Insurance CEOs’ bad day on Capitol Hill

Insurance CEOs’ bad day on Capitol Hill

“Excessive.” “Criminal.” “It’s just wrong.”

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Those are some of the words members of Congress used to describe health insurance companies during two hearings Thursday, hearings that often turned contentious as lawmakers ridiculed the CEOs of some of America’s largest taxpayers for making profits in the at the expense of the average American.

The CEOs of UnitedHealth, CVS, Cigna, Elevance and Ascendiun were bombarded with questions and criticism about denial of care, market concentration and their multimillion-dollar pay packages at a time when millions of Americans are losing their health insurance.

“Profits have been put above patients. And profits have been put above those who care for patients,” Rep. Greg Murphy, R.N.C., said during the hearing before the House Ways and Means Committee. “He has openly abused his position of authority to provide medical care to patients in this country.”

Payer executives: Stephen Hemsley, CEO of UnitedHealth; David Joyner, CEO of CVS; David Cordani, CEO of Cigna; and Gail Boudreaux, CEO of Elevance, admitted they could do more to improve affordability and access.

However, CEOs attempted to deflect blame, arguing that other players in the health system, especially hospitals and pharmaceutical companies, are responsible for the higher costs.

The notable outlier was Paul Markovich, CEO of Ascendiun, the nonprofit parent company of the larger California Blues plan.

Health insurers focus on profits as much as everyone else, Markovich said in his prepared testimony.

“Our health system is bankrupt and failing us,” Markovich said, adding that participants in the system – including health plans – have put profits before patients or have become complacent about the complexity they have created.

“YOI have come to the conclusion that the system will not fix itself. “The healthcare system needs some tough love and clear direction, and the American government is best positioned to provide both,” he said.

‘The patient is screwed’

The insurance CEOs found few allies during their marathon testimony, in front of the Energy and Commerce health subcommittee in the morning and before the entire Ways and Means committee in the afternoon.

Executives agreed that health care is confusing and inefficient and that prices are too high. But they have already fixed or are working on some of the biggest consumer complaints, such as onerous prior authorization policies, and are generally not to blame for the higher costs, they said.

“The cost of health insurance fundamentally reflects the cost of health care itself. It is more of an effect than a cause,” Hemsley said in prepared testimony. “YOIf insurance costs increase even as we compete aggressively against other companies, this indicates increasing costs of health services, medications and increasing volumes of care activity.”

Premiums reflect the cost of care, which has increased significantly due to the United States’ older and sicker population, strong supplier consolidation, the entry of high-cost drugs into the market, and other factors.

Still, CEOs’ arguments that they keep costs down by negotiating with suppliers and drugmakers largely fell on deaf ears.

“I have not met any American who believes that health insurers are effective in reducing costs,” said Ways and Means Chairman J.Jason Smith, R-Mo.

Legislators from both parties were particularly concerned about rampant vertical integration. The for-profit insurance giants aren’t just insurers: The companies also own physician groups, pharmacies, pharmacy benefit managers and other subsidiaries that give them enormous control over multiple markets in the American healthcare system.

That control may be driving higher spending. For example, data shows that doctors and pharmacies affiliated with a plan typically receive higher rates than non-affiliated providers.

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