Lawmakers Question Health Insurance CEOs on Cost, Business Practices

Republicans and Democrats agreed on the need to lower health insurance costs but differed in approach.

House Committee on Ways and Means Chairman Rep. Jason Smith (R-Mo.) (L) and Ranking Member Rep. Richard E. Neal (D-Mass.) (R) speak ahead of a hearing on Capitol Hill in Washington on May 13, 2025. Madalina Vasiliu/The Epoch Times

Two congressional committees grilled health insurance CEOs on the dramatic increases in premiums and their business practices in a full day of hearings on Jan. 22.

The executives highlighted their efforts to reduce costs and increase health outcomes, and they pledged to work with Congress and President Donald Trump to increase competition and improve the nation’s health care system.

Members of Congress were generally skeptical, however, pointing out business practices they suspected of needlessly raising costs.

Democrats agreed on the need for reforms of the health care system, including in the insurance industry. However, some accused Republicans of being responsible for the lack of affordability due to their unwillingness to extend Obamacare’s expanded subsidies.

Republicans have said that the premiums are unaffordable but see the subsidies themselves as the problem. The subsidies are paid directly to insurance companies on behalf of enrollees, which Republicans said has caused price inflation.

Insurers

The executives represented several of the largest health insurers in the country, including UnitedHealth Group, CVS Health, Elevance Health, Cigna, and Ascendiun, the parent company of Blue Shield of California.

The group testified before the Health Subcommittee of the Energy and Commerce Committee in the morning and before the Ways and Means Committee in the afternoon.

All pledged to work toward making health care better and more affordable.

“Like all of you, we are dissatisfied with the status quo and know we must all do better, and so we are committed to doing exactly that,” Stephen Hemsley, CEO of UnitedHealth Group, told both groups.

Yet executives pointed to price hikes by care providers as the primary driver of price increases.

“Health insurance premiums are primarily shaped by medical care and drug costs and where care is delivered,” Gail Boudreaux, president and CEO of Elevance Health, said in her opening statements.

David Cordani, president, CEO, and chairman of the board at The Cigna Group, said: “Since 2000, the cost of a hospital stay has grown 220 percent. In 2024, the median price of a new pharmaceutical launch in America was $370,000. That’s up from $2,000 twenty years prior, or a 12,000 percent increase.”

Insurers also noted steps they had taken to reduce costs.

David Joyner, chairman and CEO of CVS Health, said: “We’re aggressively promoting the use of [biosimilar medications]. We now have the vast majority of members paying $0 out of pocket for these once pricey drugs.”

Paul Markovich, president and CEO of Ascendiun, said more explanations about rising costs or attempts to shift blame were unhelpful.

“We need to enact bold reforms as soon as possible to force everyone in the health care system to deliver greater health to Americans more efficiently.”

Claim Denials

Members of the committees spent much of their time questioning the executives on issues they saw as driving up costs, starting with claim denials.

Seventy percent of denied claims are paid after appeal, according to health care consulting firm Premier. However, only about 15 percent of patients who have had a claim denied file a formal appeal, according to the health care research group KFF.

Rep. Kim Schrier (D-Wash.), a physician, commented that the denial of payable claims appeared to be an intentional strategy employed by insurers.

“It looks like you bet on wearing patients down,” Schrier said. “And then they either decide to just eat the cost, or they die before they get the care they need.”

Several insurers said their claim denial rates are low or they are progressing in reducing them.

“We continue to reduce the number of claims subject to prior authorization, and by independent measures, we have the fewest number of services subject to it,” Joyner said.

Industry Consolidation

Committee members also questioned the effect of consolidation within the health care industry. Sometimes called vertical integration, this refers to the ownership of various elements of the system—such as insurance, physician practices, hospital, or pharmacies—by a single entity.

Of the five companies represented, all had ownership of an insurance company and one or more health care providers. All but Ascendiun also own a pharmacy benefit manager, a company that negotiates drug prices for insurers.

“This level of consolidation helps explain why Americans feel very anxious about their health care,” Rep. Jason Smith (R-Mo.) said. “The coverage they have, the drugs they rely on, and the doctors they can see are increasingly controlled by the same corporate families.”

Asked about his own company’s ownership of an insurance company, physician practices, and pharmacies, Joyner said, “I wouldn’t agree that it is market concentration. I suggest it’s a model that works really well for the consumer.”

Rep. Alexandria Ocasio-Cortez (D-N.Y.) said legislative action was needed to foster more competition. “I think we should put our votes and our legislation in alignment with that and consider breaking up this industry,” she said.

Commenting on the impact of vertical integration on consumers, Rep. Dan Crenshaw (R-Texas) noted that some counties have just one or two Obamacare plan options.

“Congress has a responsibility here to fix a broken system,” Crenshaw said. “But you have a responsibility to also act in good faith.”