The CEOs of five prominent health insurers are scheduled to face intense questioning from Congress on Thursday as House Republicans attempt to assign responsibility for escalating health care costs. The hearings, conducted by the Energy and Commerce and Ways and Means committees, come in the wake of enhanced Affordable Care Act (ACA) subsidies expiring at the end of last year, leading to significant premium hikes affecting millions of Americans.
As discussions unfold, the outlook for addressing the sudden loss of these tax credits appears bleak. Both the House and Senate have failed to negotiate a plan to reduce the surging health insurance premiums, and with the Senate in recess this week and the House following suit next week, the likelihood of swift legislative action is diminishing. Drew Altman, president and CEO of KFF, a nonpartisan health policy research organization, noted that health insurers are often viewed as easy scapegoats, as they contribute to consumer frustrations through various administrative hurdles, such as prior authorization reviews.
The executives from UnitedHealth Group, CVS Health, Cigna Health, Elevance Health, and Ascendiun are expected to provide testimony during these hearings. This scrutiny comes amid rising discontent among voters regarding living costs, particularly health care. Last week, former President Donald Trump introduced a new health care strategy, proposing to redirect funding from ACA subsidies into health savings accounts. However, the plan, criticized for revisiting previous proposals with minimal new detail, raises questions about its feasibility in terms of congressional endorsement.
The hearings are presented as an initial exploration into the fundamental issues driving health care price surges, as articulated by committee Chairs Brett Guthrie (R-Ky.) and Jason Smith (R-Mo.). The focus will also include critiques of the ACA, which Republicans claim significantly contributes to rising costs. According to a hearing document, the ACA mandates coverage for all individuals, regardless of pre-existing conditions, while restricting insurance plans from adjusting rates at the individual level. This, they argue, has expanded health care access for those with significant health issues but simultaneously increased costs for healthier individuals.
In contrast, Gideon Lukens, a senior fellow at the Center on Budget and Policy Priorities, contended that the ACA effectively resolved challenges associated with covering individuals with pre-existing conditions and established a more functional and stable insurance market. Previously, many people with conditions like cancer or diabetes had difficulty accessing affordable coverage. Lukens emphasized that the recent expiration of the enhanced ACA tax credit remained the crucial issue at hand. He noted that addressing the affordability crisis requires urgent extension of these benefits to mitigate further harm.
Insurance companies have consistently stated that premium increases largely stem from rising expenses within the overall healthcare ecosystem, predominantly due to escalating hospital and prescription drug costs. This year’s premium hikes have affected a range of coverage options, including those under the ACA, employer-based insurance, and Medicare plans. In written testimony, UnitedHealth Group’s CEO Stephen Hemsley will inform lawmakers that insurers are engaged in competitive efforts to keep premiums affordable, but external healthcare costs primarily drive relative price changes. Hemsley attributed premium rates to two key factors: the volume of care utilized and the associated charges. Higher care prices and increased demand for medical services invariably raise health coverage costs.
David Joyner, CVS Health’s CEO, echoed this sentiment, emphasizing that the organization strives to assist families grappling with a convoluted healthcare system and rising costs. He stated that the underlying drivers of these expenses are well understood, citing heightened demand for medical services, escalating provider costs, and persistently high hospital and prescription drug prices.
