UPDATED: 8 p.m. ET
The House Ways and Means Committee hearing has concluded, bringing a long day of questioning for major health insurance executives to an end.
More than nine hours of total questioning across two hearings touched on a slew of factors impacting the affordability of healthcare: the Affordable Care Act, claims denials, prior authorization and consolidation. Paul Markovich, CEO of Ascendiun, the parent company of Blue Shield of California, and one of the executives called to the panel, told Fierce Healthcare that the long debate ultimately proves that problems of this magnitude require massive changes.
"I hope what everyone takes away from this is that it's a systemic problem that requires a systemic resolution," he said.
Markovich was the lone representative of a nonprofit health plan on the panel, and he noted that non-for-profit Blues like Blue Shield of California cover a significant swath of Americans. And Blue Shield has taken some big swings in rethinking the traditional paradigms, with its Pharmacy Care Reimagined model as a prime example.
Blue Shield's specific approach to redesigning the pharmacy model didn't garner much time at the lengthy hearings, but PBMs and the cost of prescription drugs were center stage. Markovich said that ultimately the discussion centers around the need to change how different entities within the system are paid.
The same can be said for the No Surprises Act arbitration model, which insurers have raised alarms about. Both Markovich and Elevance Health CEO Gail Boudreaux spoke about a trend toward private equity-backed providers flooding the dispute resolution to secure higher payouts.
He said that while it's a financially prudent move for these individual organizations, this behavior doesn't positively speak to the broader cost equation.
"As soon as you start financially rewarding certain behavior you're just going to get more of it," he said.
Markovich said that one area where he was hoping to see more dialogue is around the role technology can play in reshaping the traditional models. Blue Shield of California has rolled out the Digital Health Record program that aims to boost care coordination and transparency as well as improve the flow of data to providers.
He said that's an example of where health plans are leaning on tech to take wasteful spending out of the system.
The health plan executives emphasized the role that provider and pharmaceutical company pricing plays in the accelerating costs in healthcare. Ways and Means Chairman Jason Smith, R-Missouri, hinted at future hearings on the topic that would bring in voices from other parts of the healthcare system.
Editor's note: See the time-stamped updates below for key takeaways and exchanges from the day's hearings.
UPDATED: 4:49 p.m. ET
The House Ways and Means Committee has gone into recess for a vote following an impassioned speech from Rep. Greg Murphy, R-North Carolina.
Murphy, a physician, said that while there is "blame to go around" on the affordability of healthcare, he believes the actions of health insurers are the largest driver of these issues. He said if he had the power to do so, he would shift for-profit organizations in healthcare to non-profits.
Profiteering in the health insurance industry has led them to abuse the "privilege of authority" they carry, Murphy said.
"You have put profits above patients and you have put profits above those who care for patients," he said.
He cited a personal example, where he sought to secure a medication that he needed. Even as a member of Congress and physician himself, Murphy said he had to endure eight denials before the claim was approved and filled.
He also noted that ongoing investigations from the Federal Trade Commission and the Department of Justice would likely bring to light any misconduct major companies are conducting. The FTC is taking a deep dive into the pharmacy benefit management segment, while DOJ is conducting a probe into UnitedHealth's Medicare Advantage billing practices.
Murphy said he doesn't "agree with Mark Cuban often," but both are aligned on the need to break up massive healthcare conglomerates.
"If I had my way, I'd turn all of you guys into dust," he said. "We'd start back from scratch, we'd have competition in the industry."
UPDATED: 3:55 p.m. ET
While the conversation at the House E&C Subcommittee hearing this morning was fairly varied, in the early questioning before the Ways and Means Committee, the debate over the Affordable Care Act has been front and center.
Ranking Member Richard Neal, D-Massachusetts, said in his opening remarks that the expiry of the enhanced subsidies in the reason behind the hearings, and why the affordability of healthcare is front and center in the minds of many.
"When we hear that costs have gone up in the last three months, it's because the credits have not been extended," Neal said.
The advanced premium tax credits were put in place as part of the COVID-19 relief response, and expired on Jan. 1. For many individuals enrolled in marketplace plans, this means that their premiums are set to rise significantly if they renew coverage for 2026.
Rep. Adrian Smith, R-Nebraska, said that the tax credits equate to "shoveling government subsidies to paper over a problem." Before the ACA was instituted, high-risk pools addressed costs related to pre-existing conditions, and Smith said that set-up looks like a "better deal" compared to the current market.
The subsidy debate "really, I think, conceals the problem at hand," he said.
Smith also expressed concern about improper or fraudulent enrollments on the exchanges. Analyses from the right-leaning Paragon Health Institute suggests that 5 million people may have been improperly enrolled in ACA plans in 2024 alone.
Gail Boudreaux, CEO of Elevance Health, said that the company does share "concern about potential fraud" in the exchanges. However, continuous enrollment plays a key role in ensuring that the insurer can offer critical services to members.
"We think a stable program requires continuous coverage, requires us to be able to deliver preventative care," she said, "so those are all really important pieces of keeping integrity."
UPDATED: 2:32 p.m. ET
The House Ways and Means Committee has convened for the second hearing of the day. Chairman Jason Smith, R-Missouri, is opening the hearing with comments on vertical integration as well as fraud in government programs.
Follow along with the livestream of the hearing here.
UPDATED: Noon ET
The House E&C hearing has resumed after a lengthy recess to allow legislators to attend a vote.
Democrats on the panel have largely focused on the effect of the enhanced Affordable Care Act premium tax credits on costs for individuals in that space, while Republicans have hammered other parts of the ACA—such as the impact of the medical loss ratio (MLR) and its effect on vertical consolidation.
Rep. Diana Harshberger, R-Tennessee, said that the trend toward vertical integration reduces choice for consumers across providers, pharmacies and plan options.
"That's not competition," Harsberger, vice chair of the Health Subcommittee, said. "That's control."
CVS Health CEO David Joyner said that the goal of vertical integration is to make a difference across multiple segments and that the company is seeing this work bear fruit.
"By putting these businesses together, we believe we're solving for the fragmentation," Joyner said.
Multiple Republicans on the panel pointed to the MLR as a driver for vertical integration, as while insurers must meet those thresholds under premium revenue, that doesn't apply to other segments within the companies. John Joyce, R-Pennsylvania, said the MLR creates "multiple perverse incentives to consolidate vertically and horizontally."
"Since provider profits are not capped under the MLR in the same way that plan profits are, there is absolutely no incentive to keep prices low," Joyce said.
Legislators on both sides of the aisle also took the insurers to task around prior authorization and claims denials, particularly slamming Hemsley and UnitedHealth Group as the largest player in this space. He told the panel that part of why he returned to the CEO chair last year is to find ways to "improve the performance of this enterprise to address" challenges that worsen the patient experience.
In addition, Rep. Buddy Carter, R-Georgia, asked the payer executives if they support President Donald Trump's recently-released "Great Healthcare Plan," which proposes sending the value of the ACA's enhanced subsides to individuals in a health savings account rather than routing those funds through the payers.
"Instead of sending money to insurance companies, send it to the patients," Carter said. "Let them create a competitive marketplace."
UPDATED: 10:10 a.m. ET
Also in advance of the E&C hearing, CVS Health released a look at some of its efforts around affordability.
The healthcare giant, which is the parent company of the insurer Aetna as well as the pharmacy benefit manager Caremark, said that it approves 95% of prior authorization requests within 24 hours, including many requests that are completed instantaneously.
CVS said it currently approves 77% of electronic prior auth requests in real-time, and that rate will be above 80% by the end of 2026.
CVS also highlighted its program to bundle prior authorizations for certain conditions, which would include future approvals for key tests and interventions associated with those needs. The company first rolled out these bundles for lung, breast and prostate cancers, later expanding it to certain musculoskeletal procedures. It has also begun to bundle pharmacy and medical procedures needed for in vitro fertilization.
Aetna went on to say it's working with 17 health systems to embed nurses in those facilities to facilitate patient care and follow-up support as they transition out of the hospital setting.
"The underlying costs of healthcare—primarily hospitals and new pharmaceuticals—continue to push up insurance premiums in the United States," CVS CEO David Joyner said in the press release. "We welcome policymakers’ assistance in driving out provider fraud and combatting drugmaker price gouging.”
UPDATED: 9:50 a.m. ET
Major hospital organizations are aiming to get out ahead of the hearings this morning, where insurance CEOs are likely to point to hospitals' pricing as a key factor in escalating medical costs.
The American Hospital Association, in a statement (PDF) to the House Energy & Commerce's Health Subcommittee, said that legislators will not be able to see the full picture of affordability in healthcare without first understanding "how dramatically the health insurance market has changed."
"While commercial insurers often deflect scrutiny of their own consolidation practices by pointing the blame at others, including the over 5,000 hospitals that serve a wide range of communities and markets, the data clearly indicates that most regions of the country are dominated by one or two insurers holding outsized market shares," AHA said in the comments.
Indeed, across the insurance CEO's prepared remarks, they noted that rising hospital costs are a critical factor in the overall rise in healthcare expenses. Elevance Health CEO Gail Boudreaux, for instance, mentioned that hospital costs increased by 9% in 2024.
UnitedHealth Group CEO Stephen Hemsley said in his opening remarks that hospital prices have increased three times faster than the rate of inflation over the past 25 years.
The Federation of American Hospitals echoed AHA in its own statement (PDF) for the record, saying that administrative burdens imposed by health plans, such as prior authorization, are playing a leading role in driving up medical costs. This is particularly felt in Medicare Advantage, FAH said.
"The insurer-driven administrative burden placed on both patients and providers has skyrocketed in recent years," the organization said.
The E&C hearing is underway, follow along with the livestream here.
POSTED: 5:30 a.m. ET
The executives at several leading health insurers are set for a gauntlet on Capitol Hill today, speaking in back-to-back hearings about the affordability of healthcare.
Stephen Hemsley, CEO of UnitedHealth Group; David Joyner, CEO of CVS Health; Gail Boudreaux, CEO of Elevance Health; David Cordani, CEO of the Cigna Group; and Paul Markovich, CEO of Ascendiun, the parent of Blue Shield of California, will address the House Energy & Commerce Committee's Health Subcommittee today at 9:45 a.m. ET.
Then, they'll speak before the House Ways & Means Committee at 2:30 p.m. ET.
Ellen Allen, executive director of West Virginians for Affordable Healthcare, will join the executives at the morning hearing, while ReShonda Young, a resident of Iowa who has benefited from the Affordable Care Act's premium tax credits, will speak at the afternoon session.
The hearings come as legislators debate a response to the expiry of enhanced premium tax credits for plans on the ACA's exchanges, which is a major factor in rising premiums for this market. President Donald Trump and other leading Republicans have slammed insurers as benefiting from these tax credits financially even as patients' costs rise.
In prepared testimony, the executives maintain that premiums reflect the broader cost of care as well as utilization trends, and also point to rising hospital costs in particular as a key driver in the overall increase.
Boudreaux said in her prepared remarks that hospital spending increased by 9% in 2024, while Hemsley noted that hospital prices have increased three times faster than inflation in the last 25 years. Hospital services account for more than 30% of of overall healthcare spend, he said.
The CEOs also said that escalating prescription costs are a major factor in affordability. Cordani said that the median price of a new prescription drug was $370,000 in 2024, compared to about $2,000 less than 20 years ago.
UnitedHealth, Cigna and CVS all operate one of the "Big Three" pharmacy benefit managers—Optum Rx, Express Scripts and Caremark, respectively—so expect no shortage of questioning around those divisions during Thursday's hearings.
Stick with this page and FierceHealthcare.com for ongoing coverage as the hearings progress.