ICYMI: Rep. Smucker Questions Health CEOs on Rising Health Care Costs

Rep. Smucker: "You would expect if a marketplace is working properly, that perhaps under consolidation, we would see lower or at least slower growing premiums in highly concentrated markets. But that's just simply not happening today."

WASHINGTON, D.C. – Rep. Lloyd Smucker (PA-11), Vice Chair of the House Budget Committee and senior member of the Ways and Means Committee, participated in a Ways and Means hearing last week where CEOs of the nation’s largest health insurers and pharmacy benefit managers (PBMs) appeared before the committee to explain why premiums, deductibles,  and out-of-pocket costs continue to rise for American families. 

Rep. Lloyd Smucker (PA-11) noted, greater consolidation in health care has driven higher spending, helping to pad corporate profits, without a commensurate decrease in premiums or patient costs.

Rep. Smucker made the following comments during the hearing:

“The federal government sends hundreds of billions of dollars each year to private health insurers through Medicare and Medicaid and ACA subsidies. It’s a massive public investment. And I understand insurance companies you want to make a profit, you want to do well, and in a free market I’d have no problem with that, but this is barely a free market in fact much of it is not.

“Americans, while this is happening…Americans are paying more than ever for coverage and they’re experiencing worsening health outcomes.

“We spend more on health care than any other country but have lower life expectancy and higher rates of preventable chronic disease. At the same time the nation’s largest insurers are reporting billions of dollars in annual profits—profits ultimately supported by taxpayers and families paying higher premiums and out of pocket cash. 

“If public dollars are holding up the system what are the results. Why are insurers thriving while Americans’ health is stagnating?"

Rep. Smucker on questioning Gail Boudreaux, President & CEO, Elevance Health:

Rep. Smucker: “Americans deserve lower costs, better health and real accountability, not just strong quarterly earnings. Over the past decades, as I mentioned, families have seen premiums, deductibles and out-of-pocket costs rise year after year, even as insurers have taken record revenues. I've produced a chart which shows health insurers stock prices over the last 10 years, and correlates that with rising health care premiums or insurance premiums... It has resulted in higher profits and higher stock prices. For health insurance companies, your margins are protected, but for patients, their experience is higher premiums, higher cost sharing and more difficulty accessing great care. 

“Miss Boudreaux, Elevance has grown massively with revenues over $170 billion. Operates Blue plans in many states and owns pharmacy, behavioral health and other subsidiaries. Families and workers in my district are not experiencing affordability gains. 

Premiums and deductibles continue to rise, even as companies like yours grow larger. Do you acknowledge that consolidation in the health care industry, including your company's expansion into affiliated services, has not resulted in lower premiums or lower out of pocket costs for working families?

Gail Boudreaux, President & CEO, Elevance Health:“Congressman, thank you. I appreciate the question about affordability, and I would say our strategy is grounded in whole health, and as we think about our strategy, we have to –” 

Rep. Smucker: “You think costs have gone down as a result of those strategies for families?”

Gail Boudreaux, President & CEO, Elevance Health: “Costs have gone up, predominantly premiums, because we are paying more for inputs, and as you identified the health status –” 

Rep. Smucker: “Do you think consolidation has reduced the amount of costs that have gone up?”

Gail Boudreaux, President & CEO, Elevance Health: “Consolidation actually should take friction out, drive affordability and drive simplicity.”

Rep. Smucker: “But it hasn't worked. You would expect if a marketplace is working properly, that perhaps under consolidation, we would see lower or at least slower growing premiums in highly concentrated markets. But that's just simply not happening today.”

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