On Thursday, health insurance CEOs faced questions about health care costs, vertical integration and prior authorization from the House Energy and Commerce Committee and the House Ways and Means Committee.
Insurer witnesses include UnitedHealth CEO Stephen Hemsley; David Joyner, president and CEO of CVS Health; Gail Boudreaux, president and CEO of Elevance Health; David Cordani, president, CEO and chairman of the board of directors of Cigna Group; and Paul Markovich, president and CEO of Ascendiun, the parent company of Blue Shield of California.
Ellen Allen, executive director of the West Virginia Affordable Care Organization, also testified before the Energy and Commerce Committee, while Iowa resident and small business owner ReShonda Young testified before the Ways and Means Committee.
Here are four takeaways from the hearing:
1. Everyone agrees health care affordability is a problem: At both hearings, lawmakers stressed that health care has become too expensive and that Americans are struggling to cope with rising premiums, deductibles and out-of-pocket costs.
For example, Rep. Morgan Griffith (R-Virginia), chair of the Energy and Commerce Committee, argued that “a lack of competition and integration within insurance markets contributes to our overall higher health care costs.” Ranking member Rep. Diana DeGette (D-Colo.) said, “Americans know health care is too expensive because it makes up a larger share of our economy than any other developed nation.”
Health insurance CEOs agree that health care costs are a major issue.
“Our health care system is failing us,” Markovich said in his opening statement. “It's too expensive, it's too impersonal. It doesn't reach everyone. It has lower quality scores compared to other countries and is distrusted by too many Americans. That's unacceptable.”
2. Everyone has different ideas about solving affordability issues: Despite widespread agreement that health care is too expensive, consensus quickly fell apart on how to fix the problem. Republicans largely blame health care costs on a lack of competition, consolidation and the structure of the Affordable Care Act. Democrats point to the need to extend the ACA's enhanced premium tax credit, which expires at the end of 2025.
That divide was on display in opening statements at the Ways and Means Committee hearing. Chairman Rep. Jason Smith (R-Mo.) Democrats have been criticized for failing to address affordability issues and accused of protecting insurance companies and promoting market consolidation.
“Under Obamacare, the health care system that Democrats created has been in place for 15 years and prices have only gone up, not down,” he said. “They've just gone up. I also want to remind my Democratic colleagues that these companies exploit market forces and loopholes in federal programs to consolidate control, direct patient care and maximize revenue.”
Rep. Richard Neal, D-Mass., blamed Republicans for allowing Affordable Care Act (ACA) tax credits to expire.
“Our Republican friends have no interest in strengthening health care or protecting patients… They have refused to extend the tax credits we have repeatedly requested, causing millions of people to drop health insurance this year, and they have remained silent as the Trump administration waged an all-out war on public health and, of course, science,” Neal said.
Insurers, meanwhile, largely blame hospitals and pharmaceutical companies for rising costs.
“The cost of Medicare fundamentally reflects the cost of health care itself,” Hemsley said. “It's not so much a cause as it is an effect. If insurance premiums are rising even as we compete aggressively with other companies, it's indicative of increasing medical services, drug costs and the volume of care activity. In fact, since 2000, hospital and drug spending has soared at three times the rate of inflation.”
3. Vertical integration: Insurers face many issues from both parties regarding vertical integration with PBMs, pharmacies and clinics. During a Ways and Means Committee hearing, Rep. Greg Murphy (R-N.C.) said vertical integration “has destroyed competition in this country.”
“I don't often agree with Mark Cuban, but we do agree that what needs to happen is you guys need to be broken up. … If I had my way, I would turn all of you to dust. We're going to start over. We're going to have competition,” he said.
Rep. Alexandria Ocasio-Cortez (D-N.Y.) focused her questions on CVS Health, noting that the company owns insurance company Aetna, PBM CVS Caremark and medical clinic Oak Street Health. She asked Joyner if he agreed that this was “considerable market concentration,” to which Joyner responded that he disagreed and that it was a “very consumer-friendly model.”
4. Prior authorization and denial: Insurers are also being grilled about their prior authorization practices and denial rates. A key moment came during the Energy and Commerce Committee hearing, where Rep. Buddy Carter (R-Georgia), who works in pharmacy, asked Hemsley if he had ever looked a patient in the eye and explained why UnitedHealthcare was refusing to provide them with the drug.
Hemsley responded that he looked the patient in the eye multiple times but could not recall whether this was related to prior authorization.
“I'm the one who has to look the patient in the eye,” Carter countered. “I have to tell them on your behalf, this is not fun.” He went on to tell the story of a single mother in Kentucky who was diagnosed with cancer but was denied medication by UnitedHealthcare.
Photo: Valerii Evlakhov, Getty Images
