The Source Blog

On January 22, the House Committee on Energy & Commerce held a hearing titled “Lowering Health Care Costs for All Americans: An Examination of Health Insurance Affordability.” The discussion centered on health care costs, patient access, and affordability across the entire health insurance marketplace, and focused on the role insurers play in care delivery. Meaningful Congressional action on rising healthcare prices has been limited in recent years. The purpose of Congressional hearings is often to gather information about a specific topic likely to be used to shape future legislation. For Congress to decide to have a hearing, a Committee “is influenced by several factors, including the salience of issues to the nation, presidential initiatives, matters of significance to particular Committee members, and the importance of policies to constituents and interest groups.” After the passage of the Affordable Care Act in 2010, the most notable Act passed by Congress with the goal of lowering health care prices has been the federal No Suprises Act. Effective in 2022, the No Surprises Act aims to help patients understand health care costs in advance of any care they may receive to lower the risk of receiving surprise medical bills. The decision of this Committee to hold a hearing on rising health care costs signifies a recognition by the legislature of a hopefully solvable problem, and the possibility of new legislation.

Factors Contributing to the Healthcare Crisis

In the opening statements from members of the Committee, representatives reported on the current healthcare crisis.  Congressman Morgan Griffith (R-VA-09), the Chairman presiding over the hearing, noted that the goal was to understand the root causes of rising healthcare costs.  Diana DeGette (D-CO-01), Subcommittee Ranking Member, spoke on how health care takes up a greater percentage of our economy than in any other developed country. Further, Congressman Brett Guthrie (R-KY-02) communicated the Centers for Medicare & Medicaid Services data that the United States spent $5.3 trillion on healthcare in 2024, which is 18% of the gross domestic product. Guthrie notes that no matter where someone is getting their coverage from (i.e., private markets, employers, the ACA, etc.), costs “have been increasing at an unprecedented rate.” The conversation with insurance executives centered on competition in health care markets as either playing a role in increasing or decreasing costs, and the issue of consolidation within markets.

Examining Potential Solutions

A portion of the Committee argues that competition is necessary for lowering prices. Congressman Dan Crenshaw (R-TX-02) argues that while the CEO testimonies were noting that vertical consolidation is a major driver of rising costs, they are a large part of the problem. Vertical consolidation occurs when one corporation controls multiple parts of the system. In other words, one company who owns the insurer, PBMs, pharmacies, physician groups, clinics, data analytics, and more. For example, Griffith explains that a subsidiary of UnitedHealth Group has recently bought the Holston Medical Group, which was the largest provider in Tennessee and provided care in Southwest Virginia as well. Griffith asked the UnitedHealth executive how this consolidation drives competition. Stephen Hemsley, the Executive chairman of UnitedHealth Group, responded to this question by arguing for “value-based care.” Value-based care rewards providers who prioritize health outcomes rather than by the volume of services rendered. Hemsley believes that when the patient is receiving care within only one system, that system can optimize the experience for the patient. Ultimately, the hearing revealed a clear ideological divide over whether additional regulation is necessary to curb rising health care costs. Some members of the Committee argued that greater federal oversight is essential to counterbalance market consolidation, ensure transparency, and prevent dominant insurers from using their vertically integrated structures to suppress competition. Others contended that excessive regulation risks stifling innovation and limiting the flexibility insurers need to experiment with new care models, such as value-based care.

Conclusion

In recent years, Congress has produced little new legislation aimed at addressing healthcare costs. There is no doubt that healthcare costs have become a crisis in the United States, but a federal Congress that seems hardwired for inactivity has not seemed like a likely place to put hope for a solution. Having a key House Committee hold a hearing on healthcare affordability, with an in-depth discussion of problems and potential solutions, may be a sign that Congress is ready to consider concrete steps to address problems around healthcare costs. However, given the current polarized nature of the federal government, enacting solutions may remain difficult.

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