▶ 0:20:06Chair Crapo: The committee will come to order. We meet today to favorably consider reporting the nominations of arjun mody, who is nominated to serve as the deputy commissioner for the social security administration, jeffrey goettman, who is nominated to serve as the deputy U.S.
▶ 0:20:25Chair Crapo: Trade representative, julie callahan, who is nominated to serve as chief agriculture negotiator at the usdr, and josh bell at the department of human services as inspector general. This morning's meetings will offer remarks on the nominees. We will notify members of the time and location today to conduct a vote on the floor.
▶ 0:20:54Chair Crapo: And I believe we have agreed, senator wyden, that would be at 2:15 in the president's room, and then we will vote on the four nominees. Each of the nominees proved themselves to be well-qualified. Mr. arjun mody highlighted his extensive experience working with congressional leaders to build consensus and find solutions to challenging policy issues. He will bring the same work ethic and collaborative approach to the social security administration. Mr.
▶ 0:21:23Chair Crapo: Jeffrey goettman demonstrated his commitment to ensuring the resiliency of U.S. manufacturing supply chains, particularly for small businesses. I look forward to working with him if confirmed to ensure the formulation of trade policy that is both fair and economically sound. Dr. callahan brings decades of expertise to the ustr, as reflected by the over 80 trade associations supporting her nomination.
▶ 0:21:52Chair Crapo: If confirmed as chief agriculture negotiator, she will ensure the important interests of american culture are champion on the world stage. Lastly, Mr. bell will utilize his extensive oversight experience if he is confirmed as inspector general to fight waste, fraud, and abuse and to help keep congress abreast of the hhs's steps to save taxpayer dollars. I will be voting in favor of each of the nominees, and I encourage all of my colleagues to do the same.
▶ 0:22:21Chair Crapo: I know recognize ranking member senator wyden for his remarks.
▶ 0:22:25Sen. Wyden: Thank you very much. Today the committee votes on for more nominees that will be dealing -- four more nominees that will be dealing with health and well-being as it relates to the american people. Donald trump campaigned on the lower and costs to the american people, but as families know all across the land, if they go to the grocery store, the doctor's office, costs are going up.
▶ 0:22:49Sen. Wyden: Whether it is hiking tariffs, getting energy supply, or letting insurance premiums skyrocket for millions, donald trump's presidency has really been a disaster for the wallets of working americans. This committee ought to be focused on finding solutions to bring these costs down.
▶ 0:23:11Sen. Wyden: Instead, republicans are rubberstamping more nominees to carry out what I think based on going to a grocery store, which people do this thanksgiving holiday, it is a dangerous and expensive proposition when they were told their costs were going to go down. Mr. bell is nominated to serve as inspector general at hhs.
▶ 0:23:33Sen. Wyden: He has been an individual who has not done what is needed to root out fraud and abuse in our government after illegally firing nearly all inspector generals. He replaced them with partisan operatives and has gone on to further sabotage independent oversight. Nothing Mr. bell has provided to the committee demonstrates to me he will not be more of the same. Next is Mr. arjun mody, nominated to be deputy commissioner of the social security administration.
▶ 0:24:06Sen. Wyden: He was given another job I donald trump want him, putting him that for most -- him neck and neck for most job titles alongside marco rubio. If confirmed, he will be expected to play a much bigger role at social security while his boss takes on the ceo position at the irs. From the jump, donald trump has worked to undermine the lifeline of social security.
▶ 0:24:31Sen. Wyden: What is needed now more than ever is leadership at this crucial position when we are looking at the possibility of privatization that trump has put us on. I don't believe Mr. mody has made the case he will provide that leadership. Finally, the committee votes today on two more trade nominees. Julie callahan is one, chief agricultural negotiator. And jeffrey goettman, deputy in ustr. It goes without saying the trump trade agenda has been a mess.
▶ 0:25:02Sen. Wyden: The tariffs change so much day today it makes your head spin -- day to day it makes your head spin. Farmers and ranchers bank to get off of the roller coaster. Meanwhile, families see the costs of their groceries and daily necessities skyrocket. As the country heads into the holiday season, parents will be force to make a tough choice between what ends up under the christmas tree and paying for necessities.
▶ 0:25:32Sen. Wyden: Christmas is about to be a lot slimmer this year thanks to the tariffs. What is needed is leadership at ustr that will lower costs. Neither Dr. callahan nor Mr. jeffrey goettman have shown they will stick up for the american people and farmers and small businesses. Dr. callahan is a very experienced trade negotiator, but I have strong concerns about her failure to commit to this committee during her confirmation that if confirmed she would follow the law, not a blind order from donald trump.
▶ 0:26:03Sen. Wyden: Each of these nominees has been hand selected by donald trump to carry out his agenda. This committee should be focused on bringing down costs to the public, not confirming more of trump's nominees who will drive them up. I urge my colleagues to vote no on these nominees. Thank you.
▶ 0:26:18Chair Crapo: Thank you very much. I see we have two or three other senators. If you are here for the nominees, you can make a statement now. If you are here for the hearing, we will do that. We will reconvene at 2:15 in the president's room of the floor for the votes of these four nominees. We will now take a five-minute break while we bring the witnesses to the table.
▶ 0:32:26Chair Crapo: This hearing come to order. After the longest shut down in history, the federal government has we opened. For 43 days, americans lived with disruption and uncertainty. Essential food assistance was paused. Paychecks for servicemembers and federal workers were held, in air travel was delayed for safety. Both sides agree the cost of health care is too high.
▶ 0:32:54Chair Crapo: But sending billions of dollars to insurance companies while premiums continue to rise and the deficit continues to grow is not the only solution. We need to address the root causes of the explosive increase in health care costs rather than mask them with an sustained spending -- fun sustained spending -- unsustained spending. Today we meet to discuss potential solutions.
▶ 0:33:22Chair Crapo: To our witnesses, thank you for your willingness to appear on such short notice to share your insights. Our health care system is broken. Obamacare failed to make health care more affordable. Premiums and out-of-pocket costs are rising for all americans. On the individual market, the obama care subsidies which do not expire despite some of the confusing rhetoric only mask year price increases.
▶ 0:33:55Chair Crapo: The temporary enhanced covid era credits with my colleagues -- which my colleagues on the other side have twice set to expire exacerbate the failures. Fraud has exploded and incentives to hold down premiums have evaporated. In fact, only 3% to four -- only three to four percentage points of the underlying premium increased. Confronting patients today is the result of the expiration of the enhanced covid credits.
▶ 0:34:22Chair Crapo: Some will argue that time has run out to consider alternatives to extending the credits. I encourage my colleagues to avoid this conclusion and instead keep an open mind in search of a bipartisan outcome. We need both short-term and long-term solutions. In the short-term, we cannot simply throw good money after bad policy. If we keep advancing a system that drives up premiums, we will make this problem even harder to solve.
▶ 0:34:52Chair Crapo: Instead, we should set the groundwork for giving americans more control over their health care choices rather than accepting the current system of giving billions of taxpayer dollars to insurers. We should consider writing financial assistance directly to consumers through health savings accounts which are now available on the obamacare exchanges because of a provision in the one big beautiful bill.
▶ 0:35:15Chair Crapo: Leveraging long-standing provisions in the tax code like the medical expense deduction could help patients further avoid high out-of-pocket costs. To guide future policymaking, a commission at the cms can evaluate and recommend options to further reduce costs for all americans. We should find cost-sharing reduction subsidies which mitigate out-of-pocket costs for low income enrollees, reduce premiums for all obamacare plans, and save taxpayers money.
▶ 0:35:48Chair Crapo: We should also enact pbn reform which would realign incentives in the drug supply chain to lower patient costs at the pharmacy counter. Ranking member wyden and I intend to reintroduce the senate finance committee's package which we negotiated in the last congress on a bipartisan basis. And we are going to do that shortly. We invite all members of this committee to join us as cosponsors as we move this bill to the president's desk hopefully soon for his signature.
▶ 0:36:19Chair Crapo: The process undertaken by this committee should serve as a model for other reforms. Health care integration can produce efficiencies, but too much consolidation can result in monopolistic power houses that block innovative disruptors, limit market competition, and constrain consumer choice.
▶ 0:36:40Chair Crapo: We must also seek to expand care access points to avoid costly treatment delays, establishing long-term telehealth flexibility would allow patients to receive care in lower-cost settings. We should reform our clinician payment system to bolster the workforce, increase the reimbursement stability for independent practitioners, and allow a wider array of providers to provide services.
▶ 0:37:09Chair Crapo: Swift cutting-edge innovations and emphasis on preventative measures can reduce higher long-term costs. We cannot transform our broken health care system overnight, but this committee has a proven record of bipartisan success. And today's hearing is the first step in building the foundation for this reform. I again thank our witnesses. And I now turn to ranking member wyden for his opening remarks.
▶ 0:37:33Sen. Wyden: Thank you very much, Mr. chairman. Today, we discusse the health care crisis facin american families. At this very moment, millions are logging onto healthcare.gov and seeing premiums double, triple, or in the case of our guests from oregon, even worse.
▶ 0:37:55Sen. Wyden: Republicans in charge of the committee should have held this hearing months ago instead of weeks before americans pay their crushing first premium for january. Democrats on the finance committee have been ready to get to work for more than a year when we first asked public and to confront this catastrophe facing american families.
▶ 0:38:17Sen. Wyden: Instead of working to avoid these devastating premium increases for americans like our guests, republicans voted months jamming through massive tax breaks to billionaires and at the same time cut more than $1 trillion to the health care system that will result in 15 million people losing their coverage, hospital closures, and higher costs for all, including those with employer-sponsored health care.
▶ 0:38:43Sen. Wyden: More than 100 60 million americans are going to experience that cost shift -- 160 million americans are going to experience that cost shift in higher premiums. Many will pay a significant amount more for their part d. It has been many days since the committee held a hearing on health care. This entire time, the democratic position has been the same.
▶ 0:39:08Sen. Wyden: Let's extend the tax credits and give our guests the same attention billionaires got so that millionaires can get ahead. So I say to my republican colleagues today sitting on your hands has consequences. Americans like our guests from eugene, oregon, have already seemed alarming notices that there premiums are skyrocketing. In their case by 500%.
▶ 0:39:39Sen. Wyden: 500%. To more than $2200 a month. There is a health care cost freight train I would say to my colleagues hurtling interview as we speak. Based on what I heard on my trip to oregon last week, more and more americans are getting pushed onto those train tracks. Step one is to get them off the tracks.
▶ 0:40:02Sen. Wyden: Open enrollment ends in less than four weeks from today for people who need their coverage to continue in january like cancer patients or those with expensive prescription drug costs. Step two is to address why americans are in this predicament in the first place. That means reining in insurance company abuses across the health care system. Not just for people who buy health insurance on their own.
▶ 0:40:27Sen. Wyden: It means cracking down on middlemen who are skimming off the top of every single health expense, and it means taking unreal fraudsters like unscrupulous brokers or sophisticated corporate scammers who built medicare for billions -- bill medicare for billions each year. My view, and I looked at it especially the last few weeks, is there is no way for congress to put together a proposal in the next couple of weeks that is going to help people in january.
▶ 0:40:58Sen. Wyden: Just can't be done. A clean extension this year is the bare minimum of what is necessary. If republicans are ready to have the debate about what comes next, democrats will say we have been waiting for it.we are ready to go . The last several weeks, republican's expressed a sudden willingness to take on -- republicans expressed a sudden willingness to take on big insurance.
▶ 0:41:22Sen. Wyden: I have been working on these issues for quite some time, and I don't see any evidence in the past history of republicans taking on the big insurance companies. So as we start this discussion, put me down as a bit skeptical. Now, if they are serious, serious about taking on the crooks that dominate big insurance like united health care, I am all in.
▶ 0:41:46Sen. Wyden: In my view, that starts with the laser focus on lower costs for consumers, going after fraud where it truly exists, and cracking down on middlemen. The fact is as we begin this debate, there is only one tough flaw on the books -- law on the books that really plays hardball with the insurance companies. I am proud to be able to see this morning I am the author of it. It was a bill that dealt with the gaps in medicare called medigap.
▶ 0:42:19Sen. Wyden: When it started, seniors were getting ripped off every which way. Fast talking sales people would come to their house and often sell them 8, 10, 12 policies not worth the paper they were written on. Were not worth the paper they were written on. So I had seen this when I was director of the panthers. When I came to congress, I said, let's do something about it. We played hardball with the insurance companies. And now there is something that protects consumers and protects the industry.
▶ 0:42:48Sen. Wyden: So if you are serious about taking on big insurance companies, we will have plenty to talk about. But I will tell you, I think that law is a logical foundation for addressing the challenges of our time -- the health care challenges of our time. First, republicans say the affordable care act is all about fraud. The facts do not show that. But my view on that has always been any fraud is too much fraud.
▶ 0:43:15Sen. Wyden: So in this congress, I introduced a bill to reign in abusive practices by insurance brokers. I thought we were going to get a bunch of republicans. Alluha akbar out fraud. The bill -- a lot of talk about fraud, but the bill today is in the hopper. Let's get serious about those kinds of fraud.
▶ 0:43:44Sen. Wyden: Let me wrap up with a couple points on the republican ideas I have seen floated in the papers, particularly ideas related to tax preferred savings accounts. There is no question that these bills can be a useful tool for very wealthy people. There is no doubt about it. But I don't see it as a comprehensive health insurance opportunity for someone like my friend, Mr. bartley armitage. Republicans claim their ideas will deliver less money to insurance companies and more money to consumers.
▶ 0:44:15Sen. Wyden: So our investigators spent the weekend looking under the hood, and what we found is the number one administrator of these accounts is united health group and their subsidiary. Yet again, the big insurance companies found a new way to profit off the system while lurking in the shadows. So these proposals right now have an awful lot of trojan horse in them for big insurance.
▶ 0:44:40Sen. Wyden: They don't look to me like they are going to help bartley and carla. Let's be on the lookout for someone who wants to send a few thousand dollars to americans and say that will take care of your health care and you can have that rather than something that will help you pay for serious illnesses like cancer. Mr. chairman, I would like to enter a minority report.
▶ 0:45:01Chair Crapo: Without objection.
▶ 0:45:03Sen. Wyden: Finally, there are a couple other things we have to watch for. The very vulnerable people need a small dollar premium. Republicans have not been supportive of that. Finally, republicans continue to raise additional antiabortion restrictions that will pave the way for a defective national abortion ban by inserting language into the tax code of america for the first time.
▶ 0:45:31Sen. Wyden: I want to make the point now very clearly that on our watch on this side of the dais, that is not going to happen. So there is a lot to do, but it is urgent business to pass a straight extension now so that Mr. armitage and people I him can get some help -- people like him can get some help. After that, I will talk about lowering costs, taking on middlemen, reining in abuses by insurance companies.
▶ 0:45:59Sen. Wyden: And I close that I have been talking about it and let's have more constructive talk.
▶ 0:46:08Chair Crapo: I disagree completely, almost completely, with your characterization of the differences between us, but we will get into those. And I hope we get to constructive engagement on these issues.
▶ 0:46:19Sen. Wyden: We can't see the names of the republicans to the ripoff of the medigap insurance by signing onto my bipartisan bill.
▶ 0:46:27Chair Crapo: Ok, I am not going to debate you on this right now, but let's just make it clear, we have been engaged very aggressively and will continue to be very aggressively engaged. We have very big differences of opinion on these issues, and we are trying to work out solutions. I want to work in a constructive way as you suggested, and we can make that happen. I have to go to a banking executive session right now. Senator kennedy -- excuse me, cassidy.
▶ 0:46:57Chair Crapo: Senator cassidy said he will do the introduction of the witnesses and get the process moving. I will be back as soon as I can. Thank you.
▶ 0:47:03Sen. Cassidy: First witness is douglas holtz-eakin, who serves as president of the american action forum. Prior to joining aaf, he was chief economist at the caps off economic advisors under president george w. Bush and director of the congressional budget office. His extensive knowledge of the tax code and health insurance markets, and we are grateful for his input. Next, jason levitis is a senior fellow at the urban institute.
▶ 0:47:35Sen. Cassidy: Prior to his current role, he served at the U.S. deferment of treasury under president barack obama. He represented the treasury during the development and enactment of the affordable care act. Introducing a democratic witness. Lastly, brian blase. Prior to his current role, he served as assistant to president trump at the white house national economic council.
▶ 0:48:02Sen. Cassidy: Notably, he was also staff of senator barrasso. Welcome back to the senate. And now I turn it over to ranking member whited to introduce Mr. armentano -- ranking member wyden to introduce Mr. armitage.
▶ 0:48:21Sen. Wyden: Thank you. It is a pleasure to have you. The two of you are the face of the health care challenge in america. One of the biggest hard-hit groups is folks between 55 and 65. And they are just praying that they can get through the hoops of health care so they will be eligible for medicare at 65. You all were a few years short. You worked construction.
▶ 0:48:49Sen. Wyden: The job as I understand it was grueling and sometimes physically brutal. And you did it for 40 years and you played by the rules and you worked hard. And you were ready to have a bit of help for those couple of years until you were eligible for medicare. It just seems to me that this picture that you are going to paint today is especially important. And I so appreciate your leadership.
▶ 0:49:18Sen. Wyden: When people hear what you all went through, they say that is what good citizenship and american values is all about. That is what you and carla have been all about for decades. So I appreciate you making the trek across the country. I know something about a number of subjects, but I know the airline schedules better than anything else under the sun and it is a hard trip. I appreciate you guys coming. It does not have to be this way. It does not have to be this way.
▶ 0:49:49Sen. Wyden: I am thinking that one thing. What you said is, guys, stop fighting, and figure out a way to help folks who are getting clobbered by these insurance costs. Because that wrecking ball is headed your way, and we are determined to figure out a way to get some help now so you get through this and then work as you heard us talk about on a longer-term solution. Glad you are here. Thank you for giving me a chance to introduce Mr. armitage.
▶ 0:50:18Sen. Wyden: Carla, thank you for the good counsel you gave at the various meetings when we talked about how you would represent this incredibly important group of oregonians and americans. Thank you for your expertise on this subject as well. Thank you.
▶ 0:50:33Sen. Cassidy: Dr. douglas holtz-eakin.
▶ 0:50:35Dr. Holtz-Eakin: Mr. chairman, thank you for the privilege of being here today. In my testimony, I wanted to make three basic points. Point number one is that the aca was and remains a flawed policy construct from several perspectives. As an insurance market, is overly rigidly regulated, making it difficult to manage the costs of that market. And it has proven to be a very high cost location for insurance.
▶ 0:51:05Dr. Holtz-Eakin: From the perspective of economic policy, and has some highly detrimental labor market incentives both for the employers with pay to play provisions committee taxes original levied there, and for workers themselves when there is no time between work and health insurance as there is with employer-sponsored insurance, which is an important thing in america to support work in every way we can.
▶ 0:51:29Dr. Holtz-Eakin: And from the outset, the subsidies were so generous that you could do the math and figure out that up to the poverty amount, it made sense for insurance to please to put their workers in exchanges and the worker and employer could come out ahead. Those incentives were there at the beginning and have not changed. They remain a headwind to esi in america. And to continue them and exacerbate them is unwise.
▶ 0:51:59Dr. Holtz-Eakin: Senator johnson did the original calculations on this. From a fiscal perspective at the time, I was quite worried about the implications which were not good then and are even worse now. To add any further additional mandatory spending to the budget is simply unwise at this point and must be offset at a minimum or find another way to meet that objective. As a piece of health policy, economic policy, and budget policy number the aca has always been a struggling construct.
▶ 0:52:30Dr. Holtz-Eakin: Point number two is from the perspective of the 2026 plan here, the plans have been assigned, the premiums have been set, people already enrolled and made their selections. There is very little this congress can do to change the outlook. There are some channels we should get additional dollars to for those participants in the aca market. Happy to discuss those with you. But you cannot do much to the fundamental working of the market at this point.
▶ 0:52:59Dr. Holtz-Eakin: Past 2026 within the constructs of the aca, there are some options on hsa's, nsa's, and other things I would be happy to discuss with you that would be welcome changes and I think improvements to the aca. They don't change fundamentally the problems we face in the health care area. Point number three is we are overdue for a real rethinking of health care policy at the federal level. And I think there should be two primary objectives.
▶ 0:53:29Dr. Holtz-Eakin: The first objective would be to rationalize the insurance subsidies. We subsidize essentially every piece of health insurance in the economy. Employer sponsored insurance is subsidized through the tax code. We have the aca subsidies. We have medicaid. We have medicare. All of these are on the taxpayer. And they sometimes compete with one another. The aca is in competition with esi in the subsidies which people can migrate.
▶ 0:53:56Dr. Holtz-Eakin: A rational set of subsidies that make sense from the federal budget outlook and the insurance markets would be a welcome change to where we are right now. The second major objective is to get better incentives across the board for high-value care. It remains an objective that was not pursued very hard in the aca. At the time, we were going to cover everyone or bend the cost curve and it ended up covering everyone very little.
▶ 0:54:27Dr. Holtz-Eakin: We need to revisit that discussion. In my testimony, I suggested a great vehicle for you to think about improving those incentives is medicare, medicare advantage in particular. That is the place where the majority of medicare beneficiaries are. It is the greatest opportunity to improve practices in the united states, and medicare is a great budgetary threat. So I encourage the committee and the congress as a whole to take a hard look at that and make some progress to a better -- to better health care outcomes. Thank you.
▶ 0:54:59Dr. Holtz-Eakin: Looking forward to answering your questions. >> Mr. chairman, ranking member wyden, and distinguished member's of the committee, thank you for the opportunity to testify about ways to make health care more affordable. My name is jason levitis, and I am a senior fellow at the urban institute. My views expressed here are my own and do not represent the institute, its trustees, or its funders. I conduct research on the aca and the intersections of health care and tax law.
▶ 0:55:29Dr. Holtz-Eakin: I also served at the treasury department where I led aca implementation and worked on tax preferred health spending arrangements. Much of my focus these days is on how to simple fight health care system to reduce costs. The system has grown too completed and segmented with a cathedral of complex rules. The congressional research service easily catalogued 24 distinct varieties of tax preferred health spending arrangements.
▶ 0:55:54Dr. Holtz-Eakin: This complicity increases costs for consumers, employers, and ultimately taxpayers as we consider how to reduce health care costs. I would love to partner with this committee on ways to stupefy the health care system and related tax rules. But my main focus today is more immediate. Open enrollment for 2026 is in full swing, and millions of americans are now seeing huge premium increases. People like Mr. armen tosh -- armitage.
▶ 0:56:25Dr. Holtz-Eakin: That is because the tax credit are expiring at the end of 2025. This will greatly increase costs for americans. Premiums will increase for almost all of the 24 million people in the individual market. Premiums will more than double on average. 4.8 million people will lose health coverage in 2026, exposing them to ruben his health care costs. These effects will be felt across all geographic areas, income levels, and age groups. Certain groups will be especially harmed. Older people face the largest premium increases.
▶ 0:56:56Dr. Holtz-Eakin: People in high premium areas will be hit hard. This is disproportionately rural areas. Self-employed people and small businesses often don't have access to coverage so rely heavily on the tax credits. Among the lowest income tax credit recipients, a person earning just $23,000, will have to pay a premium of about $1000 per year in addition to deductibles and co-pays. The health care system overall is also in jeopardy.
▶ 0:57:24Dr. Holtz-Eakin: Together with the recent reconciliation bill, 14 million people will become uninsured, a 50% increase. This will reduce provider revenue by about $1.1 trillion over the next 10 years, risking a wave of hospital closures and other disruptions. While the premium increases do not take effect until the end of the year, their damage has already begun and will grow with each additional day that an extension is delayed.
▶ 0:57:48Dr. Holtz-Eakin: That is because people are deciding right now whether to purchase health care for next year. The deadline to enroll is december 15, less than four weeks from today. Already, millions are learning through notices or plain shopping that there premiums are skyrocketing. Many will drop coverage, choose not to enroll, or cancel their automatically enrollment. If they don't enroll, they will be ineligible for the tax credits, even if the enhancements are later extended.
▶ 0:58:16Dr. Holtz-Eakin: Others, especially those with pre-existing conditions, making painful choices to re-enroll the much higher premiums -- with a much higher premiums. A solution is needed urgently to stop this pain from spreading and start reversing it. In recent days, we have seen a flurry of new ideas to change tax credits or replace them with something else. It is certainly worth considering longer-term options to lower health care costs.
▶ 0:58:44Dr. Holtz-Eakin: Unfortunately, the calendar has overtaken the opportunity to implement such changes for 2026. The reason is simple. Putting in place a new policy would require months or years of implementation time. Setting aside the need to negotiate and pass a bill, any change would require marketplaces to build, test, and deploying new I.t. Systems. Many would also require rulemaking and changes to state insurance regulations. By the time it is done, open enrollment will be a distant memory.
▶ 0:59:13Dr. Holtz-Eakin: So how can we stop this pain and start reversing it? At this point the only option is aenhancements. The marketplaces have already built that option and been preparing for the possibility of an extension. My understanding is minimarket places could update for clean extension within days. I was working at the treasury department in this painful months in late 2013 when the marketplace having been rushed into services -- just service initially failed to function.
▶ 0:59:43Dr. Holtz-Eakin: That lesson should be heated today. Building a new policy takes time. It risks operational failure if rushed. The senate finance committee is well-suited to undertake the process to find bipartisan reforms for the future. These efforts will take months or years. For Mr. armitage and like him come the only help that can come in time is to extend the enhanced tax credits in their current form. Thank you.
▶ 1:00:07Chair Crapo: Thank you. I share your view. Mr. blase.
▶ 1:00:18Mr. Blase: Thank you for the opportunity to testify. The aca promised affordable, high-quality insurance and it failed. Millions of families lost their health plans and doctors. Premiums and deductibles soared and networks narrowed. The law entrenched and inefficient insurance-dominated health sector with massive subsidies flowing straight from the treasury to health insurance companies.
▶ 1:00:47Mr. Blase: A new joint economic committee report found the main winners from the subsidies or health insurers who stock prices soared because of the aca. The aca's regulations increased premiums nearly 50% in just the first year. Subsidies were needed so people could afford the more expensive coverage. The underlying regulatory and subsidies structure leads to ever escalating premiums and prices.
▶ 1:01:18Mr. Blase: Since 2014, aca plan premiums have increased nearly twice as fast as employer plan premiums. My family has an aca plan. We just received notice our premium next year will be $33,000 for a plane with a plane with $14,000 deductible. Higher premiums create pressure for still more subsidies. More subsidies lock in a high cost system and permit large insurers and hospital systems to remain inefficient.
▶ 1:01:47Mr. Blase: If congress was to make health care more affordable, it must reform the structure itself not throw more good taxpayer money after bad. The aca subsidies are ill designed and inflationary. The enrollees share of the premium is capped regardless of the total premium. When enrollees pay only a small slice of the premium or no premium at all, insurers faced almost no price discipline.
▶ 1:02:14Mr. Blase: Insurers can raise premiums knowing that taxpayers will absorb almost all of the increase. The acas regulations drive higher costs. For example, under the medical loss ratio, insurers must spend a minimum share of premium revenue on medical claims. In other words, the increased profits, insurers must increase premiums. The aca's essential health benefits require plans that cover the same set of services regardless of what people want or need.
▶ 1:02:43Mr. Blase: These rules increase premiums and wasteful spending. Covid your subsidy boosts resulted in fully subsidized coverage and led to massive fraud. In 2025, there were 6.4 million people enrolled in fully subsidized plans who are not eligible, costing $27 billion. Many of these enrollees were signed up without their knowledge or consent. Victims of massive fraud schemes.
▶ 1:03:10Mr. Blase: 40% of fully subsidized enrollees used no medical services in 2024. Federal taxpayers sent more than for people who do not use a plane a single time. The aca subsidies structure, particularly with the covid add-ons, incentivizes small employers to drop coverage. Verse percentage -- the percentage offering health plan has dropped by one third since 2010.
▶ 1:03:40Mr. Blase: The aca has led some state and local governments to drop retiree health coverage, offloading that expense under the federal taxpayer. The covid credits by lifting the subsidy cap at four times the federal poverty level provide large subsidies to wealthy early retirees. Aca premiums will rise next year because of underlying flaws with the program. The large underlying subsidies will largely cushion the premium increase for more than 93% of enrollees.
▶ 1:04:09Mr. Blase: Most will pay less than $80 a month for a plane next year with the federal taxpayer picking up 80% of the premium cost at a higher percentage for lower income enrollees. The inflation reduction act set the covid credits to expire after 2025 and they should end. Extending temporary emergency subsidies would deepen our broken system instead of fixing it. The enhanced subsidies have supercharged fraud, benefited insurers more than patients, and increased taxpayer exposure.
▶ 1:04:40Mr. Blase: In the near term, congress should take three steps to help families. First, appropriate the caution reduction payments. This would lower civil plan premiums are roughly 12% and deficits by $30 billion. Second, have lower income enrollees the option to take their csr subsidy as an hsa contribution. Under an hsa option, the paragon developed, nearly seven in 10 enrollees would be better off financially with average gains of about $1500 a year.
▶ 1:05:12Mr. Blase: This is exactly what we should be doing, redirecting existing subsidies away from insurers into accounts that patients control. Third, congress should expend more affordable and flexible coverage options for families and small employers without new federal spending. I want to thank you and I look forward to answering your questions.
▶ 1:05:35Chair Crapo: Mr. tosh. --Mr. armitage.
▶ 1:05:44Mr. Armitage: Thank you. Thank you for the opportunity to be here today. My name is bartley armitage and I live in eugene, oregon with my will wife carla who is sitting behind me. She was a teacher for 25 years. Together we raised our son and two daughters and now have three granddaughters who we love to spend time with. Carl and I worked our entire lives.
▶ 1:06:14Mr. Armitage: Our parents did not have a lot of money. My father died when I was 12 years old and my mother, my siblings, and I lived in the basement of an old hotel for many years as we were growing up, counted on food stamps. Carla got her first job when she was just 13 years old and worked all through high school.
▶ 1:06:33Mr. Armitage: I started working as a pretty small child walking soybean fields with my grandparents on their farm and continued to work various jobs from then on. I moved to oregon when I was 19 years old and spent nearly 40 years working various construction. As a carpenter for 37 years.
▶ 1:06:58Mr. Armitage: Working my way up from an apprentice to journeyman and then to a foreman and finally as a superintendent, in charge of the contract for the company I work for. I was on a lot of major projects with a lot of overtime. When you become a superintendent, you have to work a lot of hours. 10 to 12 hours just to get paid eight. Working construction takes a toll.
▶ 1:07:24Mr. Armitage: I retired realizing I could no longer compete physically with 25-year-olds in their prime. For all my years of construction, I was worn out. You get worn out. I needed a couple of knee surgeries and a hernia surgery. Carla dealt with more demanding health issues, suffering from a chronic fever that we believe was caused by toxic black mold.
▶ 1:07:53Mr. Armitage: She and her daughter spent years going from doctor to doctor trying to get a diagnosis for that. We ended up having to move out of our home. It still affects her today. My wife had also surgery several years ago that cost tens and tens of thousands of dollars just for a seven hour hospital stay. It took us several years to pay off the debt that the insurance did not cover.
▶ 1:08:22Mr. Armitage: I can't even imagine what it would be like to navigate that situation without health insurance. Nobody wants to pay that kind of bill for one month. Most can't afford it. A bill like that is like having to pay for two houses. Well a bill like I will be looking at, which would be five times what I am paying now.
▶ 1:08:55Mr. Armitage: We are worried about having to deplete our retirement savings to pay for health care. We worked hard to raise three children and save that money. And on not that great of an income. Our savings is what we planned to retire on and to have in case we need to eventually go to a nursing home. In other things that could come up -- and other things I could come up. It is they are so we have a decent life.
▶ 1:09:28Mr. Armitage: And some of the things that nobody really wants to have to deal with. Since we have shared our story, we have heard from so many people who are in the same boat as us, struggling to figure out how we are going to move forward with these costs. And before I conclude, carla asked me to share a couple of thoughts on her behalf. First, we want to be around to see our granddaughters grow up.
▶ 1:09:53Mr. Armitage: Our fear is without health insurance, we won't be able to go to the doctor if we are not feeling well and face those consequences. We know people who have not had the opportunity and it breaks our heart to think about what they are going through missing out on life because they could not afford to get the care they needed. Second, making health care affordable for everyone is the type of thing we expect our tax dollars to go toward.
▶ 1:10:24Mr. Armitage: In a country like the united states where it is a good country, a strong country, and a rich country, people should not have to go without care. I am honored to be invited here today to share my express on behalf of millions of other american families who are facing the same shock we are. I urge you to take action that keeps our health costs affordable before we are hit with a massive bill like this january. Literally, overnight.
▶ 1:10:53Mr. Armitage: Thank you and I look forward to your questions. >> I think our witnesses very much for your testimony. I apologize I had to step out to a banking committee for marco vote for much of it but I have read your testimony and I'm very familiar with your statements and your perspectives. I would like to start out Dr. holtz-eakin with you.
▶ 1:11:22Mr. Armitage: The different ways the congress could approach the subsidization put in place needed -- and also needed reforms for the obamacare market. You further outlined various tax-advantaged health care accounts and tools that already exist in the tax code, each with unique rules and benefits. Would you expand on the concept of delivering financial assistance through health savings accounts, especially for those in bronze and catastrophic plans?
▶ 1:11:50Dr. Holtz-Eakin: Certainly. I think it is important to think about that in two different ways. The first is as I said in my opening statement, for the 2026 plan, your options are limited. There are people who have enrolled and have a bronze plan in hsa and they could appropriate additional funds to put in that to help them deal with the costs there facing, but not everyone has scotland.
▶ 1:12:20Dr. Holtz-Eakin: You can't get to every beneficiary that way. In the near term it is fairly limited. The next plan year, that is an attractive policy because we have done some work. We have a simulation model of the under 65 market. I think for example $4000 in an hsa for everyone who has a bronze plan, you lower the cost compared to having a premium tax credit, it is attractive from a budgetary point of view.
▶ 1:12:51Dr. Holtz-Eakin: You see obvious migration to the bronze plan and people using the hsa to manage finances. You get reduced reductions in some of the premiums. That is something I think is worth consideration. Happy to work with the committee with different variations on it.
▶ 1:13:06Chair Crapo: Dr. blase, you develop cost-sharing reductions or csr's and depositing those dollars into a health savings account. I realize that is probably the help committee jurisdiction but could you elaborate on this proposal? Could you also share with this information on how you would increase access to hsa's on exchange? Dr. blase the aca had two subsidy programs.
▶ 1:13:34Chair Crapo: It had the subsidy program that reduced the amount of premiums for enrollees, separate subsidy program for lower income enrollees which is about two thirds of enrollees that reduced their deductibles, copayments, and out-of-pocket payments. The issue was the aca was not written particularly well and there was not a valid appropriation for the cost-sharing reduction program.
▶ 1:13:57Chair Crapo: So federal courts ruled the obama administration was making illegal payments through the csr program. The trump administration complied with that ruling. The csr payments stopped. What insurance are stated was significantly increase -- what ensures did was significantly increased the premiums that were tied to it. Premiums increased. The premium subsidy significantly increased. The total subsidization went up.
▶ 1:14:28Chair Crapo: What a csr appropriation would do is significantly lower the benchmark premium so silver plan premiums would come down 12% and that would reduce the federal subsidies as well. It is a way to lower premiums and reduce federal deficits by $30 billion. What we have developed with the hsa option is enrollees would still get the premium subsidy, but they would be able to take the csr subsidy under their control.
▶ 1:14:57Chair Crapo: They would be able to get it as an hsa deposit and element analyze the benefits and found about 70% of enrollees would be better off if they took that, had a government subsidy into an hsa and the and benefit for them would be about $1500.
▶ 1:15:14Chair Crapo: Meaning that would be a much better solution for them than to have just a direct covid era subsidy?
▶ 1:15:20Dr. Blase: It would replace a subsidy that goes directly to the health insurance company. Individual would get the option to take that under their control as an hsa.
▶ 1:15:31Chair Crapo: That 12% reduction in the premium.
▶ 1:15:34Dr. Blase: It would be silver planes across the board.
▶ 1:15:38Chair Crapo: Thank you very much. My final question for you, Dr. blase, you mention other ideas to increase affordability and these reforms are necessary to deliver broad-based options for all americans. The one-size-fits-all nature of obamacare has been a significant driver of increased consolidation and decreased competition and choice. I would like you to discuss that concept very briefly. I am almost out of time.
▶ 1:16:04Dr. Blase: Options were developed in the trump administration help small businesses to allow small businesses to join together for association health plans to gain the same regulatory advantages large employers received. It does not make any sense federal policy discriminates against small employers in favor of large employers. There are other options like short-term limited duration insurance which I know idaho was very successful.
▶ 1:16:31Dr. Blase: That is comprehensive insurance, has much broader provider networks than aca plans at a fraction of the cost.
▶ 1:16:39Chair Crapo: We appreciate your expertise here. Senator wyden.
▶ 1:16:44Sen. Wyden: Thank you very much. Partly, let me start with you. You have been listening to this debate and getting a sense of all of these tax schemes that some of my republican colleagues are talking about. When I listen to this, I don't hear much about consumer protection but I see a real invitation to people like you to buy more junk insurance.
▶ 1:17:13Sen. Wyden: I heard you talking about the expensive no misses that you and carla had over the years. This junk insurance would just put you in a whole when what you're getting now allows you to stay in your home and pay for necessities until you are medicare. Am I missing something?
▶ 1:17:32Mr. Armitage: Yeah, I mean, we have paid a lot of medical bills over the years. We were able to manage them because we had insurance. Work out payment plans with the various health providers. It cut into our budget tremendously at times but we were able to manage it.
▶ 1:17:59Mr. Armitage: With the current budget that we have and at the amount we are paying now in 2025, we have a high deductible so we still have to pay but it is manageable. A lot of these ideas I have been hearing about, I don't have the depth to comprehend a lot of it but -- I don't know.
▶ 1:18:29Mr. Armitage: I'm confused and I am concerned.
▶ 1:18:30Sen. Wyden: I am concerned because I don't think it would come close to paying the kind of expenses that you and carla had. We will talk more about it. That is my concern. How does it feel to be sitting there when the folks on the other end of the table in the suits are telling you when you ought to be allowed to retire?
▶ 1:18:53Mr. Armitage: Well, there are so many types of jobs in this world. Some jobs aren't as physically demanding. I work construction. Various types of construction -- roofing, glazing, and then got into the arbiters apprenticeship. It is very demanding physically and mentally come especially on the managerial side of it. It is a little bit like pro sports.
▶ 1:19:22Mr. Armitage: The quarterback can't play until he is 45 years old.
▶ 1:19:25Sen. Wyden: Brady thinks so.
▶ 1:19:28Dr. Blase: --
▶ 1:19:30Mr. Armitage: In construction, have to cede to the younger generation at some point. Working into your 66 years old is not that feasible.
▶ 1:19:40Sen. Wyden: I just so appreciate you and carla putting a human face on this because back here come everybody always talks about working families. If you had a nickel for every speech that featured working families, you would be rich. But you all are talking about what it is really like and I want to make sure good quality choices, not junk insurance.
▶ 1:20:02Sen. Wyden: I've told my colleagues we did it once when it came to filling in the gaps in medicare and not seniors being ripped off anymore. Thank you for doing this. I so appreciate you talking about this and look forward to after the program we will get a sandwich.
▶ 1:20:21Sen. Wyden: Mr. levitis, let me ask a question within respect to these tax issues. We have 24 health tax accounts now currently on the books. There is a blizzard of all of these -- employment program for accounts trying to make your way through this and our republican colleagues are now talking about number 25.
▶ 1:20:47Sen. Wyden: They are going in the opposite direction for where I went with senior republicans to make life better for folks trying to figure out how to buy medicare supplements. Now, you have expressed the same kind of concern. Why are you so skeptical about the prospect of the 25th version of the same idea and somehow that is going to work out fine for everybody?
▶ 1:21:11Mr. Levitis: Thank you for the question. So there are basically two reasons why at this point approach is like that just would not do anything to help Mr. armitage. The first is it is just too late to build a system like that and have it in place for the marketplaces to work with the treasury department to transfer the money to the fiscal intermediary that runs these accounts for 2026.
▶ 1:21:43Mr. Levitis: Time is up for the immediate role that option. But even beyond that, Mr. armitage needs health insurance. Giving him a few thousand dollars in an account is not going to make a difference. He can't buy a short-term plan right now because he has pre-existing conditions. He won't even get the hsa because he can't afford a bronze plan. These options right now just won't do anything --
▶ 1:22:14Sen. Wyden: Let me quickly ask you for your thoughts on how you can take on big insurance in a way that tackles rising costs and reduces complexity without taking coverage away from people.
▶ 1:22:28Mr. Levitis: That is a great question. I will start by saying the affordable care act did end some of the worst employer insurance practices in terms of discriminating against people with pre-existing conditions. But they have found other ways to not pay for coverage. Things like prior authorization.
▶ 1:22:51Mr. Levitis: I think we absolutely need to look at ways to make sure insurance companies are actually paying for the services they should.
▶ 1:22:59Sen. Wyden: Why don't you give in writing your ideas. I share your views on fixing privatization -- prior authorization.
▶ 1:23:11Chair Crapo: Senator grassley.
▶ 1:23:15Sen. Grassley: I'm going to open with some remarks. Thank you, first of all, for the leadership of this committee for holding this hearing. It is a topic that is top on minds by high health care costs. It is kind of suffocating americans for decades.
▶ 1:23:42Sen. Grassley: One example occurs at the pharmacy counter. I have heard from countless islands that high drug prices frequently lead to folks choosing have to pay for prescriptions and other necessities. That is why years I have worked to bring transparency and accountability to tactics deployed the pharmacy benefit management or pbms. And I'm not the only one in congress doing it.
▶ 1:24:12Sen. Grassley: In fact, the leadership of this committee is working on that as well. Pbms play a significant role in the pharmaceutical drug supply chain. They act as middlemen, processing prescriptions, negotiating prices, setting formularies.
▶ 1:24:30Sen. Grassley: My bipartisan legislation would increase transparencies to better hold pbms accountable while not wholly within the committee's jurisdiction for my legislation, I hope my colleagues will see the importance of acting on pbm reform as soon as possible. High prescription drug prices are one of the several factors driving up health care costs.
▶ 1:24:56Sen. Grassley: The rising cost of health care is also evident from escalating health insurance premiums and required co-pays. There are many parallels between the conversations we are having today and the ones I had with my senate colleagues back in 2009. Unfortunately, my colleagues on the other side of the aisle rushed through obama care on a partisan basis. At the time, my democratic colleagues claimed the law would bend the cost curve down.
▶ 1:25:28Sen. Grassley: It is now evident that was false as was the promise that individuals could keep their health plan if they liked it. Since the enactment of obamacare, millions of americans have been thrown off their preferred health plan while health insurance premiums have skyrocketed.
▶ 1:25:50Sen. Grassley: According to paragon institute, since 2014, obamacare benchmark premiums have increased 129% for a 50-year-old enrollee, obamacare premiums have increased twice as fast as premiums for employer-provided coverage and three times faster than inflation.
▶ 1:26:14Sen. Grassley: That leaves us here today revisiting the debate on ways to bend the health care costs curve . We need to find a solution that will allow all americans to breathe a little easier when they seek health care while also ensuring those with pre-existing conditions are protected. So, Dr.
▶ 1:26:36Sen. Grassley: Holtz-eakin, I have been a proponent of shining a light on health care costs, providing businesses the opportunity to help their employees get health insurance, and allowing consumers the ability to shop for options.
▶ 1:26:53Sen. Grassley: You recently expressed concern that some of the new mandates around drug pricing surprise billing and transparency can add burdens which may erode "the comparative advantage of the private market" and I would like to have you elaborate on the factors congress should consider as they seek to promote greater health care transparency and competitive private insurance markets.
▶ 1:27:22Dr. Holtz-Eakin: The general concern is on mandates as opposed to transparency, restricting the ability of the private sector to effectively respond to incentives to control costs. That is been my concern with the aca from the outset. It was a heavily one-size-fits-all rigid mandate driven system, making it more transparent as to how it works I don't think changes that.
▶ 1:27:49Dr. Holtz-Eakin: So I think as I said in my written testimony, a way to get better health policies has to remember the delivery of insurance devices, drugs, medical services, is an economic activity and we should have the same standards for good economic policy in health as we do elsewhere. That includes keeping taxes low and broad-based and keeping regulations efficient and targeted on promises.
▶ 1:28:20Dr. Holtz-Eakin: I am worried about excessive regulatory approach.
▶ 1:28:25Chair Crapo: Senator cornyn.
▶ 1:28:28Sen. Cornyn: Thank you. Dr. holtz-eakin, I think our national debt is approaching $38 trillion. We are paying more money on interest on the national debt and we are on defense of the nation. Which strikes me as unsustainable.
▶ 1:28:51Sen. Cornyn: I hear proponents of the status quo, these very expensive aca subsidies saying we should just keep using more tax dollars to subsidize insurance companies and not look at reforms of the current system. I am struck by Mr.
▶ 1:29:16Sen. Cornyn: Armitage's testimony and obviously we want to make sure everybody has access to health care in america. But I also recently was talking to a young man who happens to work in a barbershop in austin, texas, and I said, where you get your health care coverage from? He said, well, my employer provides it.
▶ 1:29:44Sen. Cornyn: He said, but I don't take advantage of that area I said, you want the cash instead? He said, yeah, I am 40 years old, healthy, and I will take my chances. But it strikes me, we are talking about a nation of 330 million people. We are talking about a population of roughly 24 million on these aca policies. The federal government under the aca treats everybody the same.
▶ 1:30:14Sen. Cornyn: And we have used the phrase one-size-fits-all, but isn't it true the needs of individuals are not accommodated by a one-size-fits-all policy and that consumer choice might be a pretty good alternative and one that would be more economically sustainable?
▶ 1:30:34Dr. Holtz-Eakin: I agree with that.
▶ 1:30:39Sen. Cornyn: Dr. blase, I'm not sure people really have figured this out you so the money from the federal government goes to the insurance company and are they incentivized to sign up as many people as I possibly can?
▶ 1:30:54Dr. Blase: Yes, the subsidies almost entirely our payments directly from the treasury to the health insurance companies. And they have been the beneficiaries of a lot of this significant fraud and improper enrollment because they are enrolling people that many times don't know they're covered by the plan that don't use the insurance at all, so the government is sending massive payments to insurers on behalf of people who just don't use the plan.
▶ 1:31:23Sen. Cornyn: Wait a minute. So somebody could be covered by an aca policy and not even know it?
▶ 1:31:29Dr. Blase: Yes. So when these subsidy enhancements were put in place, they made the coverage fully taxpayer subsidized for a share of the population.
▶ 1:31:44Dr. Blase: That set in place sort of a massive set of fraud schemes throughout the country to manipulate applications to get people the appearance that they could get a cash gift card if they called the number, if they called the phone number they were asked if they wanted to sign up for health insurance. First, they gave their name, date of birth, they got enrolled in health insurance plan.
▶ 1:32:08Dr. Blase: But they then call back a few weeks later and ask about their cash gift card and there's a bloomberg story from june that quotes one of the customer service agents ss half of the people we enrolled had no idea they were signing up for health insurance. And they don't pay any premium so they don't see the payment come the subsidy just goes directly from the treasury to the insurance company. And we have been automatically re-enrolling people year after year through this system.
▶ 1:32:37Sen. Cornyn: What I hear my democratic colleagues saying is we need to stay the course in this system, but who is paying the premiums for those people who don't even know they haven't signed up on aca?
▶ 1:32:48Dr. Blase: The taxpayer. At the aco -- the aca overall, 85% of the revenue that insurers collect comes from the federal taxpayer so the insurer main complaint is that taxpayer.
▶ 1:33:07Sen. Cornyn: Is the fact 40% of the enrollees and fully subsidized plans did not file a single claim, is that also an additional data point or piece of evidence indicating people have been signed up by these insurance companies and these headhunters I will call them who get paid a commission presumably for as many people as they can sign up as possible, that all of those people -- or many of those people did not even know there were enrolled in a plan and
▶ 1:33:37Sen. Cornyn: Taxpayers are subsidizing?
▶ 1:33:38Dr. Blase: I think it is one of the best data points to illustrate the problem. In august, cms released data for people who did not use their health plan a single time and of the fully subsidized enrollees, 40% of them did not use their health plan a single time. In health insurance, most people use their coverage during the year.
▶ 1:34:00Dr. Blase: 85% of people with the health plan because we spent so much of our health spending goes to our insurance that it is rare for people to have a health plan and not use it. But in the aca, it is becoming more the norm with all of these subsidies going to insurers that people aren't aware they are enrolled in the coverage.
▶ 1:34:20Sen. Cornyn: I see my time has expired.
▶ 1:34:21Chair Crapo: Senator bennet.
▶ 1:34:24Sen. Bennet: Thank you Mr. chairman and thank you for the witnesses for being here. Mr. chairman, said at the outset of this hearing I think an extraordinary thing for the chairman of the senate finance committee and the time I've been here and that is that the american health care system is broken. That is an emphatic statement. It is a statement I completely agree with.
▶ 1:34:48Sen. Bennet: From the standpoint of the people that I represent in colorado where they are suffering day after day after day with the effects of a system that costs them twice as much as the health care system of any other wealthy country, any other industrialized country in the world, a system that provides them so much less than those other health care systems around the world are providing, I could
▶ 1:35:18Sen. Bennet: Not agree more with that observation. And other countries that we compete with, they are spending half of what we are spending on health care. The half is the federal government. The half is small businesses. The half is families that are all spending twice as much as other industrialized countries around the world.
▶ 1:35:39Sen. Bennet: And in those other countries, they expect as a right access to primary care, access to mental health care, access to maternal care, access to affordable prescription drugs. President trump has talked about that over and over again. Hospitals that have enough doctors and enough beds and enough time for somebody who is gotten sick to actually spend time there and get well.
▶ 1:36:05Sen. Bennet: A lot of times in life, you pay a little but you get -- there are rare moments in life I suppose when you pay less and get more. But that is true of people that are living in these other health care systems. I think the immediate task before us is to extend these tax credits for the affordable care act.
▶ 1:36:32Sen. Bennet: We had to do that because otherwise, in our states, people are going to see increases of 200% increases for health care, 300% for health care, 400% for health care. In rural and urban colorado and rural and urban america, that is what they're going to face because of the negligence of people in washington that are now discovering that our health care system is broken. But that is not going to fix our system, that is just going to say people from going bankrupt in the short term.
▶ 1:37:02Sen. Bennet: We have got to fix the system that we have. When the affordable care act was coming through here and we were trying to regulate the insurance companies are saying, you can't throw off americans because they have a pre-existing condition, you can't throw off americans because they have cancer, these guys were all against that because we were regulating the private insurance company in america and that was going to be bad.
▶ 1:37:30Sen. Bennet: And now they are here to say their private insurance company is a fraud scheme. That is also an amazing thing to hear on the finance committee, but it is welcome from my perspective. And I will be honest about it, I support universal health care system in america. I think we should have a universal health care system in this country because I think the american people deserve to spend half of what we are spending on health care and get a better result.
▶ 1:37:59Sen. Bennet: I think people in colorado deserve to have the chance to have into health care for their children just like people across the industrialized world. Rich countries around the world that are not infected by the special interest politics that have driven drug prices through the roof, that have driven insurance prices through the roof that have caused us to have a system that rewards over and over and over again
▶ 1:38:34Sen. Bennet: Fee-for-service, pay as much as possible instead of putting us in the system where we can actually take better care of ourselves and live better lives and live younger lives. Do you know the average life expectancy in this country is six years less and in this other countries that have systems of health care that cost half as much? I don't have time -- let me just finish by saying, I don't think the answer here is a command and control answer washington, D.C.
▶ 1:39:06Sen. Bennet: Quite the opposite. I think we should give everybody in america a public option that is administered by medicare that gives every family in america the chance to decide whether they can get out from underneath the insurance industry that you're talking about, get in a plan where they can actually see the benefit of being in a place with managed care and the chance to be able to take better care of themselves and be rewarded for that.
▶ 1:39:35Sen. Bennet: Instead of being at the whim of the drug companies and the whim of the insurance companies. Mr. levitis, do you have anything you would like to say about that? Briefly, please.
▶ 1:39:47Mr. Levitis: Very briefly, I would be happy to say, yes, insurance is not perfect but people need insurance. We need to make it affordable for people. Whatever flaws it has, we should not punish the people who need insurance by not making it affordable.
▶ 1:40:08Sen. Bennet: Let's fix the system before we double, triple, quadruple the prices on the american people.
▶ 1:40:13Chair Crapo: Thank you for it senator cassidy.
▶ 1:40:19Sen. Cassidy: Remarkable agreement between democrats and republicans. Obamacare failed to give access to all americans to health care and obamacare failed to control health care costs. The kind of comments made back and forth make that clear. The question is, how do we address this? This is personal to me. I'm a physician who worked for 20 years in a hospital. Sir, your story about your issues are the patients I used to see.
▶ 1:40:48Sen. Cassidy: One thing you mentioned, I happen to know the deductibles, which are too high, become a barrier to accessing insurance. You are someone we need to do something for your insurance policy. Not just the deductible, but also the cost of the premium itself. I think that is true. Now, we also have to control health care costs. Dr. blase, be tight, have limited time.
▶ 1:41:13Sen. Cassidy: Tell us about the ability of a health savings account, statistically, not your opinion, but what statistics show once you give the moment the power of the purse, the ability to shop with the health savings account when she is awarded if she chooses a lower cost option, what impact does that have on health care costs?
▶ 1:41:29Dr. Blase: You can look at 50% to 25% reduction.
▶ 1:41:35Sen. Cassidy: In what?
▶ 1:41:36Dr. Blase: Overall health care spending for that family.
▶ 1:41:42Sen. Cassidy: Does it negatively affect outcomes?
▶ 1:41:45Dr. Blase: They end up just as healthy as before. It turns out when they have that control, americans can be wise consumers and make good decisions.
▶ 1:41:56Sen. Cassidy: Americans can be wise consumers. We can trust the mother, that wife -- women may come as all of the health care decisions. We entrust her to make a wise decision and we don't have to be paternalistic?
▶ 1:42:05Dr. Blase: I agree.
▶ 1:42:09Sen. Cassidy: Moran partly pointed out by study after study, now, Dr. holtz-eakin, keep making the point -- I'm so impressed my colleagues are so kind of -- what to give the money to the insurance companies, but can you explain briefly the medical loss ratio that allows 20% of the money we give to insurance companies to be used for profit and for overhead as opposed for direct medical care?
▶ 1:42:36Dr. Holtz-Eakin: In the aca, the medical loss ratio dictated a minimum amounts 80% from 85% that had to be spent on medical care as opposed to other uses of it by the company -- profits, administration expenses.
▶ 1:42:55Sen. Cassidy: I think under the affordable care act 20% is allowed to be taken by the insurance company not for health care but for overhead and for profit.
▶ 1:43:01Dr. Holtz-Eakin: Correct.
▶ 1:43:06Sen. Cassidy: As the guy who was all of the money to go to the patient come the factory giving 20% for overhead -- we need insurance companies, but 20% for overhead and profit, that is 20% wasted on direct care. Can you put my poster please? I want to demonstrate this. If you see under the status quo my colleagues are pushing, 20% is going to the insurance company for overhead and for profit.
▶ 1:43:35Sen. Cassidy: 80% for the health care that the insurance company believes that the patient needs. And she can't get it unless they agree. What we are proposing is that 100% goes -- senator wyden, we turn off your phone please?
▶ 1:43:59Sen. Cassidy: 100% goes to a patient driven account in which used for position or dentist -- physician or dentist. 100%. That is the choice we have. Can we put up the next one? Let me do a side-by-side of what we're talking about. To believe this, I'm asking that we move from our entrenched positions. Right now it is like trench warfare. If a republican proposed it, reflexively ever cuts oppose it and vice versa.
▶ 1:44:26Sen. Cassidy: If we are going to get something that works for you, sir, we have got to move beyond being a d or r into something that refers to american. Let me just side-by-side. Under the status quo, insurance companies got the money. Subsidizes premiums. The insurance company makes the decision. It doesn't lower health care costs. In fact, it contributes to higher costs.
▶ 1:44:52Sen. Cassidy: And it fuels fraud and unauthorized enrollment prayed for the record, I would like to submit an article showing there is a 230 -- 233 million dollar penalty levy upon insurance brokers fraudulently enrolling people. In zero premium policies.
▶ 1:45:05Chair Crapo: Without objection.
▶ 1:45:09Sen. Cassidy: What we are proposing, and I asked my democratic colleagues to think about it, just don't be entrenched. Think about it. The money goes and controlled by the patient, the family for real care, for the dentist or physician, that a patient makes the decision and it empowers the patient to lower the cost. Dr. blase points out that has been established by studies. It can be used alongside a bronze plan. We have heard criticism this would take too long to implement.
▶ 1:45:37Sen. Cassidy: I will point out that under the one big beautiful bill congress established already under law that bronze plans can use hsas. Let me make -- I am out of time, I will stop. Thank you.
▶ 1:45:51Chair Crapo: Senator whitehouse.
▶ 1:45:55Sen. Whitehouse: Thank you. We know a fair amount about what works and what doesn't work. One thing we know is fee for service does not work in the quicker we move off fee for service to value-based programs the better. We have some good experience after the obamacare bill with the affordable care organizations which have worked extremely well and enjoyed bipartisan support and been successful in red and blue states alike. There is one.
▶ 1:46:25Sen. Whitehouse: I think the other area is the specialists have too much control over what gets charged. And letting primary care doctors make more decisions and specialists make less about who gets paid what looks like it would reduce costs. We have a specific circumstance confirms that. A third thing that is real pain in the neck for people and also a cost driver is prior approvals.
▶ 1:46:54Sen. Whitehouse: Why would you let any insurance company require prior approval before they let a doctor go forward with care that you need? In particular, why would you do that when the doctor is not on fee-for-service? With a doctor is moved to value-based care? There is an argument in the fee-for-service world you can have doctors turning and turning and turning the meter to run this much money out of their patients as possible by doing this many things as possible but not curing the cause.
▶ 1:47:21Sen. Whitehouse: And so to have an insurer looked over that and say, wait a minute, this got out of hand, we want prior approval could arguably make sense. That is a separate argument. Once the medical practice is invested in trying to provide the best care at the most effective cost and they are aligned, why would they want to run the meter? They get penalized for being over expensive.
▶ 1:47:49Sen. Whitehouse: I would like to see us get rid of prior approvals for any value-based care and require prior approval from medicare before any insurance company can require any prior approval. Let's have prior approval for prior approvals and get that nonsense out of the system. That is a huge part of that 20% overhead cost which, by the way, something democrats fought to reduce to 20% against pressure on the other side.
▶ 1:48:17Sen. Whitehouse: But immediately, we have a problem of people who have an immediate concern for their livelihoods and for their financial well-being. I talk a lot the Mr. armitage, about a carla in rhode island who is a retired mental health counselor, 60 k annual income, does not qualify for medicare yet and gets her health insurance through our health insurance marketplace.
▶ 1:48:43Sen. Whitehouse: Her premium is going increase from $427 to $904. $112 -- 112% or $477 per month increase. That is an immediate problem that we can solve by extending the affordable care act credits while we have this larger discussion about how to bring things down. Mr.
▶ 1:49:04Sen. Whitehouse: Armitage, how do you feel about the problem of the individuals who are about to get whacked with 100% increase because congress has failed to extend these credits?
▶ 1:49:17Mr. Armitage: Well, I really appreciate the discussion about how we can improve health insurance in the future. How we can reduce the costs. I like what senator bennet had to say about nationalizing health care.
▶ 1:49:36Mr. Armitage: But my immediate concern is january 1 2026 when my payment, my wife and I are paying $443 a month and on january 1, we will be -- if we continue that, we will be paying $2224 a month. That is 500%. I would hope we can fix this problem that we have had in this country for a long time.
▶ 1:50:06Mr. Armitage: I used to have good insurance when I was a working carpenter. I could not continue that rate unaffordable to continue that after retiring. My wife had good insurance why she was working. She can't continue that after retiring, it is too expensive. And now we are faced with very expensive but we need time to make this transition I think and so --
▶ 1:50:32Sen. Whitehouse: You need a response before it quintupled. Behind Mr. armitage's problem is a problem with the health care system that will suddenly be starved of revenue. Nursing homes, hospitals, provider practices -- what does that look like behind their problem?
▶ 1:50:53Mr. Levitis: That is exactly right. Between these premium increases and what was in the reconciliation bill, we are seeing over $1 trillion of federal support coming out of the health care system going to providers which is going to mean more hospitals closing and other stresses and disruptions in the system.
▶ 1:51:15Sen. Whitehouse: Known. We are doing this and we know it. Please, let's get this fixed.
▶ 1:51:22Chair Crapo: Senator daines.
▶ 1:51:25Sen. Daines: Thank you. Thank you for holding this important hearing. At the center of this discussion today is the future of the expiring obamacare e covidra subsidies. It is important to note the democrats established these enhanced subsidies on a temporary and curly partisan basis during the pandemic. Under president biden and elected to have them expire at the end of this year.
▶ 1:51:54Sen. Daines: I remember distinctly going back in time went obamacare past president obama said it will lower premiums by $2500 a year and we have seen certainly a cause and effect, put in place obamacare and now we have seen health care the exchange which is about 70% of the american people receive their health care that way becoming completely unaffordable.
▶ 1:52:20Sen. Daines: Basically by the way we predicted that and sadly that has come -- we have got to do with this. The current situation is entirely in the democrats own making and republicans, frankly, both sides of the aisle should not perpetuate the mistakes that accelerated obamacare's failures. Debate over the temporary covid subsidies reveals a core underlying reality.
▶ 1:52:46Sen. Daines: More than a decade after its implementation, obamacare remains unaffordable, fundamentally broken, and increasingly reliant on massive recurring taxpayer bailouts. The expiring pandemic subsidies bear little responsibility in the 20% average premium increase in nongroup obamacare plans for 2026 but they do bear responsibility or the market,
▶ 1:53:20Sen. Daines: Increasing fraud and abuse, making obamacare more dependent on taxpayers, raising health care costs over the long term, and worsening our budget deficit. In fact, making the enhanced subsidies permanent would cost taxpayers nearly $400 billion, amounting to a massive transfer of taxpayer dollars to insurance companies. I believe any path forward on this issue requires reforms.
▶ 1:53:48Sen. Daines: Reforms that addressed the root causes of why -- why does obamacare perpetuate high costs and instability as well as the substantial growth and improper enrollment in fraud and wasteful spending?
▶ 1:54:08Sen. Daines: In addition to permanent structural reforms to obamacare, any path forward should expand access to and unleash premarket patient-centered solutions are president trump championed during his first term, provide lower costs, more control, and better care for individuals. I think both sides should agree we need that and we need it badly.
▶ 1:54:34Sen. Daines: Obamacare also represented substantial departure from the hyde amendment's prohibition on taxpayer funding of elective abortion. It is imperative that in reforms explicitly restore the long-standing consensus that taxpayer dollars should not subsidize and facilitate health plans that cover elective abortions. Dr.
▶ 1:54:59Sen. Daines: Blase, as you noted in your testimony, obamacare has worsened the quality of individual market health insurance, substantially raise premiums and deductibles, and cost taxpayers hundreds of billions of dollars. In your view, what structural reforms to obamacare would lower premium costs and reduce some of these inflationary pressures?
▶ 1:55:23Dr. Blase: I agree with your view that their deep structural problems in obamacare. The worst thing that congress could do is just perpetuate the inefficiencies for insurance companies for big hospital systems by further putting taxpayer dollars in place. We need to look at alternatives.
▶ 1:55:46Dr. Blase: You mentioned alternatives the trump administration open up for small businesses to join together and get the regulatory advantages that large businesses receive. Short term limited duration plants which are much more affordable and flexible. My family was enrolled on a short-term plan for a year. Within the aca structure itself, to look at the regulations that drive up the cost of premiums, one of them is the medical loss ratio, but the underlying subsidy structure is also inflationary.
▶ 1:56:16Dr. Blase: The subsidy holds the enrollee harmless from any premium increase. So insurers are pricing knowing the entire premium increase over time is borne by the taxpayer. That gives insurers enormous power to inflate premiums over time rather than provide value.
▶ 1:56:36Dr. Blase: Ultimately, we need to construct a system where the insurer is providing products that the patient values rather than just coming to washington and lobbying for more federal dollars.
▶ 1:56:50Sen. Daines: Thank you.
▶ 1:56:52Chair Crapo: Senator cantwell. Senator smith.
▶ 1:57:00Sen. Smith: Thank you. So there have been lots of conversations today about what we can do theoretically to lower health care costs. I am all in on having these conversations. It is also clear from this hearing that republicans really don't like obamacare. Even though most americans strongly support the insurance reforms in obamacare and what it has done to get more people covered.
▶ 1:57:29Sen. Smith: But I think we need to be real, colleagues, that where we are right now after all this back and forth. It is clear to me there is one way and there is only one way that we can keep americans health insurance premiums from skyrocketing come january 1, and that one way is to extend the affordable care tax credits. That is the only option on the table. I think it is a good option.
▶ 1:57:57Sen. Smith: Democrats have been ready to do this for months but president trump and democrats are saying no. In fact, last night president trump said on true social all in capitals, the only health care bill I will support or prove is sending money directly to the people with nothing going to the big fat insurance companies. Let me just dive into that for one minute. Mr.
▶ 1:58:16Sen. Smith: Levitis, the president republicans proposing as best I can tell sending money to americans and basically saying forget about insurance, we're just going to send you money and you can buy your health care. So what would that look like if we actually did that and people who are not worried about their health care end up leaving the insurance markets?
▶ 1:58:37Mr. Levitis: It would mean two things. First it would mean two things. It would mean people like Mr. armitage could afford the health care he needs. It would mean that premiums went up for everyone.
▶ 1:58:52Sen. Smith: It would increase costs? Right. And Mr. armitage, I appreciate your testimony and thank you for being here. You and your wife have spent years paying off your medical debt. If you got a check for $6,500 or more than that would that have solved your issues with medical debt and make your problems magically go away?
▶ 1:59:18Mr. Armitage: Did you say 5500?
▶ 1:59:22Sen. Smith: 6500.
▶ 1:59:25Mr. Armitage: It would be a down payment. Insurances expensive. Without any help it would be a few months. And then what? We are right back to ground zero.
▶ 1:59:39Sen. Smith: And then you are faced with figuring out, you cannot afford your life.
▶ 1:59:42Mr. Armitage: In a couple of months maybe I do not need much medical care, though I am basically turning the money right back over to an insurance company, back to ground zero with no help and no ongoing protection or insurance affordability.
▶ 2:00:00Sen. Smith: Thank you for that. And there is another issue that has not been discussed much today, but I bet it would come as a big surprise to a lot of folks as you listen to this hearing that behind-the-scenes part of what is going on is a big debate about abortion and you might be like I'd have not heard much about this topic.
▶ 2:00:24Sen. Smith: What is really happening is that donald trump and senate republicans are saying that we will not agree to lower your health care premiums for millions of americans, and less they can get aban on privates insurance covering abortion care. Let me go to you on this because I think there is a lot of misinformation.
▶ 2:00:45Sen. Smith: What is going on here is that they are saying that we will not help you afford your health insurance and less we can mandate what kind of health insurance you can buy with your own money. Under federal law could federal funds be used to pay for abortion care?
▶ 2:00:59Mr. Levitis: They cannot.
▶ 2:01:01Sen. Smith: It is under federal law and it limits what health care that federal women can get from other federal programs, do I get that right?
▶ 2:01:10Mr. Levitis: That is right.
▶ 2:01:12Sen. Smith: What about federal tax credits, can they be used to pay for abortion care?
▶ 2:01:18Mr. Levitis: They cannot.
▶ 2:01:19Sen. Smith: Is it fair to say that the affordable care act already prohibits federal funding for abortion?
▶ 2:01:27Mr. Levitis: Yes. The aca could not be clear about that.
▶ 2:01:31Sen. Smith: Is there any way which -- that an extension of these tax credits to help americans afford health care to avoid these doubling and tripling of costs, is there any way that that has any impact on what federal law already says about tax dollars and abortion?
▶ 2:01:47Mr. Levitis: Not that I could see.
▶ 2:01:49Sen. Smith: I think this is important for people to understand. What is going on is this extreme anti-abortion susan b. Anthony list where there is a lot of influence and they are working to use this health-care crisis is another way of getting basically a national ban on insurance paying for abortion care and a national ban on abortion pot coverage even if people are paying for it with their own money. Thank you.
▶ 2:02:17Chair Crapo: Senator johnson.
▶ 2:02:20Sen. Jones: And what is really going on is a complete state of denial in terms of the reality of the damage done by obamacare. I am happy to work with anybody on the other side to repair the damage done and transition to a system that actually works. That lowers health care cost and premiums. Here is the sad reality of obamacare. The faulty design has increased premiums.
▶ 2:02:47Sen. Jones: There are all ways of looking at this with different premium rates. This is a 40-year-old enrolled in a silver benchmark plan. The state-by-state increase of the gross premium. The gross premium, that is a metric you have to look at on average. Those have increased 169%. Four point three times the rate of inflation at 3.9%.
▶ 2:03:15Sen. Jones: It is obamacare that has driven up the cost of premiums, and has made it unaffordable. But, I have solved a lot of problems in my manufacturing backgrounds, the first step is solving a problem is admitting you have a problem. And then properly diagnosing its . So let us talk about the reality of the situation. You can put it down.
▶ 2:03:41Sen. Jones: Is it true that obamacare really lowered the premium, the cost of premiums by $2500 a year, did that happen? Short.
▶ 2:03:52Mr. Levitis: Sure. The affordable care act has lowered the cost of health care.
▶ 2:03:57Sen. Johnson: It has not. I asked the question didn't lower premiums by $2500 a year per family and the answer is it did not. In your testimony you said that in individual making $23,000 would have about $1000 a year, that is the original design, and that is 4.3% of the individual's income. That is how it was originally designed.
▶ 2:04:23Mr. Levitis: Originally it did not provide subsidies for people like Mr. armitage.
▶ 2:04:28Sen. Johnson: That is people making 400% over the poverty line. What is happening is the subsidies are not going away and our colleagues are making it seem like all of these subsidies are going away. We are just going back to the incredibly flawed original design. Again, that person making $23,000 as the original design. He was going to pay 4.3% of his income for a premium.
▶ 2:04:58Sen. Johnson: That means somebody else is picking up 96.7 percent, correct? And the american taxpayer is picking up 95 or whatever, 95 or 96% of the premium.
▶ 2:05:10Mr. Levitis: Zero premium coverage is very common.
▶ 2:05:17Sen. Johnson: You are not admitting reality. What percent of income do you think you ought to be paying for health care. Because I believe and I do not know your income but it had to be over 400% of the poverty line because your subsidy is going away now. You had a subsidy and now you get none, correct?
▶ 2:05:37Mr. Armitage: As of january 1.
▶ 2:05:39Sen. Johnson: That is because you and your wife are above 400% of the poverty line so about 80 406,000 dollars. What you told me and you told this committee that you paid $443 per month and $5,300 a year, and that was about 6.3% of their income. That is the way obamacare is designed. People had to have skin in the game.
▶ 2:06:04Sen. Johnson: I do not think it is unreasonable to ask people to pay 6% or up to and obamacare went up to 9.5% and if you are above 400% of the poverty line, but we will go back to, the way the democrats cause this to expire, they are expecting people at 400% of the poverty line to pay 9%, do you think that is unreasonable or do you think it is completely unreasonable.
▶ 2:06:31Mr. Armitage: I would have to go back and do the math you are talking about in my situation, but right now, it is going to 500% of what I am paying now.
▶ 2:06:42Sen. Johnson: I have a great deal of sympathy for people who are lulled into accepting this, but the root problem is that obamacare has caused premiums to skyrocket because they made about 7% of the population bear the full brunt of covering people with pre-existing conditions. They rather than modify the high risk pools to do that, they did away with them and now we are stuck with this.
▶ 2:07:10Sen. Johnson: Isn't the root cause the third-party payer system? And we have taken consumerism out of health care. We have taken all of the benefits of a free market system where people actually shopping and paying attention to what people costs and automatic price transparency. We have to bring consumerism and competition and not over blow it in a federal health care system that is obviously causing a problem.
▶ 2:07:34Mr. Holtz-Eakin: That would be a huge improvement. >> just very quickly, my constituent is being told he gets -- he is making too much money to get health care and I disagree.
▶ 2:07:46Sen. Johnson: That is not what I said. >> senator cantwell.
▶ 2:07:52Sen. Cantwell: , I am concerned that we only have 13 working days until december 15. I just want to emphasize that as we think about the challenge that we face. I do think we will have differences over the affordable care act, and the question is not what can we do to make all of those changes to the affordable care act and the question is what can we do to make sure that this constituency group is not left without insurance, and then raising
▶ 2:08:23Sen. Cantwell: Everyone else's rate. I do like that the affordable care act did cut the uninsured rate in half down to 7% in 2023. My state it is down to a 4% and that is partially because of the ways that we implemented the law. The affordable care act did expand medicaid, and it did increase preventative care and cover people with pre-existing conditions and it lowered that uncompensated care rate.
▶ 2:08:54Sen. Cantwell: There are many aspects to the affordable care act. I would like to draw on one thing that has not gotten enough attention which is the basic health plan, a program within the affordable care act, that allowed people at 200% of the federal poverty line to insurance carriers to bundle up that population -- states to bundle up the population, and deliver more affordable health care. I do not know if they can see that.
▶ 2:09:21Sen. Cantwell: The individuals in new york, minnesota, oregon and the district of columbia are now with more than one million plus enrollees are saving billions of dollars. For example, if you buy the silver plan in new york it is $9,500, if you buy the bhp plan it is 75 hundred dollars which is 25% savings.
▶ 2:09:46Sen. Cantwell: Currently there are 15 point 15 point million people at or below the federal poverty line who are purchasing lands on the exchange. So if there was a way, I do not think if you can get that done in 13 days but if you was a wet -- if there was a way to make that change and move that convert -- that population to the bhp plan dolls or savings of $33 billion. So, it is a more efficient way.
▶ 2:10:16Sen. Cantwell: According to your 2024 urban institute report, that I understand you contributed to the basic health plan could reduce the number of uninsured up to 71% and decreased spending by about $1600 per person. Do you believe that this is something that we should just look at to lower health care costs and premiums overall?
▶ 2:10:38Mr. Levitis: Thank you for the question and I do agree. I do a lot of work advising states on options for expanding health coverage and controlling costs. They are finding that the basic health program is a great option that gives them the flexibility to reduce costs as you describe, and also to create a more seamless consumer experience that keeps people covered.
▶ 2:11:02Sen. Cantwell: But there is no way to get that implemented in 13 days, right? So how do we bridge the gap? The reason why this plan made sense because if you think about above the medicaid rate you have a population hard to serve and insurers cannot find an affordable way to put that into the market. But when you bundle up a population and say I will give you asked -- access you buy in bulk and you get a discount.
▶ 2:11:29Sen. Cantwell: We gave the discounts, and now as I said, it is cheaper by thousands of dollars and we could be saving billions of dollars instead of doing so -- for at least some portion of the population. I think Mr. chairman it is a ranking member of whether you would bump that number even 5% more to 250% of poverty and may be included even more people as a way to really erase -- erase the uninsured rate.
▶ 2:11:58Sen. Cantwell: Do you think that it is an important goal for us?
▶ 2:12:00Mr. Levitis: Absolutely. Reducing the uninsured is a key goal, and I am interested in that idea of extending the basic health program to higher incomes which could be a way to smooth out some of the seams in the health care system.
▶ 2:12:17Sen. Cantwell: For expensive states and I would consider the expense -- the seattle area very expensive in new york very expensive, we have done a back of the envelope calculation before that if you raised it to $250 and did it for very expensive states 300, you would be driving down the uninsured rate.
▶ 2:12:41Sen. Cantwell: 85 or 86% of americans would be covered, and it would be a good way as you said to smooth out that, that end of the market. I look forward to talking with my colleagues about this.
▶ 2:12:55Sen. Cantwell: But I will work with anybody to try and get a continuation of a plan to make stability in the market at least for the next year or two while we implement and get these ideas that can lower this cost shared by the federal government and realize those benefits, but still deliver affordable care.
▶ 2:13:14Chair Crapo: Thank you. Senator hassan.
▶ 2:13:18Sen. Hassan: Thank you for this hearing, and I will note that there has been a lot of bipartisan work in this body that will help lower health care costs and a lot of it was in a package that we were set to vote on last december but then elon musk said he did not want to do it for your side of the aisle to do it and we did not have the opportunity. I hope we can get back to some of those ideas that senator cantwell was talking about.
▶ 2:13:45Sen. Hassan: In the meantime, we have to talk -- focus about what our constituents are going through facing higher costs. I want to say thank you to the witnesses for being here. I want to start with a question to you, we are more than two weeks into open enrollment and granite staters are logging onto healthcare.gov and seeing that they their out-of-pocket costs for premiums have increased by thousands of dollars.
▶ 2:14:11Sen. Hassan: My republican colleagues for weeks and insisted that they would not work on addressing the issue so now the government is reopened and it is critical that we come to the table and find a bipartisan path to enhance -- to extend the enhanced tax credits because the stakes could not be higher. We heard from laura, who is self-employed and whose monthly premium is surging from $140 per month to nearly $500 per month. Laura told me she will not be able to afford health insurance next year.
▶ 2:14:43Sen. Hassan: Mr. r montage, what are the difficult decisions that your family is considering due to the enhanced premium tax credits being taken away?
▶ 2:14:51Mr. Armitage: Well, my wife and I are on a fixed income. So, we have worked out and are continuing to work out budgets in order to live a decent life and have a little extra money to pay for the things that come up.
▶ 2:15:14Mr. Armitage: So, overnight, 500% increase in our insurance payment is a major blow to daily life, expenditures and everything. If you could imagine having a car payment that goes up 500% the next day, would you want to keep that car? You would be scared to use it, probably.
▶ 2:15:38Sen. Hassan: That is well said, especially at a time when costs are rising for necessities for all americans across the country. So, I appreciate your testimony today and shining a light on what kind of choices that people are making. In just six weeks, many of our constituents will go over a financial cliff and no longer be able to afford the health insurance that they need to keep their families healthy.
▶ 2:16:06Sen. Hassan: That is the reality on the ground in the united states of america right now. Congress has an opportunity to solve this problem in the next few weeks. If republicans come on the table to extend the premium tax credits. Can congress still lower health insurance cost for this coming year, 2026 if it passes an extension of the enhanced aca tax credits by mid december?
▶ 2:16:29Mr. Levitis: Thank you for the question. Yes it can. And the reason is simple, both the federal and state marketplaces have already built the I.t. For the scenario where the premium tax credits already come back. They have not built other scenarios with different things you might do. Turning it back on they are ready to do.
▶ 2:16:53Sen. Hassan: Step-by-step it would be turning on the switch that said -- that tells them how to account for those premium tax credits.
▶ 2:17:01Mr. Levitis: And they have known about this possibility for months and years and they have been preparing for that contingency.
▶ 2:17:08Sen. Hassan: Another question, my republican colleagues has raised various broad health-care ideas, and the immediate crisis faced by families is the out-of-pocket insurance costs from the expiration of the premium tax credits. Beyond extending the tax credits, have you seen any other realistic proposal that could deliver relief on january 1?
▶ 2:17:31Mr. Levitis: I have not, and in some ways it is just an I.t. Question. Building the new I.t., testing and deploying it would bring us past open enrollment.
▶ 2:17:43Sen. Hassan: To my colleagues on the other half -- other side of the aisle I hope we can extend the tax credits on 2020 six. There are lots of bipartisan ideas to lower the overall cost which is an important thing to do for any number of reasons. The immediate concern is the out-of-pocket costs at a time of high inflation where day-to-day needs are out of reach for so many americans. I hope we can find a way forward. Thank you.
▶ 2:18:12Chair Crapo: Thank you. Senator cortez masto.
▶ 2:18:18Sen. Cortez Masto: I appreciate the panelists and thank you for being here. The theme is considering meaningful solutions to rising health care costs. As my colleagues have stated, we are six weeks away from spikes sitting millions of americans and having a devastating impact to them and their families. We know what needs to be done to avert the upcoming cost crisis and that is to extend the premium tax credits.
▶ 2:18:46Sen. Cortez Masto: My colleagues across the aisle, they say they will negotiate with us on health care and I look forward to that and I hope that is the case. I know some republicans I am talking to are taking the opportunity seriously and are willing to work across the aisle, but I have to stress that open enrollment is happening now and families are questioning whether they can afford health insurance next year.
▶ 2:19:10Sen. Cortez Masto: They deserve action now, and as we work towards a long-term goal of addressing the health-care care crisis. Mr. levitis? Let me start with you. If the current aca premium credits expire, premiums rise for millions in january. Some bipartisan ideas are floated around like ensuring that tax credits do not go to high earners team within reach.
▶ 2:19:38Sen. Cortez Masto: In your view, which reforms can be made in the short term time before we destabilize our markets?
▶ 2:19:45Sen. Cortez Masto: Thank you for the question. I believe that the only option to help people like Mr. armitage that can be in place for this year is an 6 -- is extending the enhancements. Even a change like changing the parameters of the premium tax credit would require building new systems, changing them and deploying them. That could be done, but it could take weeks or months and by that time the open enrollment period would be over.
▶ 2:20:13Sen. Cortez Masto: There is an opportunity to extend it for a year or so individuals like Mr. r montage and in my state will have access to health care when they needed, but we can also look term -- look towards long-term or full reform goals? Let me ask you this, let me take this back. I have heard a lot of proposals, and one has been promoted over social media.
▶ 2:20:44Sen. Cortez Masto: And let me ask you a very -- very honestly to respond to this. What a check in the mail guarantee coverage of pre-existing conditions?
▶ 2:20:55Mr. Levitis: It would not and it would not nearly be enough to avoid catastrophic health care costs with people with pre-existing conditions?
▶ 2:21:03Sen. Cortez Masto: Would sending checks directly to consumers reduce underlying health care costs for individuals?
▶ 2:21:10Mr. Levitis: It would not do that. There is evidence that things like fsa's increased health care spending.
▶ 2:21:17Sen. Cortez Masto: So, just to be clear, and let me open it up for anyone else on the panel, we are six weeks away from major premium hikes. Do you see risks of trying to launch an entirely new subsidy structure in just a few weeks. Does everyone see the risk of that?
▶ 2:21:47Mr. Blase: Just to put the issue in perspective the underlying subsidence -- subsidies continue after this year and the vast majority of employees.
▶ 2:21:56Sen. Cortez Masto: I am talking about reforms being proposed and even though one from the administration. They are total reforms, can they be done in the short period of time. That is my concern and that is what we are saying. Individuals will lose health care. This is a cliff. So, we have a responsibility to at least provide them with some sort of offramp if we are going down that path.
▶ 2:22:23Sen. Cortez Masto: And that means we extend these for a year or so people can access health care, and then look and study the reforms that we think are necessary to address the concerns we are hearing but it should be a thoughtful process and not putting people over a cliff. That is a concern I'm hearing from my colleagues. I just want to finally say that I look forward to working with my colleagues and I think there is something that can be done. We have done work to address health care I appreciate it.
▶ 2:22:52Sen. Cortez Masto: Now is the time to get it over the finish line and work together. Thank you.
▶ 2:22:56Chair Crapo: I agree. Senator barrasso.
▶ 2:23:03Sen. Barrasso: I appreciate your efforts as you and I know that since 2009, 15 years ago, I was warming that obama -- I was warning that obamacare would increase premiums. Now, families and wyoming are being hit with premium increases of up to $2000 a month. I got a text from a rancher who finds himself in that situation.
▶ 2:23:27Sen. Barrasso: I never supported any effort to expand this broken system, including the creation or extension of the bite covid bonus placement -- payments that they put in place and they chose the end of this year for the deadline because they were supposed to be temporary due to covid. What we are seeing on the results and they speak for themselves. Democrats would like families to believe that these skyrocketing premiums are the fault of republicans and that cannot be further from the truth.
▶ 2:23:54Sen. Barrasso: They were predictable, warned about and the direct consequence of the law that democrats wrote in past 15 years ago that not a single republican voted for. Of course, that was a law that promised affordability and failed completely. So let me ask you, if these temporary subsidies were a solution, but I have premium skyrocketed after democrats poured billions into these covid bonuses, what did that money fix?
▶ 2:24:20Mr. Blase: Thank you. I agree that the aca has deep underlying structural problems. And the subsidies just exacerbate it. They put more taxpayer fuel on a regulatory and subsidy structure that is raising premiums and raising prices and creating a much more inefficient health care sector.
▶ 2:24:46Mr. Blase: Some of the inefficiencies even bleed over to the employer market and some of the rising premiums of the employer market or from problems with obamacare.
▶ 2:24:55Sen. Barrasso: Brian and then going to dog with the same question. 15 years I've been warning that obamacare will devastate access to care in rural america. Many of them rural and frontier counties there is only one insurer left the hospitals are closing. How can a family exercise choice when there is only one insurer or no insure on the exchange at all?
▶ 2:25:20Mr. Blase: They cannot if they do not have a choice of any. What they need is additional options. States can put in place farm bureau plans and we have seen about 15 states now with a lot of fog -- farm bureau selling coverage that can benefit rural residents. Short term limited duration insurance offers value in rural areas.
▶ 2:25:47Mr. Blase: They have much broader networks of doctors and hospitals that take the coverage that do not accept aca coverage.
▶ 2:25:52Sen. Barrasso: Do you want to add anything else?
▶ 2:25:55Mr. Holtz-Eakin: You have to find cooling mechanisms and brian outlined several and there are others that we put our heads together.
▶ 2:26:02Sen. Barrasso: Are there reforms that could actually bring competition back into rural america?
▶ 2:26:09Mr. Blase: I think the one big beautiful bill by addressing major structural problems within the health care sector and government health care programs put in place the rural hospital transformation fund, and that is $10 billion a year going to rural -- to rural areas within states that can improve access to care, and that is a real benefit of the reconciliation bill.
▶ 2:26:38Mr. Blase: And, then just work on expanding as many options as there are and empowering patients with more control over financing.
▶ 2:26:45Sen. Barrasso: We have been warning about obamacare handing control of the health care system to insurers instead of the patients and providers, have this consolidation increase costs, or for patients and taxpayers?
▶ 2:27:02Mr. Holtz-Eakin: In general consolidation increases the potential for market power and abuse of the market power and that is something that we need to watch in all sections of the economy including the aca. And generally find more consolidation when there is an excessive regulatory structure that the larger form -- firms can manage and take advantage on and that will lower the barrier of entry.
▶ 2:27:26Sen. Barrasso: I looked into the numbers and I see high subsidies and we are one of the highest subsidized states. The biden bonuses on top of that, we have one third of the people on obamacare who pay zero. They have zero premiums. Can you talk about the zero premiums and the schemes that have been devised under this biden covid bonus?
▶ 2:27:49Mr. Blase: The availability of fully subsidized plans have created a recipe for a massive improper enrollment schemes throughout the country. Yesterday doj convicted two individuals running one of those schemes to $233 million. We have an estimate that there is more than 6 million improper enrollees.
▶ 2:28:13Mr. Blase: And one of the best pieces of evidence that we have of the massive increase in improper enrollment is that 40% of fully subsidized enrollee is did not use their health plan a single time. No doctor visit, prescription or lab test, and that is a very unusual with people with health insurance. Most people use the plan every year because so much goes through health insurance.
▶ 2:28:35Sen. Barrasso: Thank you.
▶ 2:28:37Chair Crapo: Senator warren.
▶ 2:28:40So -- Sen. Warren: Let us face it, health care in america is already too expensive. We have monthly premiums, deductibles, co-pays, medical bills and health care costs will crush families and it will cost an average of $27,000 for a family of four. Donald trump ran for president saying he would lower costs on day one.
▶ 2:29:10So -- Sen. Warren: And what has he done to help get health care costs under control. He worked with the republicans in congress to pass the big beautiful bill, which rips away health coverage for 15 million people so that he could pay for a tax increase -- tax cuts for billionaires and giants corbyn 8 -- corporations. This month's millions of americans are learning that there premiums are going to skyrocket in january.
▶ 2:29:38So -- Sen. Warren: All because republicans were happy to extend tax cuts for amazon and jeff bezos. But not tax cuts for families struggling to afford health care. Democrats are ready to help solve the health-care crisis that republicans have created. But evidently donald trump is too busy trying to coat the oval office in gold leaf.
▶ 2:30:07So -- Sen. Warren: So, you have helped draft and implement health insurance policies. So tell me, how much more can families with aca coverage have to pay in premiums next year? On average?
▶ 2:30:19Mr. Levitis: They will about double.
▶ 2:30:24Sen. Warren: Could you put a dollar figure for a 60-year-old couple making $85,000? That is one of the ones we have talked about a lot?
▶ 2:30:34Mr. Levitis: On average premiums will increase by about $1000 for people who are over that cliff like Mr. armitage and that will increase many thousands of dollars.
▶ 2:30:51Sen. Warren: The number I have seen is $24,000 in additional costs making $84,000 a year and that is right?
▶ 2:31:00Mr. Levitis: I would believe it. So we have premiums skyrocketing. Trump's focus on what is really important and that is a new ballroom for the white house. Will everyone with a coverage pay higher premiums next year or just a handful of people?
▶ 2:31:19Mr. Levitis: >> it is everyone because with the reductions to the premium tax credit coming in, for everyone else it goes down even for people who pay for insurance on their own quit has led to a spike my premiums.
▶ 2:31:36Sen. Warren: My understanding is it is not just people who have aca coverage. 100 54 million americans with employers sponsored insurance are going to face the biggest premium increases in 15 years. Does that sound right?
▶ 2:31:55Mr. Levitis: On grow and they are too high. There are some new factors in play this year, like in insurance filings there has been talk about the tariffs and how that has increased cost for inputs and how that has flowed through to all insurance, so not just.
▶ 2:32:16Sen. Warren: So it is going up for everyone and donald trump says the ford ability crisis is a con job. These price hikes are obviously real. They are not just falling from the sky. It is a policy choice the republicans make. Let me ask one more question.
▶ 2:32:36Sen. Warren: If we permanently extend the aca tax credits that lower the cost of health insurance, how much money would americans save next year alone?
▶ 2:32:52Mr. Levitis: I believe it is approximately 25 billion dollars or $30 billion but that is in premiums. You need to think about also people who now have health insurance who otherwise are going to have crushing costs so it is even bigger than that.
▶ 2:33:09Sen. Warren: It will cost about $23 billion to be able to extend this help to american families. Donald trump could round up $40 billion for argentina, but he not -- cannot round up about half that much for american families who are struggling to pay for health care. I think our health care system is broken, badly broken.
▶ 2:33:34Sen. Warren: If republicans want to get serious about lowering costs and taking on corporate greed, count me in. But republicans continuing to put forward the concepts of a plan just so they can crush the aca, which they have tried to do 70 times already, is not going to work. Some kind of savings account that may be roles in a year from now. Families are struggling now and they need help now.
▶ 2:34:05Sen. Warren: Donald trump may be absorbed on having bulldozers tear down the east wing and put up a new ballroom. American families are facing real cost increases and it is time for congress to respond. Thank you, Mr. chairman.
▶ 2:34:18Chair Crapo: Senator marshall.
▶ 2:34:21Sen. Marshall: I ricard -- recall sitting in the doctor's lounge after obamacare was passed and there were two conclusions in that lounge. Number one is the insurance companies have written this bill. We said that because there was going to be an estimate of $50 billion of subsidies going directly to the insurance companies. Today, that has grown to $150 billion a year so american taxpayers are paying insurance companies $150 billion a year.
▶ 2:34:53Sen. Marshall: The other conclusion was that this overregulation would lead to consolidation of the industries. The same thing was happening in banking in dodd frank. We knew we would take nurses off the floor and bring them into the data entry positions as well. We knew the small doctors offices could never take on all this overregulation so here we are 15 years later and we understand obamacare has been an abstract failure.
▶ 2:35:23Sen. Marshall: I say this because premiums alone cannot going up to hundred percent in many cases, no one can argue this. The premiums the aca has led to premium prices -- I draw attention to specifically going from 2020 to 2025, how premiums take off. Why? We started adding in these enhanced subsidies as well and insurance companies jacked a premiums to go along with that.
▶ 2:35:54Sen. Marshall: Just because you have obamacare does not mean you have access to care. If you are a single person with a deductible of $5,000, if you are a family of four with a deductible of almost $15,000 and you are making less than 400% of the poverty level, there is no way that is access to care. So I came here saying that there are three principles. This is 2016. Iran on fixing health care in congress. I said we need to do two things.
▶ 2:36:25Sen. Marshall: We need to make patients consumers again. We need to promote transparency price tags. If you did those things, if you made patients consumers again, you resented consumers with options that innovation would occur again. No one could do innovation now because there are so many guardrails around what you can do or not do. We spent about four years promoting that and now it is catching on but the other thing I did was I read a book called the singapore model.
▶ 2:36:56Sen. Marshall: I was intrigued with how they took federal dollars and put them in an hsa account and even more exciting was if you kept two years of premium deductibles, you could eventually turn them into a retirement plan so I tried to share this marketing concept of taking federal dollars and putting them into an hsa like account as opposed to giving them to insurance companies.
▶ 2:37:24Sen. Marshall: That would make patients consumers and you add a price tags bill and all of a sudden you have a win-win opportunity and innovation is going to follow. What we will be offering as republicans are real solutions. We need to address the fraud. The simplest thing is even if a person is paying five or $10 as opposed to zero dollars, that is going to cut back on fraud.
▶ 2:37:55Sen. Marshall: People talk about hsa accounts going toward the consumers. I am really excited about reintroducing some type of reinsurance state that at the state level.
▶ 2:38:11Sen. Marshall: Senator collins has legislation so their successful reinsurance programs out there and one of our signature bills is the price -- patient deserves price tags bill, also part of the package that would bring down premiums as well. I will take a deep breath here. I covered a lot of items, but do you believe if we make patients consumers again and give them price tags and transparency, do you believe innovation would follow in the premiums can come down again?
▶ 2:38:51Dr. Blase: Rather than a health system that is show -- so insurance company dominated. One of the problems is how much power gave to health insurance companies. In addition to subsidies, it put in place a tax penalty for people that did not buy their product. It was a giant gift to health insurance companies and we need to move the power away from giant health insurance companies back to individual patients and families.
▶ 2:39:21Sen. Marshall: Senator sheehy has legislation that would make it easier for small business to get employees into the aca and hopefully have a more healthy pool of people in the aca rather than the opposite of what is occurring. I will end with this.
▶ 2:39:41Sen. Marshall: I hope my friends across the aisle share the same goals that we do, that we want to make health care affordable and accessible to everyone and we have to talk -- stop talking about how we transfer premiums from consumer to federal government. The solution where we ship the cost from the consumer to the federal government is going to continue to inflate insurance premiums. I yield back.
▶ 2:40:15Sen. Marshall: >> Dr. holtz-eakin, just taking a trillion dollars out of health care help the american people or hurt the american people?
▶ 2:40:29Dr. Holtz-Eakin: Depends on how you take it out. If we had higher value care that didn't have excessive procedures and produce high quality outcomes with this procedures, that is the goal for everybody.
▶ 2:40:40Sen. Lujan: Do you support delimiting federal dollars with medicaid? It is not a no. Just taking a trillion dollars out help or hurt the american people? >> weed to reduce the federal subsidies for inefficient health care.
▶ 2:41:06Sen. Lujan: This is not a new issue of skyrocketing costs with health care premiums. Everyone has known about this for a long time. I was surprised to see the numbers the suggested three in four beneficiaries of these tax credits are from states that voted for donald trump. I'm surprised by that, that I'm not seeing my republican colleagues lead to this charge to make sure people are not going to see sticker shock. That aside, Dr.
▶ 2:41:32Sen. Lujan: Blase, are you ok with junk plans coming back and being sold to the american people? Do you know what they are? Are you ok with the american people being sold by insurance companies an insurance policy that says even though you might have cancer I will cover everything but your cancer? Are you ok with that?
▶ 2:41:54Dr. Blase: I'm absently not ok.
▶ 2:41:56Sen. Lujan: Are you ok with that? >> no.
▶ 2:42:00Sen. Lujan: I hope we can agree we should get rid of junk plans because president trump brought them back. There used to be disclosures on state insurance websites that said the plan in your state might not cover ambulatory care. In my not cover anything because it is a gimmick. They want to look at this premium prices. Go back and look at what happened when you got rid of these lemon laws.
▶ 2:42:29Sen. Lujan: You can buy an insurance plan if it does not cover your cancer, if you hurt your right foot in my cover that but not if you hurt your left foot. I hope as we talk about this my republican colleagues are willing to do something my house republican colleagues offered and say extend the tax credits and let's work on reforms and policy. My republican colleagues are in charge of the house, senate, and white house. He voted against the ford will care act in 2009.
▶ 2:43:00Sen. Lujan: They lead efforts 80 times to eliminate the affordable care act. I might be wrong but a couple votes here and there. Republicans during president trump's first term said they would appeal the reportable care act and that got sticky play clay so they said we are going to repeal and replace. Are any of you aware of a replacement plan put forth that has been marked up in committee?
▶ 2:43:25Dr. Holtz-Eakin: There was a replacement plan that passed the house of representatives. >> not currently. >> I am not currently aware. >> definitely not aware of it.
▶ 2:43:38Sen. Lujan: I am not, either. I sat on the U.S. house of representatives. I'm not aware of one. I pretty eight the conversation today because we should be talking about reforms and making health care more affordable and that way we can make sure we get you help. I survived a stroke three years ago. I'm alive and well today because of access to care.
▶ 2:44:08Sen. Lujan: What happens of people lose coverage? There sticker shock people are trying to figure out. I would hope affordability means something to folks and that means people should be able to afford what they are getting. If people -- if someone had a stroke like I did, you are dead. You cannot get to the hospital. If you are lucky, you will lose your home because the costs are ridiculous. Let's work together here.
▶ 2:44:36Sen. Lujan: There is ability to compromise and figure stuff out. Get rid of the junk plans. We should do that right away. Find a republican cosponsor to get rid of junk plans. Let's tell the merrick and people we will be honest about what you get covered in the last thing out to say thank you for you being here and having the coverage just -- kirsty speak up. We need more people like you, not just here as witnesses. We need more people like you elected to senate.
▶ 2:45:07Sen. Lujan: My father died because of a bout he lost with stage iv lung cancer. My dad was an expert with temperature fluctuation. He never smoked in his life. But he died from this horrific disease. I want to thank you for the courage to be here and be willing to share your story. What everyday americans are going through -- thank you for having the coverage -- courage to be here.
▶ 2:45:37Sen. Lujan: Let's find a way to do some of the stuff. If anyone wants to learn how I survived my stroke, I would be happy to share with you but access to quality care matters. It saves lives. We can make sure we allow more prevention to be involved in our lives. We can catch this early in our lives, we will be healthier. There should not be if I there either. I yield back.
▶ 2:46:11Sen. Tillis: Thanks to the witnesses for being here. A special thanks to Mr. armitage. This is not usually your day job. I am disappointed about the discussion today because none of this has to do with anything that is the least bit coherent strategy on how to drive down health care costs. None of it. We seem to want to pick the villain of the month. Now it is the insurance companies.
▶ 2:46:41Sen. Tillis: Maybe some should be held accountable. Maybe some are taking advantage. We like flogging pharmaceutical companies. A lot of people think pharmaceuticals are the reason health care is going up. Then we had the health care providers because they are consolidating and demanding a higher price because there are fewer places to go. That is not where we as policymakers should be. We should understand there are structural problems.
▶ 2:47:11Sen. Tillis: Some of which were initiated by the affordable care act. Some are just unchecked and not managed by public policymakers since 2013, 2014 when policies were available so I'm only going to be here for 410 more days so I'm not sure if I'm going to get an opportunity to take a bite at that apple but if people in the senate and congress want to get serious about this they need to understand that insurers,
▶ 2:47:42Sen. Tillis: Pharmaceutical companies, health care providers, government, and inputs to these industries, and the pharmacy benefit managers, need to go to the barbershop and take a haircut. But instead we do this piecemeal political gotcha, goldleaf in the white house, a cheap shot for my side to be fair. We get nothing done.
▶ 2:48:07Sen. Tillis: The only thing that has occurred since 2014 is prices keep going up. We also had since the enhanced subsidies were put into place, a pandemic. It had an impact on inflation.
▶ 2:48:25Sen. Tillis: If my memory serves me correctly, I think the key mill to impact on broad inflation was over 20% over the period of time since the enhanced subsidies were put into place. That by itself tells you generally speaking everything is going to go up at least that much. It has gone up more than that, but I do not feel like we are having the right kind of discussion with temperatures lowered. Obamacare is great. Obamacare is horrible.
▶ 2:48:55Sen. Tillis: The fact is you're looking at somebody who became speaker of the house because of how poorly obamacare was implemented in north carolina. Change the politics of north carolina because it was poorly conceived and did not take a single republican vote or any kind of input on how the bill actually -- a program that would address the root cause of the problem. A lot people wanted to produce better options for people like Mr. armitage.
▶ 2:49:28Sen. Tillis: We failed. We have to stop having this cross and talking past each other. We had $18 million in 2014 when obamacare started offering exchanges. Now we are approaching $35 billion of which comes from enhanced subsidies. I think it would make sense not to put the millions of people who have come reliant on a fundamentally flawed program in a lurch by not extending subsidies that exist today.
▶ 2:49:56Sen. Tillis: I also think it would be malpractice if we did not set into place a scenario over the next two or three years where they were gone. But to provide a reasonable glide path for businesses and other solutions to take up the slack that this trillion dollars in health cap subsidies are costing us. So not going to have a lot of time but we are not going to get any thing out of this hearing.
▶ 2:50:24Sen. Tillis: What I hope we get is reasonable people understanding their millions of people that are probably -- you could argue but they are what they are and people are reliant on them. And more sense to extend it. One member's opinion. Since junk -- I was going to ask a couple questions. Some of the materials are short and mary. Thank you for that.
▶ 2:50:53Sen. Tillis: We will cement questions for the record. But Mr. holtz-eakin, I heard my colleague talk about keep junk insurance p get into that rhetoric. The chair won't dolch me.
▶ 2:51:09Sen. Tillis: Please get past this rhetoric and tell me, if we had what you have conceived of and presented as a possible brick in the foundation going forward, over the next three to five years, if we had catastrophic plans of able to everybody, what were the premium trajectory and market segmentation look like over the next three to five years?
▶ 2:51:38Dr. Holtz-Eakin: If you provided them for everybody in the aca, you would see the overall risk pool get healthier. You would see the overall number of insured people go up compared to the expiration. It'll be cheaper for the government. We would see costs of the catastrophic plans drop.
▶ 2:52:10Sen. Sanders: Thank you. This is an important hearing and I'm glad you held it but it is not the most important hearing that we should be having. It seems to me the most important question we should be asking ourselves is, number one, why is the united states the richest country in the history of the world the only major country not to guarantee health care for all people?
▶ 2:52:42Sen. Sanders: Simple question. Number two, not unrelated, why is it in the united states despite the fact that we have 85 million people uninsured or underinsured, that some 60,000 people a year died unnecessarily because they do not get to a doctor when they should because they are uninsured or underinsured?
▶ 2:53:04Sen. Sanders: When we do not have enough doctors or nurses or dentists or mental health counselors, when our life expectancy in the richest country in the history of the world is four years lower than oecd countries on your working class is lower than that, why is it that half a million people in america go bankrupt because of medically related illnesses?
▶ 2:53:34Sen. Sanders: Maybe it is time we start asking. With all due respect, I would vote that the next hearing we have on this issue is we bring people from other countries who are provided to all their people as a human rights and a fraction of the cost that we spent. So maybe we have somebody from australia, which has health care for every man, woman, and child.
▶ 2:54:03Sen. Sanders: We are spending close to $15,000 per person. Our problem is not -- we're spending a fortune the question is where is that money going and who benefits? Maybe we ask somebody from france to come here and he slain to us how they guarantee health care to all people as a human right spending less than half of what we spent in canada. Japan spends less than $6,000.
▶ 2:54:33Sen. Sanders: Somehow they manage to provide health care to all people. One of the reasons clearly that health care in america is so expensive is that we have an unbelievably complicated system in which we spend a fortune on administrative costs.
▶ 2:54:53Sen. Sanders: I would hope most of us agree that when we spend a dollar on health care we want to go to a doctor, to a nurse, to prescription drugs, not to some bureaucrat who is telling a doctor what he or she cannot do. So let me start over my questions with a simple one down the line. Please be brief. I have all of two minutes.
▶ 2:55:18Sen. Sanders: Should the united states join every other major country in guaranteeing health care as a human right which says if you are rich, poor, working class, you can get all the health care you need to live a decent life? Is health care human right? Yes or no? >> yes.
▶ 2:55:39Sen. Sanders: You think everybody in america should have the comprehensive coverage you need?
▶ 2:55:47Dr. Holtz-Eakin: We would have to agree on what comprehensive means.
▶ 2:55:50Sen. Sanders: Not a difficult word. It means if a working-class person comes down with cancer they get all the treatment they need to not die unnecessarily. In other words, all lives greeted equal. You get good health care. If you're working class, you may have to die. >> for acute emergency care? Certainly. For elective care, I'm not sure we would agree.
▶ 2:56:19Sen. Sanders: If it is acute emergency care, absolutely. If it is an elective procedure, I'm not sure we will agree.
▶ 2:56:25Sen. Sanders: So it covers all basic health care needs. That or not? Basic means of somebody comes down with cancer --
▶ 2:56:37Dr. Holtz-Eakin: These words are subjective.
▶ 2:56:39Sen. Sanders: They are not. 60,000 people die every year in this country because they do not get the health care they need. Is health care human right? >> our country should provide universal coverage. >> I believe all americans should have access to affordable, high-quality health care.
▶ 2:57:00Sen. Sanders: Access. What happens if I'm making $40,000 a year and a come down with cancer? >> we should have a strong safety net to protect the most vulnerable americans.
▶ 2:57:11Sen. Sanders: What is the most vulnerable americans? We have 60% living paycheck-to-paycheck. Are they vulnerable? >> they should have access.
▶ 2:57:22Sen. Sanders: I have access to a million-dollar home. Does not mean I can buy it. Do they get care? >> the way we improve health care's to reduce government interference in the health care sector.
▶ 2:57:35Sen. Sanders: But every other country providing comprehensive health care is doing it through significant government presence. >> I think there are excellent features of the american health care system. People come from other countries.
▶ 2:57:50Sen. Sanders: Ok. >> I agree. We need to extend the subsidies.
▶ 2:58:04Sen. Welch: Thanks for having this hearing. First, I do believe that in this country as in most other countries every single american should have access to affordable health care for whatever it is they need, not elective, but basic. We have a system set up.
▶ 2:58:30Sen. Welch: That requires everyone to be focused on how we have affordable, sustainable, and universal. I want to think the witnesses. Several good suggestions about how messed up our health care system is. You had some good observations and we should be sitting down and talking about that. I really appreciated your testimony as well and you may be surprised that you had a number of points that made sense and we should be talking about it.
▶ 2:59:03Sen. Welch: Here's the reality. This is a year too late. The question for us now is how do we help families that are dependent on how to take continuation of the tax credits to have health care? They did not cause the problem. You do not cause the problem. You have to deal with it.
▶ 2:59:29Sen. Welch: There is something fun mentally bogus about us having this discussion about ideas about how we can bring down health care when families in vermont, idaho, oregon have no capacity to deal with these macro issues we are talking about with insurance ripoffs and executive pay, shareholder buybacks, huge dividends.
▶ 2:59:58Sen. Welch: All that money be put into the health care system is not reinvested in the health care system so the challenge for us is to accept the responsibility that this congress has to the american people. If we wanted to come up with cost-saving ideas and had several good proposals by these imminent witnesses, we should have been working on that a year ago. We do not have time.
▶ 3:00:27Sen. Welch: In 26 days meant to change things that is going to make a feasible practical option for american families about to lose their health care and we have no choice and no other option other than to extend these tax credits, so we do not penalize good american families, republican, democrat, independent for the failure of congress to do what its job is and that is to address the rising cost of health care.
▶ 3:00:57Sen. Welch: Thank you for having this hearing. I pledge to you and my colleagues that anything we can do to reform the cost of health care so we can get to a place where we do not spend the most and get the least -- we get the most and spend the least is what our goal should be, that provides health care security to folks. I am all in on that. Absolutely all in.
▶ 3:01:23Sen. Welch: Blaming obama care or republicans or democrats is stupid. Because basically the question is how do we make certain the people we represent have access to health care without freaking out when they get a diagnosis that they are going to need it? That is going to be good for all of us and all americans so thank you. My ending is where I began. We have to extend the tax credits because otherwise people lose health care and during the interim we can be working hard and together on bringing down health care costs.
▶ 3:01:53Sen. Welch: I yield back.
▶ 3:01:56Chair Crapo: Senator wyden has some closing remarks he would like to make. If no other senator is here, we will proceed to closing the hearing.
▶ 3:02:06Sen. Wyden: You made oregonians proud because he spoke to what is important to working families. I noted your comment that the stuff is kind of confusing and concerning. Let me tell you, you are more than 100% right and when you state is confusing, most people appear would have trouble going through some of the dense stuff being talked about so thanks for laying this out so well.
▶ 3:02:35Sen. Wyden: My second point is everybody as we talk about this needs to recognize that you and the millions of people who feel like they have been tied to a train track deserve help now. This is not summing that is an abstract question in terms of that situation with the tax break. It has to be done now.
▶ 3:02:58Sen. Wyden: For the future, a big part of this has to be reducing bureaucracy, not adding to bureaucracy and I think it was Mr. levitt's -- Mr. levitis who pointed out some of what we are talking about is adding to bureaucracy. We have 24 tax accounts on the books now and it seems like some republicans want to go to 25.
▶ 3:03:24Sen. Wyden: We all ought to make it clear we are not going to do that, that we are going to reduce bureaucracy and that is one of the things we hear about at home the things we hear about at homr the things we hear about at home the things we hear about at homo the things we hear about at homa backdoor kind of abortion ban. That is not going to happen. I want everybody to understand I touched on it early but a backdoor abortion ban is not something we will ever agree to.
▶ 3:03:49Sen. Wyden: This is important if we get this kind of points and people's mind and started when a couple oregonians who had a lot of stuff going on in their lives decided they wanted to talk about health issues and the challenges in terms of what it's really going on out there and he made us proud partly. Thank you. >> thank you, senator whiting. We have now been joined by senator warnock. Senator warnock, you will be the final questioner. You get five minutes.
▶ 3:04:19Sen. Wyden: We are and a time pressure. I apologize for that. >> health care has already been far too expensive for too many americans. Anybody who says status quo is perfect right where we are in talking to ordinary folks. It's past time we have serious conversations about affordability but here's the reality.
▶ 3:04:42Sen. Wyden: In 43 days, millions of americans including one .2 million georgians will experience severe increases. In their monthly health insurance premiums.
▶ 3:05:01Sen. Wyden: If the health care system itself were a patient in a trauma room, seems to me that we need to stabilize the system before we can explore innovative treatment options for long-term care. Mr. levitt, you are and affordable care act expert. In which states have families benefited the most from the enhanced premium tax credits. >> thank you for the question senator.
▶ 3:05:32Sen. Wyden: It's in the states that have not expanded medicaid because in those states, there are groups of people who have no affordable option now except the premium tax credit whereas in other states, more of those -- >> >> that's correct. States like georgia. They need these tax credits.
▶ 3:05:54Sen. Wyden: I would include not only georgia but as I think about the members of this committee and the people we were sent here to represent from our respective states, as texas, south carolina, wyoming, tennessee, and kansas. We all represent states that have not expanded medicaid. Let's go through an example.
▶ 3:06:16Sen. Wyden: A georgia woman in may come with a full-time minimum wage job and local barbecue restaurant and earning roughly $20,000 a year, that's a reality for many people, has been able to get health care while paying no monthly premiums for the last five years thanks to the enhanced tax credits. What would happen to her annual premiums next year if these tax credits expired?
▶ 3:06:45Sen. Wyden: Quick she would owe about $600 for the year. >> they would increase at about $600 in additional costs. Unexpected health care costs next year. And she would have to make decisions about what to prioritize. Again, she makes $20,000 a year. So you know, does she pay for her health care? Or does she get -- needed new tires on her car so she can keep going to work as we talk about the importance of work?
▶ 3:07:14Sen. Wyden: I love it when people talk about the importance of work but they don't defend the dignity of work. Does she fix her air conditioners before next summer? Let's compare this to someone in a state that has expanded medicaid. Let's take the same woman, make it minimum-wage. If she lived in louisiana or idaho or even new hampshire, how much would she pay in monthly premiums? Zero. Why? >> because medicaid does not have premiums.
▶ 3:07:42Sen. Wyden: >> because they expanded medicaid. As of january 1, if we fail to act now, americans two tier health system will get even worse. In some states, you can work a full-time job, again for folks who like to talk about the importance of work, I believe in the dignity of work. You can work full-time jobs, have full coverage plans with zero monthly premiums. Other states, you will be stuck with a $600 bill or more, making $20,000 a year.
▶ 3:08:14Sen. Wyden: All because of where you live. Congress is about to make it worse. Can you imagine a world where social security benefits were lower in some states than others? It seems to me that that would not be fair, would not be equal treatment under the law.
▶ 3:08:35Sen. Wyden: If congress lets these tax credits expire, what do we expect to happen to people barely making ends meet in states like georgia or wyoming who are currently paying zero monthly insurance payments? >> many people end up uninsured and be exposed to crushing health care costs. >> pay higher premiums. A lot of folks will lose coverage.
▶ 3:09:05Sen. Wyden: We will literally be making our workforce sticker and weaker. And poorer. To me, that does not uphold the dignity of work. We would be throwing money into a health savings account, throwing money into a health savings account that's would it solve this problem or cause premiums to go back down to zero? We just put the money in hsa, would that help? >> no, it would not.
▶ 3:09:34Sen. Wyden: It would not help people pay their premiums at all and it would not help people who cannot afford to enroll. >> thank you so much. I am a little over my time. I welcome my practice honest, principled conversations about making health care affordable to stabilize the patient and then let's have a long-term conversation about how we fix the system. Thank you so much. >> thank you very much and that does wrap up the questions and senator whiting has given his closing remarks.
▶ 3:10:05Sen. Wyden: I will forgo my lengthy closing remarks and simply say to our witnesses, thank you for coming. Thank you most of all for the information and ideas that you have presented to us. Those who have listened to this whole hearing will have seen a lot of argument about things where we disagree.
▶ 3:10:26Sen. Wyden: They will also, I think, have seen a lot of suggestions and proposals which our witnesses indicated discussion, had discussion with us on or maybe there is some bipartisan progress that can be made to make health care more affordable. I agree with what senator warnock said.
▶ 3:10:45Sen. Wyden: He is all in and I think everybody on this committee is all in for trying to work together to find those bipartisan solutions to make health care affordable and protect people from the explosive impact that the unchanging lady hot -- unchangingly high increase in premiums is pushing onto them. Thank you to our witnesses. This hearing is adjourned.