um, we're seeing this across the board. And if they can self deal, you know, I saw something that was interesting from the opening statement of Mr. hemsley hemsley from unitedhealth, talking about how much united spends. Was it 85% on care, Mr. hemsley approaching 90%.
▶ 3:06:16But the aca forces you all to spend a decent amount of that on subsidies, on care. But when you own the care, when the insurer owns the pharmacy, owns the pbm, owns the drug manufacturer, you also own the health care cost, you own a big chunk of the health care cost.
▶ 3:06:39And so, you know, 100 years ago, we had this type of market concentration in our banks, and we did something about it when it crashed the economy. And we passed the glass-steagall act. We should be considering that in our health care system.
▶ 3:06:54And if we believe in competition, I think we should put our votes and our legislation in alignment with that and consider breaking up this industry in order to allow the competition that that, um, prevents this kind of vertical integration and abuse of power. And with that, I yield back. >> gentlelady yields back. Now, recognize the gentleman from oregon, Mr. bentz, for three minutes of questioning. Sorry.
▶ 3:07:25>> that's that's fine, Mr. chair. Thank you. Thank all of you for being here. I'm going to follow doctor joyce in asking that each of you produce certain documents. But, um, I'm really interested in the float. And that, of course, is what leads to people calling insurers, banks doing a side business as health care. Because of course, you charge the premium, you collect the money, you put the money in the bank, it earns interest, and then you pay it out.
▶ 3:07:50And so the float, um, is of extraordinary interest to those of us that support hsas, because a health savings account means that instead of paying the premium to you, the theory is the person with the account earns the money. Uh, starting with you, Mr. hemsley. Is that true? If hsas were put into place, would would the patients actually be earning the money instead of the insurance company? Uh. Your microphone. Yes. >> sorry. Thank you for the question, representative.
▶ 3:08:20I don't know if I understand the question, but we maintain. >> well, let's go. Let's go back is simple enough. If hsas were put in place and people could put their money into the hsa and have it earn interest for them, instead of paying it to you as a premium, and they would wait until I guess they had the problem or the deductible to pay, would they be earning the money instead of you? That's the question. >> um, they earn interest rates in their hsa accounts. >> maybe.
▶ 3:08:45Maybe a better way of asking this is shifting over to how much money and insurance company makes by denying a claim. So what I was doing up here is, as I was waiting for my turn to ask these questions, I was trying to determine how much money insurance companies would make while they delayed in making a payment on a claim that ultimately is approved. And I found it here. But in order to put it in proper perspective, one has to know how big the company is and what the total denied claims amount to. So I was looking at you because you unfortunately are first for you.
▶ 3:09:15The total denied pool was 19% and 19% denial rate, which amounted to about $50 billion of your total income. How much interest did you earn on that? And I'm going to ask you don't have to answer now. I would I'm going to ask that each one of you, though, answer that for me and for the committee. So please respond in writing, how much money is made during the period of time that the delay is occurring on claims that are ultimately approved? That's what I want to see.
▶ 3:09:45So maybe because it's obvious, the argument that if you deny a claim, you get to earn money on the denied amount that you don't pay until you finally do have to pay it out. Now, you can argue about all the stuff you've gone through. When I was going through some of that here, um, in this case, I recognize those justifications. I want to see the amount. And that's what we're going to start with that, Mr. chair. I'll yield back. >> gentleman yields back. Now, recognize the gentleman from massachusetts, Mr. jake auchincloss, for his three minutes of questioning.
▶ 3:10:15>> this week? Looks like the house of representatives is going to pass pbm reform finally. Uh, which is good news for patients, but it seems to me that, uh, the big three health insurance corporations, knowing that pbm reform is around the corner, uh, needed a different way to retain profits while still, um, on paper, complying with new requirements in the coming requirements of pbm reform.
▶ 3:10:37And so they formed these group purchasing organizations overseas in ireland and switzerland in particular, um, that have since been exhaustively investigated. And I'll enter into the record chair, uh, that investigation. >> date of the article. >> uh, january 6th. >> is that objection of this year? Yes. Without objection. So ordered. >> now, this investigation found many, many things.
▶ 3:11:00But of note, particularly for unitedhealth, uh, gpo, msr that although it had no website, no email, no phone number available at the time of the investigation, um, it was described as negotiating rebate agreements with pharmaceutical manufacturers, um, and was also bringing in tens of millions of dollars per employee. So what is going on over there? Um, Mr. helmsley, how many people does msr employ? Mike, please.
▶ 3:11:35Microphone, please. >> I'm sorry. Um, I don't have the specific answer, but several thousand. >> several thousand. And is the number of covered lies that msr covers different than the number. >> but I believe they, um, serve other health plans and have a different. Um. >> that number is important though, sir, because if your gpo is not serving more covered lives, and how is it possibly aggregating purchasing power any more than the existing pbm?
▶ 3:12:04We're going to follow up with questions on the record, because these gpos are an attempt to circumvent congressional authority over pbm reform, and they are ultimately going to be a source of profit to the detriment of patients co-pays. Um, Mr. helmsley, sir, I want to pivot, actually, from policy to to the personal, though, um, you and your, your company and your colleagues suffered a horrendous loss last year.
▶ 3:12:26And the reaction on social media to the murder of brian thompson was a shameful moment for this country, um, particularly for his sons, who don't deserve that. Would you like to state into the congressional record, which will last forever, unlike those social media posts? What kind of man Mr. thompson was? Sure. >> yeah. Thank you for the, um, for that opportunity.
▶ 3:12:48Um, I think we can all disagree on many things, but I think one thing we can agree on is that violence or the threat of violence is not appropriate in any circumstances. Brian thompson was a force for good. He was, uh, creative and effective, uh, man, in terms of trying to address many of the challenges that have been presented today. And, um, uh, we miss him dearly.
▶ 3:13:16And, uh, I appreciate the opportunity to to recognize him. And, uh, he left two, uh, very fine men behind as, uh, his children and a wife and a family. And I think that as we bring things down to what is real and many of the conversations today, um, I appreciate you recognizing and giving an opportunity for that. >> gentleman yields back yield. Now, recognize the gentleman from ohio, Mr.
▶ 3:13:45Balderson, for his three minutes of questioning. >> I got that memo, Mr. chairman. >> thank you very much. >> uh, thank you all for being here. And since we are in three minutes, um, my first question is going to go to Mr. boudreaux. Thank you for being here, ma'am. Um, cms internal data shows that in 2021, the average percentage of enrollments in the aca market without any medical claims was 19%.
▶ 3:14:09That percentage jumped to 35% in 2024. I believe this was largely due to the enhanced covid premium tax credits under the biden administration. Congressional democrats approved billions of taxpayer dollars that went to your company with very little oversight. This lack of transparency and oversight led to rampant fraud and waste.
▶ 3:14:35What I find interesting is that the waste over the past several years seems to have been a much bigger issue in federal exchange than the state based exchanges, yes or no? Did your company see evidence of increased waste, fraud and abuse since congressional democrats enacted the temporary covid credits? >> thank you for the question, congressman. What we saw, um, again, we have real concerns similar to you. We share the concern about fraud, waste and abuse.
▶ 3:15:04Um, and our enrollment comes directly from the federal and state exchanges. And it was, um, you know, the enrollment there we think was about 15%, not the 30% you're showing. >> okay. And why was this waste more pronounced at the federal exchange than the state based exchanges? >> again, we saw, um, as we looked at that, we worked very closely with the state exchanges. Um, but we did see some consistency between the federal and state.
▶ 3:15:32But again, we're incredibly focused and share your concern about fraud, waste and abuse and support many of the guardrails in the marketplace program, uh, around authentication of enrollment, um, doing that in a much more significant way. And we also support continuous enrollment because we think that allows for a healthy population. >> okay. Um, what are you seeing in the marketplace that makes stronger protections necessary? >> so there's a couple of opportunities.
▶ 3:16:01We believe one is verifying eligibility, um, ensuring that those who are eligible for the premium subsidies, uh, we can do that with two factor eligibility. Uh, again, um, only having special enrollment periods, um, really limiting those because, again, what makes a stable, um, exchange marketplace is continuous coverage policies that support that.
▶ 3:16:23We also believe that coverage and being able to have preventative services over the long haul really supports individuals in the exchange and helps us to manage health care costs. >> do you support legislation to strengthen the patient validation protocols? >> um, unfortunately, sir, I'm not sure I know exactly what that legislation is. Um. >> well, we haven't done anything yet. I'm just asking if you would support that, so. Okay. Uh, thank you very much I yield back. >> gentleman yields back.
▶ 3:16:51Now, recognize, uh, the gentleman from louisiana, Mr. carter, for his three minutes of questioning. >> thank you, Mr. chairman. We've heard in the lead up to this hearing again and again that my colleagues, if nothing more than in their action, have indicated that it's okay for 24 million americans to see their health care premiums increase by 2 or 3 or even four times. Uh, the defense of this is, and I'll quote one of my colleagues is saying those 24 million people are just 7% of americans.
▶ 3:17:21I suspect if you're one of the 24 million people experiencing skyrocketing health care costs, uh, even financial ruin, that rhetoric doesn't really resonate with you. The people in my home district of louisiana are, in many cases, hardest hit. Um, Mr. hemsley, can you share with me?
▶ 3:17:40Uh, there's a issue with this notion of step therapy where a patient is forced to use a medication that may be a generic or may be something else that's used similarly, even though their physician has indicated they don't think that that's the best medicine for them.
▶ 3:18:03Should a licensed physician who knows the patient be trusted over an insurance algorithm when determining the most appropriate treatment, instead of forcing patients through a step therapy requirement that delays care and oftentimes increases suffering and even cost. >> um, no. I think there are appropriate, uh, times for step therapy. But in the situation you describe, I would not.
▶ 3:18:34>> and Mr. josh harder. >> yeah, I agree, step therapy is an opportunity, um, for one to introduce a savings opportunity for the consumer and member as well. >> but respectfully, oftentimes it's not a savings. It's a nuisance because the physician is saying this doesn't work for my patient. Patient goes to the pharmacy. And so you can't get this because the insurance company won't approve it because you haven't tried this. And the patient says, but I have tried it, it doesn't work.
▶ 3:19:04There are horrible side effects. But now I've paid a 30 or 60 day, 90 day copay for it, and they won't let me do it again. Isn't that unfair to a patient whose doctor? Not an algorithm, but whose doctor has stated that this medicine doesn't work?
▶ 3:19:24Yeah, these are the kind of things that we hear from our constituents who are caught in the middle trying to get a medication to assist him with their ailment, but only being caught up in the confines or the clutches of bureaucracy within the health care. >> yeah, we can. We completely agree with you, congressman. In fact, if they've tried and failed, that's exactly what where we want to engage and where we want to work with the provider on the appropriate therapy.
▶ 3:19:50>> so is it fair from all of the companies that have seven seconds, fair from all the companies that you agree that this is an issue and that you will commit to working with us to to be that buffer for the patients so they're not caught up in a forced step therapy when the medicines don't work to overrule their physicians, but to listen to them. Is that a yes? Thank you. >> I'm seeing yeses from everybody and I appreciate those questions. I now look to recognize the gentleman from ohio, Mr. rowley, for his three minutes of questioning. >> thank you, Mr. chair.
▶ 3:20:17And I want to take a moment, and I want to thank our congressman. I'm not sure if I can say his name for, uh, calling out with brian thompson. He's always been in our prayers. And I think lowering the temperature and bringing things to a normal society is where we need to go, and there's definitely problems, and we're going to work on them.
▶ 3:20:38So with that said, house republicans, by passing the big, beautiful bill and lower health care premiums for all americans act have made it clear that it's a serious about lowering health care costs and expanding choice and improving the quality of care for all americans. At a time when americans are facing the highest health care costs in years, it is important more than ever to continue to bring down these costs. Passage of the aca left ohioans with less health care insurance and options and skyrocketing premiums. So I want to take a different approach.
▶ 3:21:08When I was in the ohio senate, I had this question for years, and I'm going to bring it to you right now to all the witnesses. Do you believe that competition and free market leads to affordability? What I mean by this is under the aca, patients are not allowed to shop their premiums across state lines. Patients who live near state borders cannot shop their plan for the best possible price on these plans. In my opinion, that could bring down the cost.
▶ 3:21:37What changes can congress make to potentially allow interstate competition and increase the variety of plan options that patients can choose from? Anyone on the panel is welcome to answer. >> um, we endorse all kinds of ideas and be open minded about, um, anything that could get bipartisan support, um, for increasing, uh, access, um, reducing costs, making healthcare more affordable.
▶ 3:22:06If that was on that idea, was part of that, we could be for it. >> is it as a general principle, competition is good. What can get troubling or challenging for health plans is there is a lot of state regulations around health insurance. And so if they're different from one plan to another because they're based in a different state, that can create a just a challenging environment to to have apples to apples comparisons, uh, in terms of, of shopping for customers.
▶ 3:22:35But overall, if you can increase choice and increase competition, that's a good thing. >> do you think that by us excreting this from the aca that would help? Or do you think like a freestanding bill to address this, where we could have interstate competition? >> congressman, I'd be happy to work with you on it. I don't I'm not trying to, uh, I know the time is limited.
▶ 3:22:55It's a fairly complex question to make sure that you're doing what you're intending to do, which is increase competition and consumer choice without creating, um, an environment in which it's misleading for consumers because what they're buying from one plan versus another is very different in terms of their coverage. And that that could be an unintended consequence if it's not shaped the right way. >> I would love those conversations if possible. >> gentleman yields back. Now recognize the gentlelady from texas, Mrs. fletcher, for her three minutes of questioning. >> thank you, chairman griffith.
▶ 3:23:25And thank you to all of our witnesses for being here today. I think we can all agree that we should be working to lower health care costs for all americans, and I have heard from many of my constituents in houston about the same problems that my colleagues have talked about today, in particular, prior authorization, uh, which leads to delays in cares, in care, and about the incredible burden of the back and forth between providers.
▶ 3:23:47Uh, I represent so many physicians who come to me, tell me they are not able to give their patients the care that they need because of the amount of time that they spend and their staff spend on the phone fighting with insurance companies. These are huge issues that we absolutely have to address. I also think with the limited time that we have, congress hasn't helped yet either this year.
▶ 3:24:09Instead, this congress has voted to decimate our health care system and raise costs for all americans by cutting medicaid funding and eliminating the enhanced premium tax credits that we've been talking about under the affordable care act. Mr. carter just touched on this, and chairman guthrie made an important point earlier that not everybody participates in an aca plan. But I think what we haven't heard as much of today, um, is that this entire system is an ecosystem.
▶ 3:24:34And so all of the costs that cuts to medicaid, the cuts to the aca, premium tax credits, removing people from the risk pool will mean that everybody else's costs are going to go up. That is a core principle of insurance, right? You get more people into the pool. This was the idea of the aca. Get more people and you can bring costs down. Um, so I think that that's something that we need to understand here is we're making policy going forward.
▶ 3:25:01And because, gosh, this is really limited time, I just want to go straight to the republicans have proposed, I think, two new things today. One of them is that, um, they're suggesting, uh, putting money into hsas. So I want to ask each of the, of the insurance industry witnesses here, um, yes or no. Can hsas be used by individuals to pay their health insurance premiums? I'll start with you, Mr. helmsley.
▶ 3:25:27Can you turn on your microphone, please? >> um, if that was part of a bipartisan solution. >> but today, can you use hsa funds to pay for your premium? No. Okay, Mr. joiner. >> no. >> Mrs. boudreaux. >> there's no single solution. Hsas would need to be expanded. But we do think there's an opportunity. >> thank you, Mrs. boudreaux. Mr. >> structurally, no. But employers are able to use hsas to complement catastrophic coverages effectively.
▶ 3:25:57And perhaps we can learn from the employer market. >> Mr. markovic. >> current law. No. >> okay. And that's the key. Under current law, this isn't a solution to just use the hsas. The other question I have in general, um, well, we've got 15 seconds. So I'm just going to submit some more questions for the record. Um, but I thank you for your testimony today, and I'll yield back. >> gentlelady yields back. Now, recognize the gentleman from new york, Mr. langworthy, for his three minutes of questioning? >> thank you very. >> much, Mr. chairman.
▶ 3:26:26>> and I'll kind of cut right to the chase. I mean, this is my first term on the energy and commerce committee. I've had an awful lot of health care meetings, and some of you have been by the office, but at the I ask every stakeholder that comes, why is health care increasing so drastically compared to other facets of the economy? Who is at fault and the amount of finger pointing? But you know, if the hospitals are there, it's the insurance companies. If it's the insurance companies, it's because of pharma.
▶ 3:26:55If it's pharma, it's because of the insurance companies. And we need to get to the bottom of why premiums have exploded on americans over the last ten years in, in more drastically in the last two, in what is driving these costs, in what I think is important for us to be aware of, is what is each of your dedication to the bottom line with the the bottom line cost to the taxpayer, to the consumer?
▶ 3:27:22Because, I mean, we are obviously shoveling trillions of dollars at the health care system in america, yet prices are exploding. Now, some of my colleagues want the government just to pay for this for everyone. And that's what they think. Uh, is the best ultimate solution. You heard several mentioned that, uh, I believe in in the american health care system. It is a is a free market system because I think it leads the way in innovation to get us the best outcome. So, um, Mr.
▶ 3:27:47Helmsley, what is united health care specifically not generally doing right now to lower premiums for its its customers? >> thank you, representative, for the question. We are intensely focused on, uh, managing costs. Um. >> we're going to need to keep these answers short. I mean, is there a specific action that you.
▶ 3:28:10>> take care using data and insights, um, and value based care as the key to change the whole direction of health care towards a value based outcome system and less towards a volume based system. >> okay, Mr. joyner, what is cvs specifically not generally doing to lower premiums for its customers? >> today? We believe that the single biggest issue is the health status of the population. They're aging, consuming more health care resources.
▶ 3:28:35So our focus is focus is on wellness prevention, keeping people out of the hospital, keeping people on on low cost therapies that we believe will ultimately manage the overall health costs. And like united health care, focusing on an outcomes based model with the provider. So we're working collaboratively and introducing technology to help bring the consumer into the process. >> thank you. Congressman. We have two core strategies. One, in our company reduced overall health care costs and simplify the system.
▶ 3:29:04I'd offer three practical things. One is as we've shared, improve and streamline the prior authorization process to take complexity out of the system for members and care providers. Second, investing in fraud, waste, and abuse to take unnecessary costs and make the premiums go to the right things. And the last thing is, I share with my colleagues continuing to invest in paying for value and outcomes to make people healthier. >> okay, my time is expired, so I will yield back. And if the rest could respond and right.
▶ 3:29:34>> gentleman is yielded back and now recognize, uh, Mr. veasey from texas for his 5 minute or 3 minutes. Excuse me. >> thank you. Sir. Um, I want to talk about vaccines, particularly because I think that, uh, republicans and the secretary, secretary kennedy, is undermining vaccines in this country, uh, my home state of texas, or we're at the epicenter of a historic measles outbreak, uh, where we've seen 2000 americans, uh, and two texas kids that have been
▶ 3:30:04Killed unnecessarily and measles, uh, which were previously eradicated, is one of the most deadly diseases. Uh, but there is a safe and effective vaccine for that. And I think that we all know that, uh, meanwhile, 15 children have died during this flu season, and 90% of them were unvaccinated. So it's not theoretical. Uh, for decades, insurers have covered vaccines based on the recommendations of independent medical experts.
▶ 3:30:29Uh, those recommendations have literally saved the lives of 1 million americans since 1994. And despite this fact, secretary kennedy has injected this pseudoscience, uh, into federal vaccine policy and weakened the childhood immunization schedule. The secretary says he wants to make america healthy again, but all he's doing is bringing measles back again. His actions have abandoned decades of hard scientific evidence and put children's lives directly at risk.
▶ 3:30:58And so I want to ask this, and I would just like to go down the line to each one of you, and we'll start here. And I'm on my right here. Uh. Yes or no? Uh, as a ceo, do you commit to covering acip ensured vaccines on the immunization schedule prior to secretary kennedy's reckless changes for plan year 2026?
▶ 3:31:21And and for what reason is your decision making that if everybody could just go down the line, yes or no, do you plan on. So we don't have a lot of time if we just give you a yes or no. >> our coverages are comprehensive and supported by the same authorities you referenced. And then we allow the consumer to make a choice, um, as to how they want to proceed. So we provide comprehensive coverage. And then it's between the doctor. >> and so you're still going to be covering. >> yes we are. >> okay. >> um, congressman no change to our policy. We will continue.
▶ 3:31:52>> congressman, we cover vaccines. If you haven't changed our policy, um, our vaccines, we do it as required by law. But we also look at acip as well as clinical societies. And that's how we make our decisions. >> our comprehensive coverage remains intact. And it's largely $0 cost to our customers and the employer market. >> yes, it's the consensus of the medical community that they're safe and effective. And so we continue to cover them. Thank you. >> um, well, first of all, let me just say thank you.
▶ 3:32:20We really appreciate that you're following the science behind all of this. Uh, and I'm glad that we can agree that, um, that children's lives are more important than politics. Uh, and again, not only are you following the science, I mean, you're following common sense. This stuff has been researched, uh, and it's been a part of american life and has made us safer for a reason. So thank you for your commitment. >> I yield back, and I recognize the gentlelady from florida, miss carmack, for three minutes. >> thank you, Mr. chairman.
▶ 3:32:46You know, over and over I hear the same question from people back home. Why in the heck am I paying for insurance if it actually doesn't cover anything? And this is across all plans and companies. So to be clear, I'm not just talking about the obamacare, which has dominated much of the conversation today. Only roughly, you know, 20 million people are covered there. But what I'm talking about are the 160 million americans who get their coverage through employer sponsored insurance. And that's where so many of the affordability challenges are showing up every single day.
▶ 3:33:17And these families are rarely talked about. They haven't been talked about much today. And so I want to address their concerns that they have sent to me, um, across social media, emails, text messages, thousands and thousands of messages we have collected over the last 72 hours. And there is a very troubling theme. One, they think that you guys showing up here today will change nothing.
▶ 3:33:38So on behalf of the thousands and thousands hell america, millions of americans, please take this hearing as a moment in time when you need to change direction. I'm going to make this very simple for people watching back home. I'm going to ask a series of questions. And if this statement applies to your company, please raise your hand.
▶ 3:33:58So if your executive compensation at your company, including yours, is primarily tied to financial performance like revenue margins, earnings or stock price, please raise your hand. Don't be shy. Okay I see three out of four. Three out of five. Okay.
▶ 3:34:16Um, raise your hand if your compensation is directly tied to patient health outcomes, such as preventing harm from delays, reducing inappropriate denials, or ensuring access to care. The majority of your compensation is tied directly to patient outcome.
▶ 3:34:37I'm going to submit for the record right now a request that you, in writing, give us the fine print of your contracts displaying where patient outcome is directly tied to your executive compensation. Raise your hand if an executive at your company takes a financial penalty when a patient is harmed due to an insurer caused delay or wrongful denial.
▶ 3:34:59Okay, no hands, so no one at the company bears any responsibility for denial of care or patient outcomes. Raise your hand if an overturned denial or appeal negatively impacts executive compensation at your company. Not one. That right there is the problem.
▶ 3:35:22When denials and delays and appeals, which happen every single day, occur, the patient and their families are the ones that get hurt, not your bottom line. I also heard very briefly from our colleague, um, that hsas currently cannot pay premiums for plans.
▶ 3:35:41Good news is that there's a legislation called the access act, which would allow for hsas to expand and use that subsidy to pay for those premiums. So I look forward to working with her on this legislation, and I see my time has expired. With that, I yield. >> to the gentlelady yields back. And I now recognize the gentlelady from illinois, miss kelly, for her three minutes of questioning. >> thank you, chair and ranking member degette for holding today's hearing.
▶ 3:36:08There is a health care affordability crisis in this country under president trump. Republican led cuts to medicaid will drive the uninsured rate up by roughly 50% over the next decade. At the same time, the refusal to extend aca tax credits, or more than double monthly premiums for millions of americans. You've heard all this already. The result is simple people will delay care or go without entirely because they cannot afford coverage. As our witnesses said, these are people's lives we're talking about.
▶ 3:36:38As some of the largest health insurance administrators in the nation, you have real influence over federal policy and industry outcomes. The ask has been clear, and your responses have not met the moment for all ceos. Back in november, one of my constituents, mercedes wells, had a traumatic birth in her car after being discharged from the hospital while in active labor. In response, I announced a new maternal health bill, the wells act.
▶ 3:37:03I also sent letters to many of you asking about your commitment to maternal health. We have a maternal health crisis in this country, and evidence shows that doulas lead to better health care for pregnant women. So I ask all of you, raise your hand if your company has a standard policy to explicitly cover doulas for their services during and after pregnancy. For the majority of your plans. All but one. Thank you, Mr. hemsley.
▶ 3:37:30Earlier, you admitted to my colleague that your company uses technology in a number of initiatives. Over the last five years, there's been an alarming increase in reports of inappropriate ai, prior authorization denials by your company. One study in 2024 found that these ai denials had a 90% error rate. If a health care provider had this bad of an error rate, they would lose their license and be in jail.
▶ 3:37:58Does united use ai or algorithmic tools to adjudicate claims or pretreatment estimates? And what governance and independent auditing do you use to prevent systemic underpayment or inappropriate denials? I'm sorry, we can't. >> yes. Thank you for the question. We use ai solely for administrative purposes. We do not use it for clinical applications at all. >> so it has nothing to do with denials. >> only from an administrative gathering, documents, things like that. Only administrative.
▶ 3:38:30>> will you pledge that each determination will be reviewed or I don't know how you do it by an outside, neutral practicing physician who is licensed in the same specialty as the care in question. >> um, I'm not sure I understand the what you're asking. >> I guess I'm questioning why people are denied and you're saying it's not by ai, so who determines how people are denied?
▶ 3:38:57>> um, we have, uh, clinical policies broadly accepted and, uh, promulgated by the, uh, um, uh, care community, the academies and colleges. >> so not physicians in the field or. Yes, yes. >> or no physicians oversee our clinical use. >> I'm sorry. >> we didn't have time limit. I'd let you go. Uh, recognize the gentleman from texas, Mr. crenshaw, for three minutes. >> thank you, Mr. chairman.
▶ 3:39:24You know, since the affordable care act passed, premiums have increased 129%. That's 90% more than inflation in the ten years before the aca passed, premiums rose at about 5% per year, 69% total, which roughly tracked inflation. Something broke the system and that something is obamacare. So what happened now? The democrats who passed the aca deserve blame. They deserve a lot of blame.
▶ 3:39:53They imposed rigid mandates and regulations that made it nearly impossible to offer flexible, affordable, tailored insurance plans that crushed competition. Much of this is government's fault, but not all of it. And your testimonies. Many of you claim vertical consolidation is a major driver of rising costs, like it's outside your control. Um, but is it? Because here's the thing. Many of you here today are participants in that consolidation.
▶ 3:40:23We have insurers that own physician groups, pbms, hospitals, pharmacies, every rung of the health care ladder. And the result competition is basically nonexistent. Any counties have 1 or 2 aca plans options, if that. Your companies have narrowed networks so severely that patients are forced into the very consolidated systems that you now complain about, and the government did not force you to do that.
▶ 3:40:46So, look, congress has a responsibility here to fix a broken, broken system, to fix incentives, restore patient control and choice and competition. But you have a responsibility to also act in good faith. Premiums are way up. Profits are way up. Claim denials are way up. Which was just addressed. 1 in 5 claims denied. It's an all time high this year. Why? It's a rhetorical question because I don't have enough time. But I do want to ask one simple question.
▶ 3:41:14Wouldn't it make a lot more sense to subsidize low income patients, which is the point of the aca, right? Subsidize low income patients directly through a health savings account that that they own? Instead of subsidizing you, the insurance companies? You can answer that one. Anybody? Does anybody agree with that? That concept subsidize patients through through a health savings account instead of subsidizing insurance companies? Even our patient advocate. >> sorry. >> go ahead. >> I don't want to. Did you?
▶ 3:41:45Okay. Um, we're I'm I and we are very open to having mechanisms where money goes directly to. >> I got one maybe anybody else. >> um, we'd be supportive of anything that puts the consumer more in control. >> I got another maybe. And I got another. Sorry, I just. >> it. >> makes no difference. It's the cost. >> got it. Patient advocates even. >> uh, respectfully, I think that could undermine the health care system. >> interesting. Okay. No. So let me ask you again another question.
▶ 3:42:15Just econ 101 does competition. Competition requires real choice, right? It's an econ 101 question. Competition lowers prices, doesn't it? Competition will exist if patients control the money, and then can go on the market and actually make you compete with each other. >> Mr. crenshaw, would you submit that for the record, please? >> oh, well. Geez, that was fast. >> gentleman gentleman yields back. Now recognize the gentleman from ohio, Mr. landsman, for his three minutes. >> uh, thank you, Mr. chair.
▶ 3:42:44And the ranking member, all of you, for being here in my lifetime. A lot has happened, but the biggest thing is the in my mind is the extreme concentration of wealth and power. I think most of the issues that we face in this country can be connected back to this concentration of wealth and power at the top, and nowhere is that more true than healthcare. Uh, ceo pay across the board is up 1,000% since I was born.
▶ 3:43:11Workers are, you know, up 25%. They can't keep up. And as it relates to health care, you got 1 in 3 americans who are struggling with medical debt. 1 in 3 americans, uh, had to pass on a needed procedure, uh, because they couldn't afford it.
▶ 3:43:27And in the one one big, beautiful bill, uh, after decades of all of this money going up, uh, they voted on the largest transfer of wealth, uh, in american history from low income working folks to the super wealthy, uh, spending trillions of dollars on tax cuts for the super wealthy. And they cut $1 trillion in health care. So folks are sitting here wondering, you know, how is this possible?
▶ 3:43:57How do I as, as the, as a hardworking american, continue to be, uh, screwed over like this? Now, looking at the profits united over the last couple of years, it's on average around $20 billion. Uh, cvs, around $6 billion, elephants, around $6 billion. Cigna around $6 billion. You all know this is an issue. That's why unitedhealth said we're going to invest these aca profits back into our customers.
▶ 3:44:28If shareholders said tomorrow, let's do this, let's do more of this. This was a good idea. Let's invest more of our profits back into our patients. What would you tackle first? You got 2015 billion, 14 billion this year in profits. Let's say you just want to keep a couple uh, shareholders said the rest of it's going back into our patients. Would it be medical debt? Would you focus on denying less claims? Would you cover more people? I'm just curious.
▶ 3:44:57And we'll start with Mr. hemsley. What would you invest in first? >> um, thank you for the question. And I think it's very thoughtful and the same things we're investing in now, the advancement of a movement towards value based care to get off the volume, better systems and technology to take the complexity and make the system more, more simple. Um, I think those things would profoundly change the underlying costs.
▶ 3:45:27And the consumer and care provider experience. >> just, uh, I only have 12, but I would love to hear from everyone else, but I only have 10s. I want to be respectful because you guys have to go to another meeting. Uh, I we have a lot of work to do. Congress has to fix this. They have to fix the health care system so that we can invest more in patients. I think this is an opportunity for you all, and you're hearing it to do the same. Thank you I yield back. >> gentleman yields back.
▶ 3:45:53Now recognize the gentlelady from indiana miss houchen for her three minutes. >> thank you, Mr. chairman. And thanks to the witnesses. Um, today's hearing provides us an opportunity to look at beyond the premiums and examine what's happening behind the scenes, how insurers structure administrative fees, how payment practices affect employers and providers, and whether current incentives are aligned with affordability for patients or profits for insurance companies.
▶ 3:46:18Uh, there are so many perverse incentives created by the aca, I, I honestly can hardly blame you for, um, trying to find ways to increase profits. But vertical integration, I think, is something that we absolutely have to take a look at. And I'm glad this committee is doing that. As insurers have become more vertically integrated and increasingly relying on administrative entities like group purchasing organizations.
▶ 3:46:49And a reminder, uh, vertical integration is the insurance companies owning the providers, owning the hospitals, owning the pharmacies, owning the pbms, and now, uh, affiliating with group purchasing organizations. Gpos were created by the largest pbms and have added yet another layer of complexity to the prescription drug supply chain, making it even more opaque.
▶ 3:47:13Two of the three largest pbms have established their gpos overseas, which you have confirmed while continuing to claim that rebates and fees are being negotiated on behalf of us plan sponsors and patients. Evidence suggests in practice, some of these entities may be retaining rebates in the commercial market and charging additional fees that are not passed on to employers or reflected in lower out-of-pocket costs at the pharmacy counter. And with vertical integration, it makes the true profit margins easier to hide.
▶ 3:47:42In fact, a recent investigative report published by hunter brook looked into pbms gpos and found that while there were fewer than 150 employees across all three of them, pbms owned, pbm owned gpos somehow generated more than $50 million in revenue per employee. Not even nvidia generated that level of per employee revenue. Uh, so my my question is, how are pbm gpos so incredibly profitable?
▶ 3:48:12Anyone can answer, how is it so profitable to have a gpo? How are they profiting? 50 million per revenue in revenue per employee on the backs of american patients? No answers. Okay. I've also heard from another number of physicians, uh, who have reported concerns about the no surprises act and implementation of that, often delaying, uh, awarded amounts. And I want to focus quickly on health. Miss burdo compliance.
▶ 3:48:42Do you track compliance internally on those arbitration awards, and how many of those are remaining unpaid or partially unpaid? Uh, more than 30 days after a favorable decision. >> so, congresswoman, thank you for the opportunity to talk about the no surprises act. Um, we are very supportive of the no surprises act. Always have been. There's a problem, though, in the arbitration system where private equity and vc backed entities are flooding the system.
▶ 3:49:08Um, the cbo recommended that 17,000 roughly would be this year. We've received across the system almost 2.2 million arbitrations. And because of the style of arbitration, where it's basically baseball style, we are seeing awards at 429 to 450%.
▶ 3:49:27And if you would just give me one second, I think making this real for people is so important, you know, is in in this situation, los angeles is one of the areas we're seeing the highest arbitration awards. Cms for spinal surgery will pay $1,500, commercial insurance will pay $1,900. >> and ma'am, $1,000. We're pushing up against your time. And now yet another hearing. >> so please. >> please do a full explanation in your written response to Mr.
▶ 3:49:58>> chairman, I have a number of questions that I will provide to the record. Thank you for the time. >> gentlelady yields back. Now, recognize the gentleman from michigan, Mr. james, for up to three minutes. >> thank you, Mr. chairman. Uh, we were promised affordable care. What americans got was unaffordable premiums, sky high deductibles and bureaucrats standing between patients and their doctors, all while american people get sicker. I said back in 2018 that obamacare was a flawed, broken system, and I was called a fear monger.
▶ 3:50:25So let's stop arguing about intentions and talk about results. Under this system, families are punished if they stay healthy and they're financially devastated if they get sick. That's not health care. That's sick care. Since the affordable care act passed, wages are up 26%, but deductibles are up 160%. Premiums are up nearly 80%. The average family now pays around $24,000 a year for health insurance. More than many families pay for their mortgage.
▶ 3:50:56Some are paying 30 $40,000 and still rationing care. That's not a safety net. That's a hangman's noose. So let's start with a very simple question for some very smart people here. Raise your hand if you believe that health care today is affordable for the average american. No hands. So we have agreement. I believe it's unaffordable because nobody knows what they're paying for. The only way we can have affordability in this country is if we have accountability.
▶ 3:51:27And we you all must be accountable to the american people. President trump made this clear in his great health care plan. You must post your prices so patients can see them. So I'll ask you again plainly, yes or no. If you're buying a plane ticket, you know how much it costs. Yes. You know how much it costs. So why in health care do we hide our prices? You only hide things. You don't want people to know what you're doing. Will you commit?
▶ 3:51:54Will you commit to publishing clear, complete rates side by side coverage comparisons that employers and families can actually understand in the same places that you price your bills? I see one head nodding. >> we're already doing that. >> are you doing it? >> already doing that? >> it's not having the desired results. We need to do better.
▶ 3:52:22We need to stand behind the transparency data with the same seriousness that you expect patients to pay you back. The american people were promised affordable care. What you've given them is higher costs and worse health outcomes after more than a decade. Americans are a heck of a lot sicker and a heck of a lot more insured at the exact same time. How does that happen? Your incentive structures must change. You must be held accountable, and you must change course. The american people are done with it. I'm done with it. I'm speaking all my colleagues on this committee.
▶ 3:52:51We have to hold these companies accountable. And the best way to do this is through transparency. My bipartisan and bicameral patients deserve price tags. Bill does exactly that. Please give the american people your support. Thank you, Mr. chairman, I yield back. >> gentleman yields back. That concludes the questioning section session or section of this hearing. I ask unanimous consent to insert in the record documents included on the staff hearing document list and those that brought up in the during the meeting. Without objection, so ordered.
▶ 3:53:21I now recognize the ranking member for 30s for a point of personal privilege. >> thank you, Mr. chairman. I just want to thank everybody for coming here, and I want to thank you in advance for being part of our bipartisan solution. We appreciate it. Um, our members worked hard for this hearing, and they they wanted to ask their full five minutes of questions. So I would just ask everybody we had to truncate the end of it because of, of your schedule.
▶ 3:53:46So we I would just ask everybody, when you get these questions from members on both sides of the aisle, please, um, give us in depth responses quickly because it will help us as we work to develop bipartisan legislation. Thank you, Mr. chairman, I yield back. >> thank you. Ranking member degette, I would like to thank all of our witnesses again for being here today. Members may have additional written questions for you. I guarantee they will. And I'll remind members they have ten business days to submit questions for the record.
▶ 3:54:16And I ask the witnesses to respond to the questions fully and promptly. Members should submit their questions by the close of business on thursday, february 5th. Without objection. Subcommittee is adjourned. Thank you.