Darwin's Our Take: Health insurance CEOs catch flak at House hearings on affordability, blame others for high costs

In two hearings on Thursday, House committee members questioned the top executives of five large commercial health insurers about soaring health insurance costs, insurer practices that deny and delay care, executive compensation, and in some cases, the vertical integration of their companies.

For their part, the CEOs basically placed the blame for the high cost of health care elsewhere — chiefly on hospitals and drug manufacturers.

Testifying at the hearings were Unit­ed­Health Group CEO Stephen Hemsley, CVS Health CEO David Joyner, Elevance Health CEO Gail Boudreaux, Cigna Group CEO David Cordani, and Ascendiun CEO Paul Markovich. Ascendiun is the par­ent com­pa­ny of Blue Shield of Cal­i­for­nia.

Members of the Energy and Commerce Committee led the morning hearing; members of the Ways and Means Committee conducted the afternoon session.

While the CEOs agreed that the cost of care is too high, they all pointed to other participants in the health care system when assigning blame and for the most part downplayed the role their own companies play.

Hemsley acknowledged in his written statement that UnitedHealth shares responsibility “for the way things are today” in the U.S. health system, whereas Ascendiun’s Markovich, in his statement, specifically included health plans among those who share responsibility for inflated costs.

“The American health care system is bankrupting and failing us,” Markovich said. “It is way too expensive, too impersonal, doesn’t cover everyone, achieves inferior outcomes relative to other countries, is often described as a ‘sick care system,’ and is mistrusted by too many Americans.”

Markovich said the system has “too many defenders” who “put profits over patients and are complacent about how complex, inconvenient, and inefficient our system is.” He included health plans, hospitals, physicians, pharmaceutical companies, and others among the guilty and said “the system will not fix itself.”

Markovich also recommended several measures to improve the health care system, such as enabling all Americans to have affordable health care coverage and access; making prescription drugs more affordable and accessible (largely through pharmacy benefit management reforms); digitizing, simplifying, and automating the health care system; reforming prior authorization, and “putting the entire health care system on a budget,” which would entail breaking the fee-for-service model.

He said Blue Shield of California has “done a lot” to address these issues but has “much more work to do.”

All of the CEOs, including Markovich, brought up unsustainable increases in medical spending and prescription drug pricing as the major drivers of health spending — and the root causes of higher costs for insurance coverage.

UnitedHealth’s Hemsley said, “The cost of health insurance is driven by the cost of health care. It is a symptom, not a cause. Premium rates are based on two key factors: how much care is used and how much is charged for that care.”

According to UnitedHealth’s calculations, health care spending has increased 242% on a per-person basis in the last 25 years, whereas overall inflation has increased approximately 87%.

“[H]ospital prices have increased nearly three times faster than inflation over the past 25 years and account for more than 30% of what America spends on health care each year,” Hemsley said in the statement. “At for-profit hospitals, pricing increases for services, not hight rates of care activity, have been the primary driver of higher overall hospital spending.”

Hemsley claimed that surgical procedures historically have cost two to four times more in the U.S. than in other industrialized countries, “helping to generate profit margins nearly four times greater than health insurers’ and twice those of home care and hospice providers.”

He also mentioned hospital consolidation and higher pricing for inpatient procedures (vs. performing them in outpatient departments or at an ambulatory surgery center) as contributors to increased overall hospital pricing.

Higher costs for specialty services, “driven in part by the overuse of diagnostic testing,” and greater drug spend have also fueled higher costs of care, according to Hemsley.

“[Drug] manufacturers enjoy margins as much as 10 times greater than the pharmacy benefit managers that negotiate lower prices on behalf of consumers and employers,” he noted.

Hemsley essentially painted health insurers as good guys trying to “hold the line” against increasing health care prices (for instance, through price negotiations with hospitals, physicians, and drug companies) “on behalf of consumers, employers, and taxpayers.”

In his prepared statement, CVS Health’s Joyner likewise called out the “[g]reater demand for care, growing medical provider costs, and persistently high prices for hospital care and prescription drugs” as the drivers of rising health care costs.

Joyner listed four specific ways CVS Health is attempting to make care more affordable and accessible: by expanding access to coverage that rewards providers tor keeping patients healthy; reducing administrative burden by requiring fewer prior authorizations; aggressively promoting the use of biosimilars; and creating a “modern” consumer health care platform.

CEOs Boudreaux and Cordani touched upon many of these same points in their prepared statements (available here).

In general, representatives from both political parties seemed unswayed and unimpressed by the CEOs’ testimonies and responses to questions.

For example, when Rep. Alexandria Ocasio-Cortez, D-N.Y., brought up CVS Health’s vertically integrated business model — which makes it possible for consumers to obtain health insurance, access medical care, have their prescriptions filled, and in some cases even get their prescription drug manufactured, all by a CVS subsidiary — Joyner said, “I suggest it’s a model that works really well for the consumer.”  

Ocasio-Cortez replied, “Yeah, I think it works very well for CVS. The health insurance gets a cut, the pharmacy benefits manager gets a cut, the drug manufacturer gets a cut. And the patient gets screwed.”

Rep. Lori Trahan, D-Mass., said vertical integration has resulted in “a system of haves and have-nots, where market power is concentrated, where competition is weakened, independent providers are squeezed out, and families are forced to pay more. The lack of real checks and balances is bad for patients. It’s bad for innovation, and it’s bad for affordability.”

In defending vertical integration, UnitedHealth’s Hemsley said it results in a better care experience and adds more value to the overall health care environment — for example, through better coordination of care and use of data.

During an exchange between Hemsley and Rep. Kim Schrier, D-Wash., about prior authorization denials, Schrier said, “[T]his looks like your business model. It looks like you bet on wearing patients down, and then they either decide to just eat the cost, or they die before they get the care they need.”

When Rep. Nanette Barragan, D-Calif., referred to a chart showing UnitedHealth’s in-network denial rate in 2023 was 33% for ACA plan claims, Hemsley countered that UnitedHealth’s overall claim detail rate was less than 2%.

Rep. Buddy Carter, R-Ga., confronted CVS Health’s Joyner about excessive executive compensation, stating that Joyner and another C-suite executive at CVS Health received $41 million in 2024.

“This is enough to cover the premiums for thousands of American families,” Carter said. “How do you justify getting paid that much when so many of your patients struggle to afford skyrocketing premiums?”

Joyner replied, “That was not my compensation you referenced. This past year, my compensation was $17 million, of which $1.1 [million] was my base salary. The rest was long-term incentives.”

Joyner said he returned his bonus to the company’s employee relief fund.  

Barragan also criticized CEO compensation packages, suggesting that stock options and performance bonuses could shift executives’ priorities away from patients in favor of shareholders and the company’s bottom line.

She questioned why executives make so much while patients “stretch every penny and dime to buy health care, just to have the claim denied.”

The day before the hearings, UnitedHealth tried to get out in front of the anticipated criticism by announcing that the company intends to return profits made in the ACA exchanges this year to customers. The announcement was embedded in Hemsley’s prepared statement:

“Though UnitedHealthcare is a relatively small participant in the individual ACA market, we will voluntarily eliminate and rebate our profits this year for these coverages, as Congress continues to work toward more long-term solutions.”

The day of the hearings, CVS Health issued a press release on how it is making insurance “simpler and more affordable.”

OUR TAKE: Although Democrats and Republicans sparred with each other during the hearings about the Affordable Care Act and the subsidies that expired at the end of 2025, they formed a united front in taking the health insurance CEOs to task.

Now if they could just find some common ground on creating and passing legislation that would bring down health care costs.

In shifting the blame to other participants in the health care ecosystem, insurers are employing a defense strategy similar to the one PBMs have long used.

And just like PBMs, now that health insurers are facing greater scrutiny they’ve begun making efforts to change some of their practices. It’s probably too little, too late.

Then again, PBMs have yet to face any real consequences in terms of federal legislation because, for years, Congress has been ineffectual. Health insurers may benefit in the same way.

The American Hospital Association released a comprehensive statement addressing many points raised during the hearings. It’s worth reading.

Health Care Rounds #198: South Shore Health’s Roadmap for Success

Independent community health systems are under increasing pressure as health care continues to consolidate. What does it really take to remain independent while continuing to deliver high-quality care at scale? Dr. Allen Smith, President & CEO, and Dr. Sam Ash, CIO of South Shore Health join John to discuss maintaining independence as a community health system, building connected infrastructure across care settings, and approaching technology adoption with discipline and purpose. Watch here or find Health Care Rounds on your favorite podcast platform.

What else you need to know

Providence will consider more divestitures and partnerships as the Renton, Wash.-based health system continues implementing the strategic restructuring initiative it announced last year. The not-for-profit health system, one of the 10 largest in the U.S., hopes to achieve an estimated $2 billion in performance improvements within the next few years. To that end, Providence said in a statement that it may partner “in new ways to meet the evolving needs of our communities,” adding that it may “co-own services or transfer ownership to organizations that are well-positioned to help them grow and thrive,” according to Becker’s Hospital Review.

Earlier this month, Providence sold Tegria Services Group, a health IT consulting business the health system launched in 2020, to Altaris, an investment firm based in New York City, for an undisclosed sum. Last year, Providence sold 10 skilled nursing facilities to The Ensign Group and transitioned its network of home health and hospice services in California to an expanded joint venture with Compassus. Modern Healthcare reported that Providence is thinking about selling additional assets, including, potentially, some of its 51 hospitals.

GSK agreed to acquire Rapt Therapeutics in a deal valued at $2.2 billion. Rapt, a biotech with headquarters in South San Francisco, develops novel therapies for treating inflammatory and immunologic diseases. Rapt’s lead candidate, ozureprubart, targets IgE antibodies that trigger potentially fatal allergic reactions. If the investigational drug makes it to market, it could compete with Genentech and Novartis’ Xolair (omalizumab), which is indicated to decrease allergic reactions to food, among other indications. Xolair is administered subcutaneously, typically every two or four weeks. Rapt believes ozureprubart could be effective when administered every eight to 12 weeks and has the potential to be a best-in-class treatment. The definitive agreement calls for GSK to pay Rapt shareholders $58 per share in cash. The U.K.-based drugmaker will also be responsible for milestone and royalty payments to Rapt’s partner, Shanghai Jeyou Pharmaceutical Co., according to the announcement. The companies expect to complete the transaction in this quarter if customary closing conditions are met.

Kaiser Permanente and Sutter Health seem to be preparing for “major expansion” and strategic growth in the year ahead, including potential out-of-state transactions, Becker’s Hospital Review reported. The speculation is based on two recent executive role updates: Jim Marcotte, who previously served as Kaiser Permanente’s director of financial planning and analysis, posted on social media that he has been named vice president of mergers and acquisitions and partnership development strategy implementation at the Oakland-based health system. Sacramento-based Sutter Health, meanwhile, named Scott Nordlund as its new executive vice president of corporate development and partnerships. According to the announcement, Nordlund will be responsible for “shaping and executing systemwide business and national partnership development outside California.” Prior to joining Sutter Health, Nordlund was the chief strategy and growth officer at Phoenix-based Banner Health.

Amazon One Medical launched an agentic AI-powered assistant with functions similar to those that ChatGPT for Health and Anthropic’s Claude for Healthcare can perform, such as answering health questions, explaining lab results, scheduling appointments, and managing medications, according to Amazon’s post. The new chatbot, called Health AI, is accessible to One Medical members 24/7 through the One Medical app and features HIPAA-compliant security. Amazon said Health AI provides personalized insights drawn from members’ complete medical records, lab results, and current medications, noting that users do not have to manually upload their health data from multiple providers and services.

What we’re reading

US Congress set to reject Trump’s sweeping NIH budget cuts. Nature, 1.20.26

Challenging Claims of an Autism Epidemic — Misconceptions and a Path Forward. NEJM, 1.17.26 (registration or subscription required)

Health Policy At A Crossroads: What To Watch In 2026. Health Affairs, 1.20.26