[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]
REDUCING HEALTH CARE COSTS FOR
WORKING AMERICANS AND THEIR FAMILIES
=======================================================================
HEARING
Before The
SUBCOMMITTEE ON HEALTH,
EMPLOYMENT, LABOR, AND PENSIONS
of the
COMMITTEE ON EDUCATION AND THE
WORKFORCE
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD IN WASHINGTON, DC, APRIL 26, 2023
__________
Serial No. 118-7
__________
Printed for the use of the Committee on Education and the Workforce
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available via: edworkforce.house.gov or www.govinfo.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
51-857 PDF WASHINGTON : 2024
COMMITTEE ON EDUCATION AND THE WORKFORCE
VIRGINIA FOXX, North Carolina, Chairwoman
JOE WILSON, South Carolina ROBERT C. ``BOBBY'' SCOTT, Virginia,
GLENN THOMPSON, Pennsylvania Ranking Member
TIM WALBERG, Michigan RAUL M. GRIJALVA, Arizona
GLENN GROTHMAN, Wisconsin JOE COURTNEY, Connecticut
ELISE M. STEFANIK, New York GREGORIO KILILI CAMACHO SABLAN,
RICK W. ALLEN, Georgia Northern Mariana Islands
JIM BANKS, Indiana FREDERICA S. WILSON, Florida
JAMES COMER, Kentucky SUZANNE BONAMICI, Oregon
LLOYD SMUCKER, Pennsylvania MARK TAKANO, California
BURGESS OWENS, Utah ALMA S. ADAMS, North Carolina
BOB GOOD, Virginia MARK DeSAULNIER, California
LISA McCLAIN, Michigan DONALD NORCROSS, New Jersey
MARY MILLER, Illinois PRAMILA JAYAPAL, Washington
MICHELLE STEEL, California SUSAN WILD, Pennsylvania
RON ESTES, Kansas LUCY McBATH, Georgia
JULIA LETLOW, Louisiana JAHANA HAYES, Connecticut
KEVIN KILEY, California ILHAN OMAR, Minnesota
AARON BEAN, Florida HALEY M. STEVENS, Michigan
ERIC BURLISON, Missouri TERESA LEGER FERNANDEZ, New Mexico
NATHANIEL MORAN, Texas KATHY MANNING, North Carolina
JOHN JAMES, Michigan FRANK J. MRVAN, Indiana
LORI CHAVEZ-DeREMER, Oregon JAMAAL BOWMAN, New York
BRANDON WILLIAMS, New York
ERIN HOUCHIN, Indiana
Cyrus Artz, Staff Director
Veronique Pluviose, Minority Staff Director
------
SUBCOMMITTEE ON HEALTH, EMPLOYMENT, LABOR, AND PENSIONS
BOB GOOD, Virginia, Chairman
JOE WILSON, South Carolina MARK DeSAULNIER, California
TIM WALBERG, Michigan Ranking Member
RICK ALLEN, Georgia JOE COURTNEY, Connecticut
JIM BANKS, Indiana DONALD NORCROSS, New Jersey
JAMES COMER, Kentucky SUSAN WILD, Pennsylvania
LLOYD SMUCKER, Pennsylvania FRANK J. MRVAN, Indiana
MICHELLE STEEL, California PRAMILA, JAYAPAL, Washington
AARON BEAN, Florida LUCY McBATH, Georgia
ERIC BURLISON, Missouri JAHANA HAYES, Connecticut
LORI CHAVEZ-DeREMER, Oregon ILHAN OMAR, Minnesota
ERIN HOUCHIN, Indiana KATHY MANNING, North Carolina
C O N T E N T S
----------
Page
Hearing held on April 26, 2023................................... 1
OPENING STATEMENTS
Good, Hon. Bob, Chairman, Subcommittee on Health, Employment,
Labor, an Pensions......................................... 1
Prepared statement of.................................... 3
DeSaulnier, Hon. Mark, Ranking Member, Subcommittee on
Health, Employment, Labor, an Pensions..................... 4
Prepared statement of.................................... 6
WITNESSES
Watts, Tracy, Senior Partner, Mercer......................... 7
Prepared statement of.................................... 10
Strouse, Marcie, Partner, Capitol Benefits Group............. 54
Prepared statement of.................................... 56
Corlette, Sabrina, J.D., Senior Research Professor, Center on
Health Insurance Reforms, Georgetown University's Health
Policy Institute........................................... 60
Prepared statement of.................................... 62
White, Joel, President, Council for Affordable Health
Coverage (CAHC)............................................ 75
Prepared statement of.................................... 77
ADDITIONAL SUBMISSIONS
Chairman Good:
Letter dated April 25, 2023, Americans for Prosperity.... 125
Letter dated April 26, 2023, from American Hospital
Association............................................ 127
Letter dated April 25, 2023, from a non-partisan group of
organizations.......................................... 134
Letter dated April 26, 2023, from National Association of
Benefits and Insurance Professionals................... 136
Letter from Better Solutions for Healthcare.............. 143
Statement dated April 26, 2023, from The Coalition To
Protect and Promote Association Health Plans........... 144
Letter dated April 26, 2023, from The Alliance To Fight
for Health Care........................................ 154
Statement from Partnership for Employer-Sponsored
Coverage............................................... 163
Letter dated April 26, 2023, from Careviso............... 169
Letter dated April 26, 2023, from Blue Cross Blue Shield
Association............................................ 171
Policy Brief dated April 26, 2023, from Paragon Health
Institute.............................................. 173
Ranking Member Scott:
Letter dated April 26, 2023, signed by 25 patient and
consumer organizations................................. 113
Letter dated April 26, 2023, from Families USA........... 117
QUESTIONS FOR THE RECORD
Response to question submitted for the record by:
Sabrina Corlette......................................... 184
Marcie Strouse........................................... 192
Tracy Watts.............................................. 196
Joel White............................................... 204
REDUCING HEALTH CARE COSTS FOR
WORKING AMERICANS AND THEIR FAMILIES
----------
Wednesday, April 26, 2023
House of Representatives,
Subcommittee on Health, Employment, Labor, and
Pensions,
Committee on Education and the Workforce,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:15 a.m.,
Room 2175, Rayburn House Office Building, Hon. Bob Good
[chairman of the subcommittee] presiding.
Present: Representatives Good, Walberg, Allen, Banks,
Smucker, Bean, Burlison, DeSaulnier, Courtney, Norcross, Wild,
Jayapal, McBath, Hayes, Omar, Manning, Scott.
Staff present: Cyrus Artz, Staff Director; Mindy Barry,
General Counsel; Michael Davis, Legislative Assistant; Cate
Dillon, Director of Operations; Daniel Fuenzalida, Staff
Assistant; Sheila Havenner, Director of Information Technology;
Taylor Hittle, Professional Staff Member; Alex Knorr,
Legislative Assistant; Andrew Kuzy, Press Assistant; John
Martin, Deputy Director of Workforce Policy/Counsel; Hannah
Matesic, Director of Member Services and Coalitions; Audra
McGeorge, Communications Director; Rebecca Powell, Staff
Assistant; Seth Waugh, Brittany Alston, Minority Operations
Assistant; Ilana Brunner, Minority General Counsel; Daniel
Foster, Minority Health and Labor Counsel; Carrie Hughes,
Minority Director of Health and Human Services Policy;
Stephanie Lalle, Minority Communications Director; Kota
Mizutani, Minority Deputy Communications Director; Veronique
Pluviose, Minority Staff Director; Dhrtvan Sherman, Minority
Staff Assistant; Banyon Vassar, Minority IT Administrator.
Chairman Good. The Subcommittee on Health Employment Labor
and Pensions will come to order. I note that a quorum is
present. Without objection, the Chair is authorized to call a
recess at any time. The subcommittee is meeting today on
solutions to address healthcare challenges facing working
families and small businesses.
Good morning, everyone, and welcome to today's hearing. I
can remember President Obama's promises regarding Obamacare. If
you like your plan, you can keep your plan. If you like your
doctor, you can keep your doctor. Premiums will go down with
the Affordable Care Act. Sadly, but not surprising, these were
all misleading, empty, broken promises.
In reality, Obamacare's regulations mandate inflationary
subsidies and misguided economic incentives have made
healthcare even more unaffordable for Americans in the
commercial market. It is no surprise that for 13 years of
Obamacare, three in four Americans grade the healthcare system
as a D or an F.
Working Americans and their families are being crushed, and
the American people are tired of their premiums going up. They
are tired of their deductibles going up. They are tired of
their copay going up. Today, in this first Health Employment
Labor and Pension Subcommittee hearing of the 118th Congress,
House Republicans will put forth a vision for free market
healthcare reform that offers Americans much needed relief.
As a nation, we cannot settle for less than American
exceptionalism. We cannot turn to socialist countries for our
healthcare advice. We need to listen to the American people. A
vast majority of Americans are actually satisfied with their
employer sponsored insurance.
78 percent of employees choose to enroll in employer
sponsored insurance when given the option. It is still too
expensive. That is because Democrats have created an unlevel
playing field for employers. Democrats are not interested in
addressing affordability issues for employers because the truth
is they are scheming with the Biden administration to force
every American into a government funded one size fits all plan,
such as the Obamacare Marketplace Plan.
By increasing Obamacare subsidies and overregulating the
market, employer-based healthcare is becoming unaffordable,
especially for small business owners. This is an intentional
attack by Democrats on private insurance is the proverbial
trojan horse for Medicare for all. One size does not fit all.
The correct path forward is to respect and protect a free
market and individual choice. Republican solutions seek to
decrease healthcare costs, while strengthening the public
option that 159 million Americans who are covered enjoy today.
Yesterday, I introduced the Self Insurance Protect Act. This
bill allows small businesses to access stock loss insurance, a
form of insurance that helps employers self-insure, and
protects them from catastrophic health costs.
Another reasonable solution is to increase association
health plans. These plans allow Americans to save up to 50
percent on healthcare costs by allowing small businesses to
band together to offer lower cost healthcare insurance like
large employers are able to do.
The free market and increased competition will lower prices
if we are bold enough to let them do that. A free market only
works when there is competition, transparency, and
accountability. Consolidation of marketplace has led to
dishonest billing practices. Dishonest billing occurs when big
hospitals buy up independent doctors' offices, and then charge
higher prices for doctor services as if they were occurring in
a hospital setting.
Hospitals should bill the proper rate for their services
and not use bogus facility fees as an excuse to tack on
thousands of dollars in extra charges. Finally, we should
ensure that workers retain access to the deregulated telehealth
options they enjoyed during the COVID-19 health restrictions.
With that, I look forward to the hearing today, and yield to
our Ranking Member.
[The Statement of Chairman Good follows:]
Statement of Hon. Bob Good, Chairman, Subcommittee on Health,
Employment, Labor, and Pensions
I remember President Obama's promises regarding Obamacare:
``If you like your plan, you can keep your plan.''
``If you like your doctor, you can keep your doctor.''
``Premiums will go down with the Affordable Care Act.''
Sadly, but not surprisingly, these were all misleading, empty,
broken promises.
In reality, Obamacare's regulations, mandates, inflationary
subsidies, and misguided economic incentives have made health care even
more unaffordable for Americans in the commercial market.
After thirteen years of Obamacare, three in four Americans grade
the health care system as a ``D'' or an ``F.''
Working Americans and their families are being crushed. The
American people are tired of their premiums going up. They are tired of
their deductibles going up. They are tired of their co-pays going up.
Today, in the first Health, Employment, Labor, and Pensions
Subcommittee hearing of the 118th Congress, House Republicans will put
forth a vision for free-market health care reform that offers Americans
much-needed relief.
As a nation, we cannot settle for less than American
exceptionalism. We cannot turn to socialist countries for health care
advice.
We need to listen to the American people. A vast majority of
Americans are actually satisfied with their employer-sponsored
insurance. Seventy-eight percent of employees decide to enroll in
employer-sponsored insurance when given the option. It is still too
expensive.
That is because Democrats have created an unlevel playing field for
employers.
Democrats are not interested in addressing affordability issues for
employers, because the truth is, they are scheming with the Biden
administration to force every American into a government-funded, one-
size-fits-all plan, such as the Obamacare marketplace plans.
By increasing Obamacare subsidies and overregulating the market,
employer-based health care is becoming unaffordable, especially for
small business owners.
This is an intentional attack by Democrats on private insurance. It
is the proverbial ``trojan horse'' for Medicare-for-All.
One size does not fit all. The correct path forward is to respect
and protect the free market, and individual choice.
Republican solutions seek to decrease health care costs while
strengthening the private options that 159 million covered Americans
enjoy.
Yesterday, I introduced the Self-Insurance Protection Act. This
bill allows small businesses to access stop-loss insurance, a form of
insurance that helps employers self-insure and protects them from
catastrophic health costs.
Another reasonable solution is to increase Association Health
Plans. These plans allow Americans to save up to 50 percent on health
care costs by allowing small businesses to band together to offer
lower-cost health insurance like larger employers are able to do. The
free market and increased competition will lower prices if we are bold
enough to let them.
A free market only works when there is competition, transparency,
and accountability. Consolidation in the marketplace has led to
dishonest billing practices. Dishonest billing occurs when big
hospitals buy up independent doctors' offices and then charge higher
prices for doctor services as if they were occurring in a hospital
setting.
Hospitals should bill the proper rate for their services and not
use bogus facility fees as an excuse to tack on thousands of extra
dollars in charges.
Finally, we should ensure that workers retain access to the
expanded telehealth options they enjoyed during the COVID-19 waivers.
On May 11, employees may lose access to telehealth coverage when the
COVID-19 Public Health Emergency expires. The Telehealth Benefit
Expansion for Workers Act will ensure that telehealth coverage is not
terminated for these workers.
Stop-loss insurance, Association Health Plans, honest billing, and
increased access to telehealth will help increase affordability for
American workers and their families.
Employer-sponsored insurance is the greatest threat to, or defense
against--depending on your perspective--Medicare-for-All.
Letting Democrats continue to further diminish employer-sponsored
insurance--to the detriment of American families--is a major step
toward realizing their coveted cradle-to-grave nanny state.
That is not America. We are the most free and prosperous nation in
history. Small business owners and working families, through hard work,
perseverance, and determination have made our nation great. Washington
bureaucrats should stay out of the way.
Let us empower Americans to have the health care they choose at an
affordable cost.
______
Mr. DeSaulnier. Thank you, Mr. Chairman. I want to thank
the witnesses for being here. I appreciate the comments as a
former small business owner or restaurant owner. 13 years ago,
48 million Americans, more than 14 percent of the U.S.
population, did not have health coverage at all.
Insurers could deny people coverage because of pre-existing
conditions. Insurers could charge women more than men for
health insurance. Most individual market plans only covered a
fraction of prescription drugs. Today, more Americans are
covered and have better health care protections than ever
before.
This is a direct result of the key steps Democrats took to
expand and protect access to affordable high-quality health
care coverage. In 2010, President Barack Obama signed into law
the Affordable Care Act, which provided millions of Americans
with access to quality coverage and key consumer protections.
Thanks to this milestone achievement, insurers could no longer
deny people coverage for pre-existing conditions.
Plans must cover preventative services, like cancer
screenings and birth control at no cost. Mental health and
substance use disorder treatment is considered an essential
health benefit. During the last two Congresses we built on the
progress of the ACA and took decisive steps to lower health
care costs even further for Americans.
We passed bipartisan legislation to protect Americans from
surprise medical billing, and improved transparency and health
care. Congressional Democrats passed the American Rescue Plan,
which enhanced the ACA tax credits to lower monthly costs for
low-income individuals, and eliminated the subsidy cliff, so
that more low-and moderate-income individuals could get
coverage.
Last, Democrats passed the Inflation Reduction Act. This
historic legislation extended the premium on tax credit
enhancements, capped the cost of insulin. For people with
Medicare, and for the first time, directed the Federal
Government to negotiate lower prices for prescription drugs
covered by Medicare.
These victories have yielded real results, lowering costs,
and making health care more affordable. Clearly, we have a
difference of perspective. In August, we brought the number of
Americans without health insurance down to the lowest level
ever. In fact, during the most recent Open Enrollment Period, a
record 16.3 million people signed up for coverage, and the
average consumer has saved hundreds of dollars a year in
premiums.
Unfortunately, our progress under the ACA continues to be
threatened. For more than a decade, our colleagues and
conservative groups have worked relentlessly to erode or
eliminate the ACA. Just last month, the conservative judge in
Texas ruled to weaken the ACA's preventive services
requirement.
This has jeopardized access to preventative care ACA for
millions who otherwise would not be able to afford it. For
context, this is the same judge who attempted to eliminate the
entire ACA, before it was upheld by the U.S. Supreme Court. I
am concerned about the development since I know that many of us
may not see eye to eye on many things, but the value and
importance of preventative care is undeniable to ensuring the
health and well-being of our country.
Moreover, we know that preventative care can result in
lower costs by managing chronic disease, supporting mental
health costs, and more, and it helps employers and employer-
based health care. Unfortunately, many of our colleagues'
proposals that we will hear today could undermine affordability
and ultimately make it harder, not easier, to access quality
coverage.
However, we will keep an open mind and hope for progress in
compromise with our colleagues. Expanding American health plans
might provide low premiums for some enrollees, but it would
increase costs for other consumers in the traditional insurance
market, while adding nothing to address the underlying price of
health care.
This is a bad deal for American workers, and for small
businesses. Similarly, exempting telehealth plans from key
consumer protection, such as mental health parity on the ACA's
preventive services requirement, could expose workers to
deceptive marketing practices that we have seen emerge when
employers offer similar unregulated arrangements.
Done properly, I think that is something we could look at.
Instead of going backward, we should be focusing on expanding
quality health coverage for all Americans, workers and
families, employers, and their employees.
This Congress, we have several opportunities to make
bipartisan progress, and I look forward to that engaged
discussion, irrespective of where we may start on these issues.
We can work together to strengthen the ACA, and close the
Medicaid coverage gap, which would help millions of people
access subsidized coverage.
We can bolster enforcement of mental health parity and
ensure that health plans follow the law. We can build on our
progress to empower the Federal Government and all Americans to
be able to negotiate and have the benefit of lower costs for
even higher quality and more controls over prescription drugs,
many of which have started their discovery process with
taxpayer investments at the National Institutes of Health.
We can increase transparency in our health care system and
take a careful look at business practices that lead to higher
prices and provider consolidation. Look, there are many
different views on how to lower health care costs, and I think
you have heard some different perspectives already from the
Chairman and myself.
I hope we can work together in good faith to deliver on our
commitment, that we mutually agree that extraordinary health
care, and the idea of American exceptionalism is something we
should all expect for all Americans. I look forward to the
discussion, and I yield back.
[The Statement of Ranking Member DeSaulnier follows:]
Statement of Hon. Mark DeSaulnier, Ranking Member, Subcommittee on
Health, Employment, Labor, and Pensions
Thank you, Mr. Chairman. I want to thank the witnesses for being
here. I appreciate the comments as a former small business owner-a
restaurant owner.
Thirteen years ago, 48 million Americans-more than 14 percent of
the U.S. population-did not have health coverage at all.
Insurers could deny people coverage because of pre-existing
conditions. Insurers could charge women more than men for health
insurance.
Most individual market plans only covered a fraction of
prescription drugs. Today, more Americans are covered, and have better
health care protections, than ever before.
This is the direct result of the key steps Democrats took to expand
and protect access to affordable, high-quality health care coverage.
In 2010, President Barack Obama signed into law the Affordable Care
Act, which provided millions of Americans with access to quality
coverage and key consumer protections. Thanks to this milestone
achievement, insurers can no longer deny people coverage for pre-
existing conditions. Plans must cover preventive services--like cancer
screenings and birth control--at no cost. Mental health and substance
use disorder treatment is considered an essential health benefit.
During the last two Congresses, we built on the progress of the ACA
and took decisive steps to lower health care costs even further for
Americans.
We passed bipartisan legislation to protect Americans from surprise
medical billing and improve transparency in health care.
Congressional Democrats passed the American Rescue Plan, which
enhanced the ACA tax credits to lower monthly costs for low-income
individuals and eliminated the subsidy ``cliff'' so that more low- and
moderate-income individuals could get coverage.
Lastly, Democrats passed the Inflation Reduction Act. This historic
legislation extended the premium tax credit enhancements, capped the
cost of insulin for people with Medicare, and for the first time
directed the federal government to negotiate lower prices for
prescription drugs covered by Medicare.
These victories have yielded real results--lowering costs and
making health care more affordable. Clearly, we have a difference of
perspective.
In August, we brought the number of Americans without health
insurance down to the lowest level ever. In fact, during the most
recent Open Enrollment Period, a record 16.3 million people signed up
for coverage. The average consumer has saved hundreds of dollars a year
in premiums.
Unfortunately, our progress under the ACA continues to be
threatened. For more than a decade, our colleagues and conservative
groups have worked relentlessly to erode or eliminate the ACA.
Just last month, a conservative judge in Texas ruled to weaken the
ACA's preventive services requirement. This has jeopardized access to
preventive care for millions who otherwise may not be able to afford
it. For context, this is the same judge who attempted to eliminate the
entire ACA before it was upheld by the United States Supreme Court.
I am concerned about the development, since I know that many of us
may not see eye to eye on many things, but the value and importance of
preventive care is undeniable to ensuring the health and wellbeing of
our country. Moreover, we know that preventive care can result in lower
costs by managing chronic disease, supporting mental health costs, and
more. It helps employers with employer-based health care.
Unfortunately, many of our colleagues' proposals that we will hear
today could undermine affordability and ultimately make it harder--not
easier--to access quality coverage. However, we will keep an open mind
and hope for progress and compromise with our colleagues.
Expanding Association Health Plans might provide lower premiums for
some enrollees, but it would increase costs for other consumers in the
traditional insurance market while adding nothing to address the
underlying price of health care. This is a bad deal for American
workers and for small businesses.
Similarly, exempting telehealth plans from key consumer
protections, such as mental health parity or the ACA's preventive
services requirement, could expose workers to deceptive marketing
practices that we have seen emerge when employers offer similar
unregulated arrangements. Done properly, I think this is something we
can look at.
Instead of going backwards, we should be focusing on expanding
quality health coverage for all Americans, workers, families, employers
and their employees.
This Congress, we have several opportunities to make bipartisan
progress, and I look forward to that engaged discussion, irrespective
of where we may start on those issues.
We can work together to strengthen the ACA and close the Medicaid
coverage gap, which would help millions of people access subsidized
coverage. We can bolster enforcement of mental health parity and ensure
that health plans follow the law.
We can build on our progress to empower the federal government and
all Americans to be able to negotiate, and have the benefit of, lower
costs for even higher quality and more controls over prescription
drugs--many of which have started their discovery process with taxpayer
investments at the National Institutes of Health.
We can increase transparency in our health care system and take a
careful look at business practices that lead to higher prices and
provider consolidation.
Look, there are many different views on how to lower health care
costs and I think you have heard some different perspectives already
from the Chairman and myself. I hope we can work together in good faith
to deliver on our commitment that we mutually agree that extraordinary
health care, and the idea of American exceptionalism, is something we
should all expect for all Americans.
I look forward to the discussion, and I yield back.
______
Chairman Good. Thank you, Ranking Member DeSaulnier.
Pursuant to Committee Rule 8(c), all members who wish to insert
written statements into the record may do so by submitting them
to the committee clerk electronically, in Microsoft Word format
by 5 p.m., 14 days after the date of this hearing, which is May
10, 2023.
Without objection, the hearing record will remain open for
14 days to allow such statements and other extraneous materials
referenced in the hearing to be submitted for the official
hearing record.
I now turn to the introduction of our distinguished
witnesses. Our first witness is Ms. Tracy Watts, who is a
Senior Partner with Mercer, and leads the company's healthcare
policy and group benefits portfolio for regions of the United
States. Thank you, Ms. Watts.
Our second witness is Ms. Marcie Strouse, who is a small
business owner, and founder of Capitol Benefits Group in Des
Moines, Iowa. Thank you, Ms. Strouse.
Our third witness is Ms. Sabrina Corlette, who is the
Senior Research Professor at the Center on Health Insurance
Reforms, Georgetown University's Health Policies Institute.
Our final witness is Mr. Joel White, who is President,
Council for Affordable Health Coverage. I thank all of our
witnesses for being here today. We look forward to your
testimony.
Pursuant to committee rules, I would ask that each of you
limit your oral presentation to a 5-minute summary of your
written statement, and I would also like to remind the
witnesses be aware of the responsibility to provide accurate
information to this subcommittee. I will first recognize Mrs.
Tracy Watts.
STATEMENT OF MRS. TRACY WATTS, SENIOR PARTNER,
MERCER
Mrs. Watts. My name is Tracy Watts, and I am the Senior
Partner and U.S. Health Policy leader at Mercer. I am also the
immediate past Board Chair of the American Benefits Council. I
have more than 35 years of experience helping large companies
design, finance and manage their health benefit programs to
control costs, and to improve the health of the workforce.
First of all, we applaud the committee's work and
commitment to address healthcare affordability. We surveyed
over 4,000 workers in late 2022, and 68 percent say they had
challenges getting the healthcare that they need for themselves
and for their family.
Those most concerned with affordability are low-income
workers, female workers, workers below the age of 25, and over
the age of 44. Access to healthcare is also an issue, finding a
doctor, getting into a specialist, and getting time off from
work to go to the doctor.
In our employer research two-thirds of large employers say
that improving healthcare affordability for their employees is
a very important, or important priority for the next few years.
A couple of examples of how they are doing that from a plan
design perspective, 39 percent are offering a copay medical
plan with little or no deductible. From a contribution
perspective, 15 percent are offering free employee only
coverage in one medical plan.
Given the outlook for faster healthcare cost growth, you
might expect that employers would start to pull back on health
benefits. From our February/March survey on benefit strategies
for 2024, it does not look like it. Nearly two-thirds say that
they are planning to make enhancements to their health benefits
as a way to improve attraction and retention--two-thirds.
I would like to quickly touch on three topics associated
with new legislation being introduced. Telehealth, when offered
as an accepted benefit, meets a very specific need for certain
employers, with a large number of employees who are not
benefits eligible. These are mostly part-time workers in
retail, hospitality, and healthcare.
Because of legislative uncertainty, we saw a decline in
employers using this strategy. 7 percent use it in 2023, that
is down from 17 percent in 2022. This is a benefit that is
hugely valued by workers, but employers need permanent
legislation for this coverage to be restored.
As an example, we worked with a large restaurant chain that
extended telehealth to its part-time population. They viewed
this benefit as a critical way to provide access to behavioral
health services and appropriate medication when the employee
who was not enrolled in the health plan gets sick. Next, with
regard to legislation to ban unfair hospital billing practices,
market consolidation and cost pressures have driven
opportunistic billing practices by obfuscating where service is
provided.
Non-hospital services are billed using a hospital address
as the place of service to optimize reimbursement at the
hospital reimbursement rate. This raises prices for patients,
it raises prices for employer plan sponsors. It raises prices
for the Federal Government, and it is unfair. The most common
example is the addition of hospital facility charge on a bill
for an office visit that takes place miles away from the
hospital, or worse yet, for a virtual visit.
Another example is an urgent care facility where care is
billed as a hospital emergency department visit. As a country,
we cannot fix this problem if we cannot see the problem. The
practices are increasing the costs for everyone, and if we are
serious about managing costs and making healthcare more
affordable, we need to address the core issue.
We need more transparency on this. With regard to
regulation of stop loss for small businesses, in the small 50
to 499 employee group size, 71 percent of those companies buy
an insured plan. The 29 percent self-fund the stop loss. That
number flips to 71 percent to self-fund the stop loss in the
500 to 999 category.
Self-funding with stop loss allows companies to balance
their financial objectives with their ability to manage risk,
and it allows for greater flexibility to design benefits to
address affordability and employees' needs. In this competitive
environment, even with healthcare inflation, employers are
looking for ways to enhance benefits, and to address
affordability, and that means workers win.
Thank you for the opportunity to be here today.
[The Statement of Tracy Watts follows:]
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Chairman Good. Thank you, Ms. Watts, and we will now go to
our second witness, Ms. Strouse.
STATEMENT OF MS. MARCIE STROUSE, PARTNER, CAPITOL
BENEFITS GROUP
Ms. Strouse. Good morning, Chairman, Ranking member, and
members of the subcommittee. My name is Marcie Strouse, I am a
Partner and Benefits Consultant at Capitol Benefits Group in
Des Moines, Iowa. I am grateful for the opportunity to testify
today on behalf of small business owners nationwide who are
struggling with increasing healthcare costs.
For four decades, the cost of health insurance has remained
the No. 1 problem for small businesses. The problem is now a
crisis, with skyrocketing costs crippling Main Street. In fact,
98 percent of small businesses report that healthcare costs
will become unsustainable in the next 10 years, threatening
their ability to survive and remain competitive.
This is why it is important that lawmakers focus on
policies that empower small business owners, and their
employees, with more choice and control over their healthcare
decisions. For 20 years as a benefits professional, I have had
the privilege of directly helping small business owners
throughout the State of Iowa. I am boots on the ground sitting
across from business owners throughout the State.
As employers look today, we are trying to find ways to help
solve problems. Healthcare affordability is particularly
important for my family as well as we have experienced first-
hand the importance of having access to quality care. We have
three awesome children, Sid, Ella, and Libby. At just 7 years
old, my twins were diagnosed with a neuromuscular disease, and
this experience changed me forever.
Since then, I have worked closely with the Muscular
Dystrophy Association and was appointed by Governor Kim
Reynolds to the Iowa Medical Assistance Advisory Council
working with Medicaid and MCOs in the State. I interact with
small business owners daily, and I am a small business owner
myself.
I can tell you myself the overwhelming stress and anxiety
small business owners are feeling right now. Small business
owners care deeply about their employees, customers, and
communities. They are constantly worried about recruiting and
retaining employees while keeping their businesses afloat, and
this is particularly challenging in this environment, with
sustained high inflation and acute workforce shortages.
Employee benefits have always been important but are even
more crucial now. Our clients are more eager than ever to offer
great benefits, and to meet the needs of a diverse workforce
while remaining competitive, but unfortunately many lack the
options. Many of our clients are forced to make tough choices
every day.
Some go without pay to keep their employees working. Others
are forced to raise their prices or take a profit loss to
contend with rising healthcare costs. For instance, in Polk
County, Iowa, average small business premiums for a family have
increased 85 percent in the last 8 years.
For context, my family is currently enrolled in an
individual grandmother plan through Blue Cross and Blue Shield.
We have a $2,500.00 deductible, and our monthly premium is
$903.00 for our family of five. A similar Affordable Care Act
group plan today would be $1,952.00 in monthly premiums.
The status quo is unsustainable. I hope this committee will
advance policies that promote affordability and increased
choices for small businesses. The following reforms would be a
great starting point in providing much needed relief for many
of our clients.
First, Congress should significantly expand coverage
options allowing small business owners, regardless of industry,
to band together to form association plans, and give them the
same bargaining power big employers have. Congress can also
expand protections for small business owners who choose to
self-insure, expanding access to stop loss and reinsurance, for
instance can reduce financial risk, enhance plan design, and
increase the business's competitiveness.
For example, a recent client with three members was able to
save $5,000.00 annually through a level funded reinsurance
plan. They were also able to lower the out-of-pocket maximum
and copays for their employees. Employers can also benefit from
greater transparency and competition in the industry. The
system is too opaque to the detriment of employers.
Increasing transparency in the pharmacy benefit manager
markets and reigning in healthcare hospital monopolies that
engage in anti-competitive practices is key to lowering the
cost of care. Last, lawmakers should reduce burdens on
employers by streamlining and eliminating unnecessary reporting
requirements.
In conclusion, small business owners deserve relief from
rising healthcare costs. The folks that I work with are not
distant CEOs, but rather hard-working Americans betting on the
promise of the America dream. They are in their communities,
they go to church and school activities with their employees,
and their neighbors, who are also their customers who they care
deeply about.
If small businesses thrive, we all thrive. Thank you for
your attention to this important matter, and for allowing me to
testify today.
[The Statement of Marcie Strouse follows:]
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Chairman Good. Thank you, Ms. Strouse. Now we will hear
from and recognize Ms. Corlette.
STATEMENT OF MS. SABRINA CORLETTE, J.D., SENIOR
RESEARCH PROFESSOR, CENTER ON HEALTH INSURANCE
REFORMS, GEORGETOWN UNIVERSITY'S HEALTH POLICY
INSTITUTE
Ms. Corlette. Thank you, Chairman Good, and Ranking Member
DeSaulnier. It is an honor for me to be part of today's
discussion of policies to help reduce health care costs for
working people and their families. In recent years, Congress
has made several attempts to improve health care access,
affordability, and quality.
None has had a greater impact than the Patient Protection
and Affordable Care Act. Today, Americans with employer-
sponsored insurance take for granted the many protections that
they enjoy under the ACA, including protections for people with
pre-existing conditions, coverage for young adults, cost-free
preventive services, and caps on our annual out-of-pocket
costs.
More recently, the Consolidated Appropriation's Act of 2021
now protects 177 million consumers from unexpected, surprise
medical bills, and helps empower employers to be more effective
purchasers of health benefits. Last year, the Inflation
Reduction Act helped advance the coverage and affordability
gains under the ACA and is lowering prescription drug costs for
Medicare enrollees. However, challenges remain.
Since 1999, employee contributions to premiums have
increased by about 300 percent. Average deductibles for a
single worker have risen from $303.00 in 2006 to $1,562.00 in
2022. The primary reason for the affordability challenges in
employer-sponsored insurance is rising health care prices.
On average, commercial insurers are paying twice the amount
that Medicare pays for the same service. In some markets, three
times the amount. There are a number of reasons for this.
First, consolidation in the health care sector is granting
providers with outsized market power to demand higher
reimbursement rates.
Second, a lack of price transparency has left many
employers in the dark about what is driving cost growth. Third,
many of the third-party vendors and brokers that employers use
to shape and administer their health plans have financial
incentives to keep health care costs high.
Employers cannot solve the affordability crisis in health
care alone. They need support from policymakers. Unfortunately,
three of the four concepts under consideration today do not
address the cost drivers in our system. They simply shift the
burden of cost growth to employers with older, or less healthy
workforces.
First, association health plans. The primary way that AHPs
will offer lower premium rates is through the exemption from
ACA rating regulations. This enables them to cherry pick
healthy employer groups out of the ACA regulated market. AHPs
just create new winners and losers, with the losers being those
who are older and sicker.
Second, the Self-Insurance Protection Act. This proposal
would further encourage the proliferation of level-funded plans
in the small group market, posing two primary risks. First,
many small employers may be exposed to unexpected financial
liability when they self-fund their plan.
Second, if small employers with younger, healthier
employees shift to the level-funded products in significant
numbers, it leaves employers with older and sicker workers
behind. This causes adverse selection where premium rates rise
for employers whose groups cannot pass the stop loss issuer's
underwriting.
Just as with AHPs, this legislation does nothing to address
the underlying reason why there is an affordability crisis for
ESI--the prices that commercial insurers pay for provider
services and prescription drugs. Third, the Telehealth Benefit
Expansion for Workers Act. Let us be clear. There is nothing in
Federal law today that prevents employer group health plans
from covering telehealth services.
Indeed, 96 percent of large firms already do so. Employers
are struggling to afford the rising cost of health care. This
is indisputable. Encouraging the proliferation of stripped-down
telehealth benefits, in lieu of a group health plan, will
discourage care coordination. They do not cover basic things
like hospitalization, prescription drugs, and labs, and they do
not have to comply with consumer protections or mental health
parity.
Last, I want to thank the subcommittee for attempting to
roll back a hospital billing practice that is driving up costs
for employers and enrollees alike. The facility fee proposal
before this subcommittee is a step in the right direction.
Thank you for your time, and I welcome your questions.
[The Statement of Ms. Sabrina Corlette follows:]
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Chairman Good. Thank you, Ms. Corlette. Finally, we will
recognize our fourth witness, Mr. White.
STATEMENT OF MR. JOEL WHITE, PRESIDENT, COUNCIL FOR
AFFORDABLE HEALTH COVERAGE (CAHC)
Mr. White. Thank you, Chairman Good. There we go. How is
that? Thank you, Chairman Good and Ranking Member DeSaulnier
for inviting me here to testify on the ways to reduce
healthcare costs for working Americans and their families. My
name is Joel White, I am the President of the Council for
Affordable Health Coverage.
We are a coalition effort with a single focus of reducing
healthcare costs for all Americans. While I address specific
issues in my written testimony around association health plans,
and self-funded arrangements, I would like to spend a few
moments on the bigger picture.
I think we need to end policies that drive up costs for
employers. Enact reforms that drive down costs for working
Americans. In my mind, this is the most important issue since
most people, about 160 million Americans, get their coverage
through their job. This is more than the total enrollment of
Medicare, Medicaid and Obamacare combined.
Workers like their benefits. A lot. They want to keep their
coverage, and they want to improve it, not replace it with a
government run healthcare program. I think this issue is also
important because businesses and their employees can no longer
shoulder the burden of skyrocketing costs. The average cost of
a family plan today is about $22,000.00.
Costs have increased 288 percent over the last 20 years,
consistently outpacing wages and inflation, making health
coverage less affordable. That is not sustainable. I do not
think it is any secret that the path to single payer healthcare
runs through the small group market, and 90 million workers in
small businesses are a soft target.
Under the Affordable Care Act, moms and pops are burdened
by costly healthcare taxes and regulations that do not apply to
large group plans. Only one-third of small businesses can even
offer to afford to provide coverage. Those that decide to offer
a company plan must then face unfair competition from the
government.
They cannot complete with zero premium Obamacare and
Medicaid plans bankrolled by U.S. taxpayers. Subsequent
regulations have weakened the employer firewall, enriched
subsidies have lured healthy workers into free coverage. This
is a classic, predatory pricing scheme. It makes it unrealistic
for paycheck-to-paycheck workers to choose private coverage,
even when premiums are reasonable.
According to a recent survey by NFIB, equal numbers of
small business owners now get healthcare through the government
as they do through private insurance plans. All totaled 12
million small business workers now populate government-run
safety net programs.
Some would call this a success, but in Obamacare these
workers face deductibles that are twice as high as in the small
group market, and three times higher than the large group plan
average. In both Obamacare and Medicaid, patients often
struggle to find a doctor who will see them.
Millions have a government insurance card but cannot access
the care they need. This is in fact, a disaster for those who
support lower cost, private coverage, and want to preserve
government safety net programs for the truly needy.
Polls consistently show that what employees want in
healthcare is affordable employer benefits options, and they
want their insurance to work better meaning lower out of pocket
costs, and better access to doctors and drugs.
Congress should remove barriers that make it harder to get
coverage at work. There are three things you can do. First,
expand choices for employers and their employees. Second,
provide financial incentives to ensure employer coverage
remains viable. Third, enact policies that lower the cost of
health services and drugs.
In terms of the first bucket, Congress should enact
legislation to create new association health plans, which allow
more employers to band together to pool risk and get a better
deal. This could reduce premiums by up to 30 percent. You
should also create a level playing field by ensuring small
businesses can access the same policies as large businesses,
including self-funded arrangements.
Congress should also allow stand-alone telehealth coverage
for workers, a benefit that expires when the public health
emergency ends in 2 weeks. To provide financial help, Congress
should reform the small business healthcare tax credit so it is
just as easy for mom and pop workers to get coverage from
employers as it is in Obamacare and Medicaid.
Finally, to lower costs, Congress should end dishonest
billing practices that allow hospitals to charge facility fees
and higher prices for services delivered in physician offices.
These reforms should be bipartisan. When Obamacare passed, its
authors took great pains to argue employer coverage would
remain intact. What we have seen since is a war on employer
coverage.
Congress needs to take steps to end that war. Thank you for
your time. I look forward to answering your questions.
[The Statement of Mr. Joel White follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Good. Thank you, Mr. White. Under Committee Rule
9, we will now question witnesses under the 5-minute rule. I
will wait to ask my questions at the end, and therefore
recognize Mr. Walberg from Ohio for 5 minutes.
Mr. Walberg. I am going to let you do that over, Mr.
Chairman. I appreciate your comedy.
Chairman Good. Oh, Michigan. Of all things to say, Ohio
versus Michigan, sorry to my early morning workout warrior, Mr.
Walberg, from Michigan.
Mr. Walberg. That is a Buckeye mistake.
Chairman Good. We fly over there.
Mr. Walberg. I am glad to see Iowa there. I have got a twin
brother living in Iowa, so. Thank you for allowing me this
opportunity. I would like to thank the Chair and our panel of
witnesses for joining today's important discussion. An
important discussion that has gone on for too long and needs to
come to a solution that I think we are working, and I think we
are talking about that today.
The high cost of healthcare remains a struggle for small
businesses, many of whom are facing lingering hardships from
the pandemic as well as inflation, which is a tax on everyone.
Association health plans are a commonsense solution that
empowers small employers, and their employees when making
health coverage decisions by providing small businesses with
greater bargaining power.
It allows them to offer more quality options for workers at
a better price. That is what we are looking for. The
Association Health Plans Act will expand pathways to more
affordable healthcare for small businesses and entrepreneurs
across the country.
The other bill that I am pleased we are discussing is H.R.
824, the bipartisan Telehealth Benefit Expansion Act, which
continues employer's ability to offer stand-alone telehealth
benefits to their employees, especially part-time and seasonal
employees, who would not otherwise be enrolled it the
employer's medical plan.
Telehealth was a lifeline for millions during the pandemic,
and has the potential to alleviate provider shortages,
especially in mental health and behavior health. The last
Congress I was proud to partner with my friend, the late Jackie
Walorski, as she spearheaded congressional efforts to expand
telehealth.
I am honored to take up this bipartisan bill with
Representatives Bean, Allen, Craig, Estes, and Sherrill, and
hope we can advance this bill in Jackie's memory and for the
benefit of needs out there in the community. Ms. Strouse, large
businesses can offer lower cost plans to their employees
because their size allows it, and they enjoy economics of
scale.
The administrative efficiencies, and the negotiation clout.
In your experience, how would expanding association health
plans for employers level the playing field for small and mid-
size employers, and lower costs?
Ms. Strouse. Yes. Well, I think we can all agree options
are great. The more we can put on the table for employers to
actually be able to access is a good starting point. In the
association plan space, the large employers have the ability to
bill based on the number of lives they have, the risk that they
can spread across that.
When you look at association health plans, this has that
same idea behind it. Once you get into that larger space, you
actually have more access to carriers. You have more access to
plans you have more flexibility with customizing those benefits
for your employees. That is just one big thing for us looking
at how out of pocket maximums have been going just through the
roof.
I mean right now the average out of pocket maximum is
$9,000.00. That is not sustainable. When we look at the
association health plans with specific guardrails, which I
think have been outlined in this bill, it gives those employers
the ability to actually feel like a large employer, but then
each employer is actually looked at within their own risk.
In the situation where maybe you do have an older
population, or you might have some people that have some health
issues, you still have that big, large pool that is helping
that situation. You still have that risk that is being spread
apart, but then those employers are still specifically looked
at on their own, so they could have a rate.
Mr. Walberg. Safety and security, and flexibility.
Ms. Strouse. Absolutely. What we do see in these types of
benefits are more robust benefits, so yes.
Mr. Walberg. Thank you.
Ms. Strouse. Yep.
Mr. Walberg. Mr. White, Ms. Corlette's testimony alleges
that association health plans may offer low so-called teaser
premium rates to cherry pick health employer groups. Does the
Association Health Plans Act allow for teaser premium rates?
Mr. White. It does not. In fact, it sets a rate for the
entire group, and if there was a teaser rate offered, that
would be considered not actuarily sound, which the bill
actually requires, so teaser rates are not authorized by this
bill.
Mr. Walberg. We do not want to tease.
Mr. White. We do not want to tease.
Mr. Walberg. We want the experience to be good and
productive.
Mr. White. That is right.
Mr. Walberg. Let me move over to the telehealth benefits.
Mr. Watts--Ms. Watts, excuse me, Mrs. Watts, what type of
employers currently offer stand-alone telehealth benefits?
Mrs. Watts. I have a couple of examples of our clients that
do this. One is a national convenience store chain, that is
very similar to the restaurant chain that I mentioned. A
private daycare preschool employer, and a K through 12 employer
who need teachers in the classrooms, and they just want to be
able to continue doing business, and providing something that
is valuable, and they have very low take up rate of their
insurance, and so it is super valuable.
Then we have got like a smaller landscaping company. It is
kind of a transient workforce, lower paid, and they just feel
like they needed to do something, and so it was a way to
provide that care.
Mr. Walberg. Better health, better opportunity. My time has
expired. I will submit further questions for the record. Thank
you.
Chairman Good. Thank you, Mr. Walberg from Michigan, and we
will now recognize our Ranking Member, Mr. DeSaulnier, for 5
minutes.
Mr. DeSaulnier. Thank you, Mr. Chairman. Well again, thank
you for having this meeting. As I mentioned in my introductory
comments, I am a former small business owner having owned
restaurants in California, including places like San Francisco
and Berkeley, California, so you could imagine working with my
colleagues, sometimes from my perspective, might have been a
challenge.
I was successful at it. I was also a long-time member of
the NFIB, although I think when I was in the legislature you
might have terminated my membership. I was also a member of the
California Restaurant Association. Ms. Corlette, as a small
business owner, I can see the benefit of banding together for
small business.
I agree with much of the comments. Getting it right, to
make it work for everybody, and human nature being what it is,
a lot of the proposals allow for people to manipulate what
should be a benefit for everybody. Could you comment a little
bit about how we could get association and pooling together,
like people like the California Restaurant Association for
small members to get the benefit that large employers get,
under the ACA.
Ms. Corlette. Thank you, Congressman, and first of all, I
want to say that I think the Chairman and the other witnesses
that I am here with. We are all, I think, equally concerned
about the burden of health care cost for small businesses. They
really are hindering competitiveness and threatening the
financial success of small businesses.
With respect to association health plans, the concern that
I and many have is that they offer lower premium rates to small
groups when they are permitted to adjust rates based on each
small employer's health status or age, and if they do not have
to participate in the Affordable Care Act single risk pool, or
risk adjustment programs.
This means that they can use underwriting practices to skim
off the healthier, small employer groups, and they can offer a
lower rate because they are paying less in health care services
because it is healthier groups, leaving in the ACA market small
employers who have older workforces, or who have workers who
are not as healthy.
This leads to what we call an adverse selection problem in
health insurance, which means that premiums start to go up and
up for those employers who are not as healthy as the ones
attracted to the AHP.
Mr. DeSaulnier. That was the case, but worse before the
ACA, particularly in the restaurant business, because younger
employees, and I was one once, when they first start, many
times when they are still going to school, do not want to pay
for health care. I had young employees who said, why do I have
to pay anything, and you only pay a portion of it?
I prefer just to get a raise, a wage increase. The ACA is
trying to address that, and I would not say it is a finished
product by any stretch of the imagination, so hopefully we can
work on it together. Let us talk about telehealth, first on the
medical side. Now as a survivor of stage four cancer, and a
consumer continuing with an immune system that needs constant
attention, telehealth can be a benefit.
I agree, particularly in rural areas, multiple benefits.
Again, getting it right, and having a rational, less
ideological conversation. As a survivor of cancer, I do not
care what registration or ideology my doctor is, as long as he
keeps me alive.
Here is an example of where I think we could work in good
faith, acknowledging we start at different perspectives. Tell
me about some of the pitfalls as you see it, as you have
already explained in the beginning, particularly about being
transparent, so people understand that telehealth could be a
component in medical health, and maybe you can add a few
comments about on the behavioral health side. Again, where I
could see a great benefit, and have seen personally a great
benefit.
Ms. Corlette. Sure. Absolutely. It is very clear that
employers and employees highly value the delivery of health
care services through telehealth. As I mentioned in my
statement, 96 percent of large employers already offer some
coverage of telehealth, and a vast majority of them think that
the use of telehealth by their employees is likely to increase
over time.
Employers are committed to covering telehealth services,
and they see it as a really important part of their employees'
health benefits. My concern with creating a telehealth benefit
as an ``excepted benefit'' under ERISA is that it carves it out
from the employee health plan, siloing it from major benefits.
It exempts it from all Federal regulations, including
mental health parity, Affordable Care Act protections, and it
leaves people without those protections. We have also seen with
other excepted benefits such as fixed indemnity, that quite
often these benefits are marketed to consumers in deceptive and
misleading ways, leading them to believe that they are getting
comprehensive health insurance, when they are actually getting
a product that does not provide financial protection.
Mr. DeSaulnier. Thank you. My time is up. Mr. Chairman, I
look forward to working with you on these issues because I hope
you can tell from my comments, although I strongly disagree
with many of your perspectives, I think there is an opportunity
here to accomplish some real good for the American public.
Thank you. I yield back.
Chairman Good. Thank you, Ranking Member DeSaulnier, and
now I recognize Chairman Virginia Foxx from North Carolina.
Mrs. Foxx. Thank you, Mr. Chairman. I thank our witnesses
for being here today. Mrs. Watts, most Americans were covered
by employer sponsored insurance are satisfied with their
coverage, yet our Democrat colleagues continue to push the
expansion of government run, one size fits all healthcare
programs. Can you discuss the benefits of employer sponsored
insurance as compared to plans on the Obamacare exchange?
Mrs. Watts. Of course, Chairman Foxx, I would be happy to.
First of all, the benefits that are provided by employer
sponsored plans for the most part are much better than those on
the market. The deductible levels tend to be lower, and the
out-of-pocket maximums are lower. In addition, the
contributions are lower, even with the government subsidies for
many people with employer sponsored health plans.
I think one thing though that we maybe lose sight of is
that the networks that the employers plans use tend to be a
broader network of providers, and so it is not a narrow
network. It gives members more choice of where they can seek
care. One thing that is kind of near and dear to my heart is
innovation. Employers are always looking to spend less and do
more with their benefit packages. I think they really push the
market, and they go after the new up and coming things that are
available.
They are more quick to adopt those things, and they are not
just, you know, caught up in a lot of regulatory barriers.
Then, you know, I will say that employers work hard to offer,
you know, a curated choice. They typically offer three or four
benefit options. You know, there is a lot to choice
architecture, and you can overload somebody with choices, and
it becomes overwhelming, and they cannot decide what plan they
want to be in.
I think the idea of meaningful choice is very important to
employers. The last thing I will say is that we do a survey
worldwide of workers, and when we ask them whether or not they
agree that their employer cares about their health and well-
being, 66 percent of workers globally say that their employer
cares about their health and well-being.
In the U.S. it is 75 percent of workers feel that their
employers care about their health and well-being, and I think
that that's a big part of why employers offer healthcare
benefits.
Mrs. Foxx. That is great news. Your comments mirror my
experience in hearing from constituents. They hate Obamacare,
and the government run programs because they are not flexible.
Mr. White, Ms. Corlette wrote in her testimony that expanding
access to association health plans, and tools that employers
need to self-insure, such as reinsurance, will shift costs to
the individual in fully insured market, and will result in
employers offering worse coverage.
I think we have even heard those comments today. Do you
agree? Why? Or why not?
Mr. White. Yes. I disagree. I think our first goal should
be to expand choices and options for employers, but I think the
assumption is that healthy people will be the ones to switch,
and that Will destabilize both the individual and the large
group market, and we just disagree with that.
In fact, we think that there's a couple reasons for that. I
think AHP's will actually be a richer set of benefits for
people. First, I think the wider provider networks, more access
to doctors and drugs and hospitals. We see a very narrow
network on the ACA.
The second reason is I think AHP's will provide lower
deductibles, and we see very high deductibles in Obamacare.
$4,500.00 is the average in 2021. It is less than twice that in
the small group market, so less cost sharing. That will attract
people who have some claims experience, that have health
conditions, right?
It is not going to be all the healthy people, it would be a
mix of risk.
Mrs. Foxx. Right.
Mr. White. Which means that risk will be pulled together,
rates will be driven down because you have a larger risk pool,
and people will experience lower premiums, but there are no
subsidies in these AHP's or self-funded plans, to attract that
healthy risk.
A lot of that healthy risk will continue to choose
Obamacare, where the subsidies are very, very, very generous.
So that is most of the reasons.
Mrs. Foxx. Thank you very much. Ms. Strouse, do you agree
with Ms. Corlette's statement that ``many small employers are
not sophisticated purchasers of the health benefits, and may
not realize the financial risk and fiduciary duties they take
on when they self-fund their plan.'' Why or why not do you
agree?
Ms. Strouse. Well, I would say probably the majority of
Americans are not sophisticated buyers of their health
insurance, so this is the role of the insurance agent. This is
why having an agent is so important today because we are
looking for options across all lines, and in some cases that is
actually using the marketplace as an option for small employers
and group products.
Mrs. Foxx. Well, let me add to that. I think the left's
attitude toward us as individuals, and to small business is
very negative. They think we are all a bunch of dumb people who
do not know how to make decisions for ourselves, that is why
you need the government to do everything for us.
The Life of Julia shows, you know, government takes care of
everything. I think it is a real slam on small businesses. My
husband and I had a small business. My daughter runs a small
business. Every small businessperson I know is very bright, and
could not stay in business if they were not bright, and had to
figure out how to get things done. I think this kind of
attitude is an attitude that exists among Democrats and the
left, and it really is terribly offensive to me. Thank you very
much.
Chairman Good. Thank you, Chairman Foxx. Now I would like
to recognize Congresswoman Wild from Pennsylvania for 5
minutes.
Ms. Wild. Thank you, very much Mr. Chairman. Let me just
start by saying that it always dismays me the amount of vitriol
and partisanship that we experience when we are even engaging
in discussion and debate about health care in America. It is
really a shame.
I think the one thing we could probably all agree on is
that we are fortunate to have some of the best medical
providers and hospitals in the world right here in the United
States. It would be really nice if we could all come together
behind making sure that every single American can afford these
outstanding providers that they often need, but cannot afford.
One of my major goals in Congress, I will tell you I have
been here since the beginning of 2019. This is my third term.
One of my major goals is to try to find paths for
bipartisanship, bipartisan bills that we could work on that
will advance this cause.
I will be very open to any suggestions that any of the
witnesses might have about that. Before I open it up to that, I
just want to say that one of the things that I am proud of that
we were able to do on a very bipartisan basis in 2020 was to
advance legislation to protect consumers from surprise out-of-
network bills, and ultimately passing the No Surprises Act.
I personally in my family have seen the advantages of that,
and I have talked to many others who have. Ms. Corlette, let me
just start by asking you what your thinking is, what your
knowledge is of how the No Surprises Act has made health care
more affordable for consumers?
Ms. Corlette. Sure. Yes. Thank you for the question. As you
know, the No Surprises Act protects people with insurance in
certain situations when they really have no choice of
providers, so those are emergency situations, and also if they
are getting care at an in-network facility, they have done
their homework, and they have made sure to go to an in-network
hospital, and yet they are treated in some way by an out of
network clinician, that can be an anesthesiologist, or a
radiologist.
Ms. Wild. I am sure there is no person around who has not
received a bill at some point in time, looking at it and saying
I do not know who this doctor is. I do not know when I received
this case, except for the date on the bill, and that is very
frustrating for everybody.
Ms. Corlette. Right. Absolutely. The law went into effect
last year, so we are about a year plus into it, and the good
news is that it is working as intended. 177 million people now
can have peace of mind that if they have an emergency, or if
they are in a hospital that they know is in-network, they are
protected from those surprise medical bills, so good news.
Ms. Wild. The one thing I would note on that is that I
believe, if I am not mistaken, that we still have a lot of
problems in terms of people who require ambulance service, EMS
not being covered in-network, and I have talked to EMS
providers in my own district.
That is an area that I would personally like to see us move
forward in a bipartisan way and try to figure something out. I
would like to open it up, if any of you have any--I wish I had
far more than a minute and a half left because this is a really
important topic, but I would love to hear any ideas that any of
you might have for other initiatives that we might take on a
bipartisan basis. I open it up to any one of you.
Mr. White. I will jump in here. I think that you have
mentioned one. It is expanding out No Surprises to cover
ambulance services, huge out-of-pocket costs for a lot of
people who get surprised, and not covered by the law, right?
That is important. The other thing I would focus on is
telehealth. I mean the telehealth bill that we are discussing
today is bipartisan. There are a number of Democrats and
Republicans on that. I think what we saw during COVID was
telehealth really filled the gap. It allowed people to access
care that they otherwise would not be able to get.
Ms. Wild. Let me just--I am sorry to interrupt, but I will
tell you I am a huge fan of telehealth. I actually sponsored a
bill during COVID to make sure that older Americans had access
to telehealth. I really am a big fan of it. I have a great
concern about stand-alone telehealth plans, and whether they
would be--that people could be misled into thinking they had a
comprehensive health plan, and when they needed a hands-on
doctor, they would not have that ability.
Okay. With 15 seconds left, go ahead.
Ms. Strouse. I just want to bring up the fact that the cost
controls are a big thing too, so the site neutral payments and
facility fees within the hospitals, and buying up all these
small, little independent providers.
Ms. Wild. I actually plan to submit a question for the
record. I knew that I would run out of time on that very issue,
so thank you very much. Thank you all. Thank you for this
important hearing.
Chairman Good. Thank you, Representative Wild. Now we will
go to Congressman Allen from Georgia for 5 minutes.
Mr. Allen. Well, thank you, Mr. Chairman and Ranking
Member. I miss sitting beside you by the way, those were some
good hearings we had back in the day, but it is good to be here
this morning. I come from the business world. I was in
business, still my wife is in business now, I tell people a lot
on a Tahoe and a Member of Congress, but yes, I served because
I was involved in healthcare. I was Chairman of a hospital
board for 9 years.
I was asked to serve on the Healthy Future Task Force. I
will tell you what I learned is this government is driving up
the cost of healthcare because the government is driving
healthcare. Even the private sector has joined forces with the
government.
They are all in it together. You know, and I challenge my
colleagues, you know you talk about anger and vitriol, go to
the emergency room on a Friday or a Saturday night. You know,
get out in your districts, see what's going on. You will see
anger in vitriol like you have never seen it before.
I personally, feel empathetic to those providers that have
to sit there and put up with what these people are throwing at
them, and then they have to take care of them. Unfortunately,
that is where our country is. In fact, what I found in this
process in talking to--we talked to hundreds and hundreds of
professionals, patients, you name it, to try to get to some
solution here.
Nobody is happy in healthcare. Nobody. The patients are not
happy, the providers are not happy, and let me tell you. You
talk to the American Medical Association we are experiencing a
severe shortage in providers. That is not going to be good for
any of us. I ask the question why?
It is because this government is in charge of your
healthcare. We have only a government healthcare system. That
is it. All the privates, all the hospitals, have got onboard,
and are following it right down the road. Like I said, I come
from the business world, and what I would like to ask Mr. White
is this.
Obviously, the only way to bring down costs is competition.
Right now, the only people that have a waiver, and our State
has been trying to get waivers to drive down costs in our State
of Georgia. We have got waivers from the Trump administration,
and they were all taken away under the Biden administration.
We were driving down costs with these waivers. The only
people that get waivers now are unions and the faith-based
communities and thank goodness for the faith-based communities
because they have some programs that are reducing costs for
families of faith.
We have to have a private system in this country to compete
with the government system. That will keep government
accountable and competitive, because right now it is the wild,
wild, west, and we are going to--and it is unsustainable. Mr.
White, what are your recommendations?
Mr. White. I think you highlighted the problem excellently.
I think the fallacy is that people think that we have free
market healthcare in the United States. We do not. We have 93
percent of all health markets that are highly concentrated,
that means they lack competition for services, providers,
doctors, hospitals, et cetera.
In those markets consumers pay much higher prices. One of
the reasons is we have a lack of enforcement from government
bureaucrats and agencies. The other reason is that we really
have done a poor job explaining what free market health
coverage is.
I think you are starting to take some of those steps here
today to talk about competition.
Mr. Allen. Yes.
Mr. White. Letting people band together to get big pools to
negotiate lower rates.
Mr. Allen. Exactly.
Mr. White. Look, Costco and Amazon can negotiate a lower
price because they are really big.
Mr. Allen. You give the business community a waiver? They
will fix healthcare in this country. Quality will go up,
providers will come back because they do not have to deal with
the force of this Federal, and the oppression of this Federal
Government.
Mr. White. Congressman, I am going to say one more thing.
Fifty cents of every dollar spent on healthcare comes from
Washington, DC.
Mr. Allen. Yes.
Mr. White. Every entity in healthcare is regulated at some
level, local, State, Federal, by regulations, and so they are
constrained in what they can do and offer. What we are talking
about today is flexing that upwards a little bit.
Mr. Allen. Yes. I have got to add one thing. I asked the
question to every one of these professionals. Can you break
down the cost of healthcare for me? Peel the onion. That way I
can figure out where the money is going. Not a single one of
them can do it, and with that, Mr. Chairman, I yield back, and
that is the only way we are going to get to the bottom of this
because somebody is on the take here. Thank you.
Chairman Good. Thank you, Congressman Allen. Now we will
recognize Congressman Courtney from Connecticut for 5 minutes.
Mr. Courtney. Well, thank you, Mr. Chairman, and thank you
for the witnesses for being here. I would like to start and
followup with some questions with a basic sort of fact, which
is that really, just months ago, we finally enacted a cap on
insulin for Medicare patients.
Again, this is a drug that is been off patent for over 100
years. I mean any sort of argument that it needed to be priced
two or three times higher than, you know, what people pay in
Europe, or other parts of the world, you know, because we got
to support R&D I mean is, you know, absurd when you talk about
a drug like that.
You know, which again it has been off patent. Again,
starting on January 1, Medicare patients are now paying no more
than $35.00 a month for their insulin refills. I have friends
in my district who say that is one-third of what they were
paying before. When we passed the bill initially in the House,
it actually extended that benefit to you know, working age
individuals in their employer-based plans.
We unfortunately came up, I believe it was about three
votes short in terms of overcoming the 60 vote threshold in the
Senate, and you know, to me you know, that just sort of is
blindingly obvious, that is a way of helping reduce the
overall, not just that specific drug, but also the overall
costs, and frankly we need to look at that deeper.
In Connecticut we just raised, we just had approval of
small group plans, I think there is about 12.9 percent in the
State of Connecticut, Department of Insurance. They identified
prescription drug costs as the No. 1 cost driver in terms of
what is making premiums go up.
Again, it is not because of the fact that we do not give
the government enough authority to negotiate a better price,
like we did with insulin, it is because we do not do enough of
that. Again, you know, I just would ask Ms. Corlette, to just
sort of comment on that. That if we are really serious about
reducing costs, we have got to look at what insurance plans
actually pay for, and try to figure out ways to reduce those
costs.
Ms. Corlette. Thank you, Congressman, for the question.
Yes, the Inflation Reduction Act made great strides in
improving prescription drug affordability for Medicare
enrollees but stopped short of extending that help to people
with employer-based or commercial insurance.
A recent analysis by the Kaiser Family Foundation found
that capping insulin at $35.00 a month for people with private
health insurance would provide financial relief to about 20
percent of employees, and for people who pay currently more
than $35.00 per month for insulin, half of them would save at
least $19.00 a month, and 25 percent would save at least $42.00
a month, so really significant savings.
Mr. Courtney. You know, it is interesting because we are
about to vote I guess this week on this debt ceiling plan,
where huge pieces of the Inflation Reduction Act are being
gutted for energy tax credits. It appears that the majority has
kind of kept hands off the insulin price.
I mean again, I am not sure of that for a fact, but we will
maybe find out more, but I mean to me that speaks volumes about
the fact that it is just an undeniable policy advance in health
care, which is to use the negotiating authority of Medicare,
which is the second largest health plan in our country to
really get, you know, a better deal in terms of what the
taxpayer has to underwrite, as well as what the patient has to
pay.
Again, the bill goes on though. It is not just about
insulin, it also is going to cap out-of-pocket for anyone on
Part D over a time period. I met with MS patients, multiple
sclerosis patients, who are now getting injection treatment
where, despite the fact that they are affluent, even good
insurance, they are just totally hammered by the cost of that,
and most of them end up on Medicaid. They were in tears with
gratitude for the fact that Congress did what we did in the
Inflation Reduction Act, which was putting an overall cap,
again, that will apply to their predicament.
Again, if you could Ms. Corlette, comment on that. We are
talking about a broader universe of savings.
Ms. Corlette. That is right. I think expanding, leveraging
the negotiating power of a large purchaser like Medicare to
deliver savings to employer-based plans for high-cost
prescription drugs will trickle down to savings for workers and
their families. Then the other protections in the IRA,
particularly related to that cap on out-of-pocket would also be
incredibly helpful for a lot of families. Thank you.
Chairman Good. Thank you, Mr. Courtney. Now we will
recognize for 5 minutes, Congressman Banks from Indiana.
Mr. Banks. Thank you, Mr. Chairman. There are nearly a half
a million small businesses in Indiana that employ over 1.2
million Hoosiers. Ms. Strouse, you wrote that 98 percent of
small businesses report that healthcare cost will become
unsustainable in the next 10 years, threatening their ability
to survive and remain competitive.
I wonder if you could just be more specific and explain to
us what are some of those main drivers of those costs that you
are talking about?
Ms. Strouse. Yes. Thank you for that question. I am going
to continue on that pharmacy topic that we just opened up, and
I love the starting point of addressing some of these insulin
prices. When you negotiate on Medicare only, most of the time
those drug manufacturers actually move those prices somewhere
else. It gets moved into the private market, and so that
becomes challenging.
Right now, 25 percent of premiums are driven by your
prescription cost, and caps again sound lovely, but why are we
not going to the drug manufacturers and making sure that those
insulin prices are affordable for everyone across the board? So
those are the conversations that need to be had, and if we do
not address those, then that right there is a huge factor.
Our specialty medications are driving the majority of our
claims that are coming in, and most of those people are seeing
commercials on TV, and they are walking into their provider's
office and asking for those specific medications. I have an
employer right, now that 91 percent of their prescription costs
are driven by ten specialty medications.
It is a huge spend for them. I would say that is first and
foremost, and then the hospitals site neutrality payments. We
love our providers. We have to have them. We live in a very
rural State, and it is super important to make sure that doors
are open. After the ACA rolled out there was a ton of
consolidation, and so we saw a lot of private, individual
practices move into that hospital's system.
Our doctors have lost the ability to care for their
patients the way that they were, went to school, and the
reasons that they went to school. We need to make sure that
everybody is taken care of. That when people are going in to
have a test within the same system that the test costs the
same, regardless if you are in small town Iowa, or if you were
in Des Moines at a hospital system.
Those are two things that I think are driving the costs
that I believe that Congress can actually do something about.
You know, really just more access and options, getting
association health plans out there, having that ability for
employers to make choices for themselves and for their
employees.
Mr. Banks. Your State is a lot like my State, and maybe
expand on that a little bit. Talk about how we got to this
point where small businesses feel like they might not be able
to provide the same level of quality healthcare options for
their employees as what they used to.
I mean it seems like that is devastating to the families
who you have put to work with good paying jobs. It seems that
would be very disruptive to your ability to do business. How
did we get to that point?
Ms. Strouse. Yes. In Iowa specifically, before the ACA
rolled out, we actually had protection across the board for
everyone regardless if they had pre-existing conditions, and
specifically in the employer market. When you came in as a new
eligible employee into an employer group plan, they did not
have pre-existing limitations on those plans. If you were
somebody who chose not to enroll, and a year later decided to
enroll, there could have been limitations based on that, but we
had a high-risk pool in Iowa that accepted everyone that got
denied coverage.
We had safety nets in place to actually make sure every
single Iowan had access to care. In that high-risk pool we had
$500.00 deductibles. Those are unheard of in Iowa today. We
also saw the age rated bands, the age bands come out, and that
created first of all, our older population paid more, but it
did not offset the younger population. Their rates also went up
where it was on average you could have a young, 20 you know,
something.
Their premium could have been $125.00 on average. Those
premiums went up over $300.00. That is why those young, healthy
people did not enroll in those marketplaces. When we start to
get that where everything is just driven by claims, and we do
not have prevention on the front end of things, that is what is
driving up costs, that is what is making it unsustainable for
employers today.
Mr. Banks. Well, I appreciate you sharing your unique
perspective. Small businesses are the backbone of our economy
in states like Indiana and Iowa, and throughout the country,
and it is my sense that Members of Congress should be listening
a lot more to people like you a lot more than what they do, so
thank you. I yield back.
Ms. Strouse. Thank you.
Chairman Good. Thank you, Congressman Banks. Now I would
like to recognize for 5 minutes, Congressman Norcross from New
Jersey.
Mr. Norcross. Thank you. At this point, I would like to
yield 1 minute to my colleague.
Mr. Courtney. Just really quickly. Ms. Strouse, I just want
to reiterate the point that I made, which is when the Inflation
Reduction Act came out of the House, that insulin piece was not
limited to Medicare. It was extended to, we amended ERISA, to
make sure that it would be extended to employer-based plans as
well.
Unfortunately, Senator McConnell whipped a no vote on that,
and that provision was stripped because it was ruled by the
Parliamentarian not to be budget related. It was a policy
issue.
The good news is that Susan Collins and Patty Murray are,
on a bipartisan basis, going to be introducing a bill to do
exactly what you just described, and which we supported
already, and hopefully we can all have a nice bipartisan
kumbaya, and come together and realize that those savings for
insulin should be extended to working age Americans through
their employer-based plans. I will now yield back to Mr.
Norcross.
Mr. Norcross. Thank you. I appreciate it. I see the actual
hearing notes says Reducing Health Care Costs for Working
Americans and their Family. We can do that very easily by just
cutting coverage. Obviously, any health care has to be
comprehensive coverage and quality coverage.
Coming out of the pandemic we have seen just the massive
impact that COVID has had on the average American, both
physical and mental health. The question I want to get to is
the mental health piece of this. Last year, the Department of
Labor did a study to find widespread violations of the Mental
Health Parity and Addiction Equality Act.
In the report, the Department recommends Congress provide
additional tools to improve enforcement, including granting the
Department of Labor the authority to issue civil monetary
penalties for violation. Next month, I plan on reintroducing
the Parity Enforcement Act.
When we look at what is in place now, the law says one
thing, but without any meaningful employment, it is literally
like having no police on the road and people will just drive
whatever they want to do. Certainly, we have seen what happens
when that doesn't work. The violations come flying in.
Ms. Corlette, what are some of the barriers to making the
promise of the Parity Act an actual reality, and how could we
improve the enforcement in making sure that this care is
available to all Americans?
Ms. Corlette. Thank you, Congressman. As you said,
enforcement of MHPAEA is absolutely critical. You know, when
the Department of Labor recently asked group plans and insurers
to share their analyses of how they were covering behavioral
versus medical health services, not a single plan was able to
submit documentation to enable Department of Labor to even
assess what they were doing.
It is a clear sign that plans and issuers may not be taking
their compliance obligations seriously enough. MHPAEA was
enacted in 2008. We are 15 years into this. Civil monetary
penalties certainly could help send a strong message that
access to mental health services is really vital for workers
and families. I think it could also be helpful for the
Department of Labor to provide some guidance, and more clarity
to plans and issuers about what those obligations are.
Knowing that there is a cop on the street is absolutely
critical.
Mr. Norcross. Again, right now if there is violation, if
they get caught, they just pay for it. Obviously, from the
bottom line financially, we tried to allow the market, the free
market, to go and take care of this. Again, your point, 15
years. It is not being done. I think this is incredibly
important. I think everybody on this panel, both sides of the
aisle understand mental health is a real issue.
The addictions, the list goes on. The idea that we are
allowing part of the free market to just go and do what they
want, and we see the violations is exactly why I think we
should talk about implementing this, and moving this forward.
With that, Chairman, I yield back.
Chairman Good. Thank you, Mr. Norcross. Now I would like to
recognize Representative Smucker from Pennsylvania for 5
minutes.
Mr. Smucker. Thank you, Mr. Chairman. This is a great
discussion this morning. I would like to thank the Chairman for
scheduling this hearing, thank the witnesses for being here. I
would like to thank the Ranking Member, and other members from
the other side of the aisle for some of the comments that they
have made in regards to the common ground that we have on these
issues.
I think we are all interested in ensuring that every
American can access the great healthcare system that we have
here. We have differences about how we can best deliver that,
but we have great discussions here today about potential
solutions. I will use the term that the Democrats are often
fond of, universal healthcare.
I would like to see universal healthcare. To me, that means
that everyone can manage their healthcare expenses by having
access to insurance if they want that access to insurance, and
hopefully at a price that they can afford. We believe it can
best be done by competition among providers, competition among
hospitals, competition among insurers.
We think a system with that in place will deliver the best
change of ensuring that access. I read about a 200 employee
construction company, self-insured, and you have all talked
about the benefits of self-insured, some of the problems with
the red tape around that, the flexibility that it can provide,
and so I just want to mention the benefit that I saw of also
creating partnerships between employers and employees to
improve healthcare, or improve health of employees, and reduce
costs.
It was a shared risk in that, and then I have seen
telehealth in my district. I have heard some of the concerns
about telehealth, and I do not--it is the first I heard some of
them because I have always seen telehealth as being sort of
better access to healthcare. Part of a larger system, and
literally helped to improve outcomes because patients tended to
go to a doctor sooner, and maybe take care of a health problem
before it became larger.
I have also seen, and I want to ask this question, and
maybe Mr. White, I will ask you. We have some very innovative
systems by employers in my area where telehealth is part of it,
but also direct primary care. This is where there is a sort of
a monthly fee to a doctor, that is then on call for employees.
Even groups of employers are doing this at times.
People love it because they can call, rather than missing
work having to go the distance. They can do telehealth and then
sometimes the direct care provider will even be onsite if it is
a large enough company. I have a bill that would help to--I did
this, introduced it with Mr. Blumenauer, a Democrat from
Oregon.
Essentially, it would ensure that employers who have access
to direct primary care would also have access to HSA's, and it
would be covered in HSA. Mr. White, are you familiar with that?
Do you like it? If so, how could we expand direct primary care?
Mr. White. It is a great idea. I love it. I think it
expands options for workers to be able to access care on
demand. It is kind of like the old concept when the doctor
would come to your home, right, and you would kind of----
Mr. Smucker. Like a family doctor.
Mr. White. A family doctor. You would get their attention,
and their time, and that is what direct primary care seeks to
offer is that direct attention, that direct time, dedicated to
that worker so that they have access, good access, to care. I
think coupling it with HSA's makes a lot of sense, so that
people can pay any of their cost-sharing obligations.
Then on the telehealth side, I think you know, one of the
things that we have seen during the pandemic is really a focus
on behavioral and mental health issues.
Mr. Smucker. Absolutely.
Mr. White. Really, 90 percent of those claims on
telehealth.
Mr. Smucker. I want to get to one additional question, and
I am really sorry to cut you off. Ms. Strouse, you had
mentioned site neutrality payments, and I have heard from this
on sort of both sides of the issue if you will, independent
practices, who literally have gone out of business because they
have been bought up by hospitals that they could charge higher
prices. It is a system that we have in place that I think
encourages that kind of consolidation, which I think then
reduces competition.
On the other hand, I have great hospitals in my area who
argue that they face unique circumstances that justify the
increased price of services, and I would just like you to
address that. Like how do you talk about that? How do you
respond to hospitals that you are arguing that these higher
prices are justified?
Ms. Strouse. Yes. I am not--I am definitely not arguing
that they are not seeing increased prices. Everyone in the
country is experiencing increased prices across the board. I
think what we want to get to is an easier, more transparent
system so that if you are having a lab test in one clinic, and
the same exact lab test maybe at a different facility, that it
should be the same price.
We had a member that came forward in Indiana, and they--he
and his wife both had exactly the same lab test. One had it at
a clinic, one had it more through a hospital setting. His was
$900.00, hers was $90.00. We need to make sure that we know
that the price is the price. That type of thing should not be
different.
Where we are also seeing some challenges are those facility
fees. In some of those smaller clinics, now we are starting to
see a facility fee be added on top of services that really
there should not be a facility fee charged on. We recognize our
hospitals are also struggling. We are doing everything we can
in the State of Iowa to make sure that all of our rural
hospitals are getting what they need.
Another piece of that is Medicaid, and the Medicare market.
The reimbursements are not great, and so the private market
literally holds them up. I have actually had a client who is a
mental health provider, and she was contemplating lowering the
amount of patients she was seeing in Medicare and Medicaid,
just to keep their doors open, and it was a heart wrenching
situation for her.
Reimbursements across the board, we need to get that
figured out, so that it is there for everybody.
Mr. Smucker. Thank you. Thank you, Mr. Chairman.
Chairman Good. Thank you, Congressman Smucker. Now I would
like to recognize Representative Hayes from Connecticut for 5
minutes.
Mrs. Hayes. Thank you very much. The Affordable Care Act
dramatically expanded the affordability of health care for
millions of Americans. As of January 2023, a record 16.3
million people were insured under the ACA. Additionally, last
Congress, Democrats took bold action to reduce prescription
costs by passing the Inflation Reduction Act, which grants the
HHS Secretary the authority to negotiate the price of
prescription drugs covered by Medicare, and caps out-of-pocket
costs for insulin at $35.00 per month for Medicare
beneficiaries.
I have to stress once again that we tried to expand this
beyond Medicare, and we were stopped by Republicans. I was
particularly disappointed that we would not be covering
children with Type 1 diabetes, so it is something that we will
continue to work toward.
While we have accomplished so much, there are still changes
that must be made to make our health care system better.
Currently, most insurance covers individuals from the neck
down. Dental and vision health, which are critical components
of overall health, are not covered.
Basic insurance health plans rarely cover routine eye
exams, regular visits to the dentist, or even extended mental
health services. People without access to dental care are more
likely to suffer from chronic conditions, such as heart
disease, diabetes, and cancer.
In 2023, there have already been 55,000 new cases of oral
cavity cancers in the United States. Similarly, improving
access to eye care allows health professionals to identify and
treat problems before they become more serious. Vision
screenings improve academic outcomes for kids.
If we are having a conversation about reducing health care
costs, it should also be about full and total health care. Ms.
Corlette, how did the ACA improve dental and vision access,
especially for children? Can you elaborate on the remaining
barriers to affordable dental and vision care that we are
currently facing?
Ms. Corlette. Thank you Congresswoman, for the question.
Sure. One of the key things that the Affordable Care Act did
was establish a set of minimum essential health benefits, which
included pediatric dental and vision care. For the first time,
there was a minimum floor that all small group and individual
market health plans had to satisfy.
In terms of remaining barriers, I would say No. 1, there
are ten states that have still not expanded Medicaid under the
Affordable Care Act, and that places about 1.9 million people
in something called the Medicaid Gap. They are too poor for
marketplace subsidies but have too high of an income to qualify
for their state's very, very, low eligibility.
The second thing I would point out is that in the employer
market, dental and vision are sort of the traditional examples
of excepted benefits. What has happened with these excepted
benefits, is they end up being siloed, they are separated from
the general comprehensive major medical benefit that we all
have. Not only are they siloed out from the rest of your body,
which is not logical, the benefits do not tend to be very good.
They do not provide a lot of financial protection. The
medical loss ratios are quite low. I just point that out in
part because before you today is this proposal to create
telehealth as an excepted benefit, which I worry would lead you
down the same path where the services are siloed from your
regular health care and are not very comprehensive.
Mrs. Hayes. Thank you. To your point, I would argue that we
need to make sure that it is more competitive, so that people
cannot charge whatever they want to your point, $90.00 or
$900.00 for the same benefits. In my State of Connecticut,
531,000 adults have a mental health condition, and many go
without the necessary care or services to address their
illness.
Unfortunately, this reality is felt nationwide, as half of
adults with mental health do not receive treatment. We are
facing a crisis. Ms. Corlette, how can Congress expand access
to mental health care services to those who are in need under
the ACA and job-based plans?
Ms. Corlette. Well, one thing your colleague mentioned
earlier was enforcement. That is an area where there clearly
needs to be more authority and more resources for ensuring that
plans are complying with mental health parity. Then just the
last remaining seconds, I think workforce issues are really
critical, and my colleague here mentioned the reimbursement
issues in particular, and making sure that there's
reimbursement parity for those mental health services.
Mrs. Hayes. Thank you. Mr. Chair, I yield back.
Chairman Good. Thank you, Representative Hayes, and now I
would like to recognize for 5 minutes, Congressman Burlison
from Missouri.
Mr. Burlison. Thank you, Mr. Chairman. I worked in
healthcare IT for 20 years, and I have seen where the bodies
are buried. I have seen good, the bad, and the ugly, but I came
to this conclusion that the more that this place touches
healthcare the worse it gets.
Some of my questions, and my thoughts are the only thing
that is going to save the healthcare system is innovation and
disruptive innovation, so I am going to gear my questions in
that regard. I think telehealth is old technology, but at least
it is here, and at least we have that.
Mrs. Watts, can you talk about the impact of the pandemic
and how that has, you know, ushered in more telehealth finally
gotten some level of adoption that really was resisted for
quite some time?
Mrs. Watts. The great thing about telehealth during the
pandemic was that people that had never tried it before and
tried it, when we surveyed and said, you know, will you do this
again, they said yes. Resoundingly, they said yes. I think it
was a great way to try it out.
I also think it did a huge service to healthcare providers
in this country because it kept people out of the doctors'
offices and going to the hospitals, and it was a way to triage.
It was really kind of a God send that we even had that as a
resource for people to access, to determine whether or not
their symptoms were related to the pandemic, to COVID, or
something else.
Mr. Burlison. In addition, it gives access to patients who
might be in a rural healthcare setting to have very difficult
times getting an appointment with a psychiatrist, or some of
these specialists, so that is a huge added benefit as well. Can
you elaborate, or give us an idea what is holding this back?
What kind of structural issues are throwing water on this
innovation?
Mrs. Watts. I think virtual healthcare, digital healthcare,
are all very fast-growing segments of the market. Part of that
is driven by the fact that there is a shortage of providers,
and people are not able to get an appointment, and so access to
virtual digital care definitely helps.
The other thing that is so important related to behavioral
health is that it has really helped us address a health equity
issue with access to behavioral health in seeing low income and
minorities be able to access care that they really didn't have
access to before.
Mr. Burlison. Let me ask this, and this may be a question
for Mr. White. Do we have an issue with, you know, State after
State they implement licensing laws, a lot of it is turf
issues. Do we have, as a Nation, as we approach this increased
demand for professionals, and people to get access to care,
whether virtually or in person, what is the impact of these
restrictive licensing laws where they stop potentially mid-
level providers from practicing to the fullest extent of their
education?
Mr. White. Yes. Great question, and maybe to answer your
last question, I think what we saw during COVID was the public
health emergency was declared, and the government flexed up all
the rules, and what did we see? We saw innovation come into the
marketplace, right?
We deployed an empowered pharmacist to deliver care to
patients, to fill gaps in access, which is really critically an
important strategy. 250 million vaccinations through the
pharmacy channel as a result of some of those policies.
Also, tests. Being able to deploy prescriptions for people
who were sick, et cetera. We saw telehealth, which was a
massive gap filler, once those rules came off. Care at home. We
do a lot of care in very expensive settings, that we could
actually deliver in the home now based on new technologies.
Mr. Burlison. Yes.
Mr. White. Strategies. With the licensure issues, I think
what we have seen is we essentially have a really, maybe a 15th
Century guild system.
Mr. Burlison. A cartel.
Mr. White. Blacksmiths and you know, and not to denigrate
medical professionals, they work hard and get licensed, and do
their things, but what I think we realized during COVID was you
can deploy these mid-level, or more junior level medical
professionals.
Mr. Burlison. Right. My time is getting close, so I want to
go through quickly into this. I think, it is my opinion that
you know, AI is going to radically change healthcare to the
point where it empowers someone who is a mid-level to be more
of an expert in diagnosing more accurate, provide better
healthcare standards, the best medical professionals we have
today. Could you elaborate?
Mr. White. We will lower costs. I was in Iowa last year
where you have got ophthalmology techs using AI to detect
diabetic retinopathy and screen out the people who need the
surgery.
Mr. Burlison. They are just techs.
Mr. White. Yes. They are just techs, right? We have a
massive shortage of diabetic techs in this country. You plug
the machine in, you run them through the tech, and they get the
people who really are going to need more hands-on care from the
physician. It works beautifully, it lowers costs, and it gets
people the access they need.
Mr. Burlison. Thank you.
Chairman Good. Thank you, Mr. Burlison. Now I would like to
recognize Representative Jayapal from Washington for 5 minutes.
Ms. Jayapal. Thank you, Mr. Chairman. For decades,
Democrats have proposed and enacted many policies to lower
health care costs, which included the passage of the Affordable
Care Act. We protected those with pre-existing conditions. We
lowered out-of-pocket costs. I have also pushed for policies
that expand Medicare, ensure homecare for our most vulnerable,
and eliminate the many fees and copays charged by private
insurance companies.
In contrast, Republicans have fought to repeal the savings
from the ACA, and they continue to propose policies that
actually increase health care costs for people across the
country. Ms. Corlette, I am going to ask you just a series of
questions about Republican policy proposals. You can just
answer with a short yes or no on whether these policy proposals
would increase health care costs for Americans.
The first one is the Republican proposal to take Medicaid
away from up to 10 million people by instituting onerous and
unnecessary work requirements as Speaker McCarthy proposed in
his debt limit bill last week. Would that decrease health care
costs for Americans?
Ms. Corlette. No.
Ms. Jayapal. What about repealing the prescription drug
provisions in the Inflation Reduction Act, including repealing
the cap on out-of-pocket prescription expenses for Medicare.
Would that reduce health care costs for Americans?
Ms. Corlette. No ma'am.
Ms. Jayapal. How about cutting funding for the Children's
Health Insurance Program by billions as proposed by President
Trump. Would that reduce health care costs for Americans?
Ms. Corlette. No ma'am.
Ms. Jayapal. What about encouraging the formation of
association health plans, also called junk health plans, with
no additional regulation. Would that reduce costs for average
Americans.
Ms. Corlette. No.
Ms. Jayapal. Let us do the same thing with the policies the
Democrats have proposed, and you tell me if these would reduce
health care costs for Americans. Capping the out-of-pocket
costs for insulin at $35.00 per month for Medicare
beneficiaries. Would that reduce costs?
Ms. Corlette. Yes.
Ms. Jayapal. How about capping out-of-pocket spending on
prescription drugs at $2,000.00 per year for Medicare
beneficiaries?
Ms. Corlette. Yes.
Ms. Jayapal. How about extending enhanced ACA premium tax
credits, which saved my constituents an average of $1,200.00
per year. Would that reduce--has that reduced costs for
Americans across the country?
Ms. Corlette. Yes.
Ms. Jayapal. Finally, I just want to ask you the same thing
about policies that are proposed by Democrats, that Republicans
have blocked. All those ones I mentioned were things that we
already passed. These are things that have been blocked by
Republicans, and you tell me if these would decrease health
care costs for people. Extending the cap on insulin costs at
$35.00 per month to all types of insurance. It was blocked on
the Senate floor by Republicans. Would that have decreased
costs for the American people?
Ms. Corlette. For diabetics, absolutely it would decrease
costs.
Ms. Jayapal. How about closing the Medicaid gap to cover
over two million people in the ten states that have not
expanded Medicaid under the ACA. Would that reduce costs for
people in those states?
Ms. Corlette. Absolutely. Yes.
Ms. Jayapal. I think I wanted to ask you those questions
because I want to be clear about the stark contrast in how our
two sides are approaching health care, which should be a
universal and bipartisan effort to reduce costs for our
constituents, but I think that this hearing makes it crystal
clear that the Republican health care policy proposals are
actually increasing costs for people.
Democrats have taken historic steps to decrease health care
costs for Americans, we have allowed Medicare to negotiate with
greedy pharmaceutical companies. We have capped the cost of
insulin and other prescription drugs for people on Medicare,
and provided support to families struggling with the high cost
of health insurance premiums.
We did all of that without a single Republican vote, and we
have more to do. I have great proposals to address some of the
issues that Ms. Hayes raised around expanding Medicare to cover
dental, vision, and hearing, providing all kinds of care that
people need.
If our health care system can function, so that we keep
people healthy, and we do not put barriers in their way to
seeking health care, and particularly the equity concerns that
we see in our health care system with people not being able to
access care, particularly Black, brown, indigenous folks,
particularly poor people, particularly people in rural areas,
this country would be much better off.
I thank you, and I yield back.
Ms. Corlette. Thank you.
Chairman Good. Thank you, Representative Jayapal. Now we
would like to--we are going to go continue with the minority
party since we do not have anyone here from the majority. We
will recognize now, Representative McBath from Georgia for 5
minutes.
Mrs. McBath. Thank you so much, Chairman Good, Ranking
Member DeSaulnier, for hosting today's hearing, and to our
guests for taking the time to be with us today. I am a two-time
breast cancer survivor, and the daughter of two health care
professionals, so this issue today is very, very personal to
me.
It is personal to me like it is personal for the mothers
and children who live in the 50 plus counties in Georgia who do
not have a pediatrician, or even an OBGYN. It is personal to me
like it is for those in my State who are forced to take unpaid
time off from work, that they cannot force--that they cannot
simply afford. They are driving hours away to get themselves or
their children the care that they need.
While our Governor, in the State of Georgia, knowingly
leaves billions of dollars, Federal dollars on the table, and
refuses to expand Medicaid. There is no justifiable reason why
in the greatest country in the world that medical bills are the
No. 1 cause of personal bankruptcy. There is no reason why the
zip code or the country that you were born into should add or
subtract another 10 years from your life expectancy, but that
is the reality in America every single day.
Republicans love to talk about the high cost of health care
after the passage of the ACA. They fail to recognize exactly
how much higher these costs would be for working families
without these critical protections and these critical programs.
Thanks to President Biden, congressional Democrats, and the
Inflation Reduction Act, the number of Americans without health
insurance is down to the lowest level in the history of this
country.
Thanks to the IRA, Medicare is finally able to negotiate
with drug companies on behalf of American seniors and ensure
that they aren't paying more for, than they need to, for
prescriptions like insulin, and yes, that was my law, the
reducing the cost of insulin to $35.00 out of pocket.
These protections would have gone even further to support
working families by capping the price of insulin at $35.00 a
month for private insurance as well as Medicare, but
Republicans successfully stripped this provision from my bill,
the final version of the IRA that was actually signed into law.
When insulin for human consumption was first discovered and
synthesized by Dr. Banting, and his team. It was in the 20th
Century. They sold the patent to the University of Toronto for
one dollar, just one dollar, claiming that and I quote,
``insulin does not belong to us, it belongs to the world.''
I think that it is obvious that Dr. Banting and his team
would be deeply disturbed by the exorbitant price that insulin
is regularly sold in the United States today. It is up to
Congress to right this historic wrong. Despite production costs
between $2.00 and $4.00 per vial, one in four Americans who
rely on insulin every single day of their lives, has had to
risk getting seriously ill, and cut back or skip their dosages
all together because of the price of insulin.
Because of the IRA, out-of-pocket costs where people on
Medicare are now capped at $35.00 a month, and many states have
taken similar action, as well as the drug manufacturers, three
major drug manufacturers. Congress has to do more to ensure
that everyone who needs insulin can afford it, not just those
on Medicare.
I am very proud to be a co-leader of the Affordable Insulin
Act now, which would extend the $35.00 cap to people with
private health coverage. Ms. Corlette, why is it necessary that
Congress pass additional legislation such as this, to help cut
the cost of insulin? Particularly for people with ERISA covered
plans.
Ms. Corlette. Thank you for the question. The Inflation
Reduction Act took tremendous strides to improve the
affordability for insulin and for many drugs for Medicare
beneficiaries, but it left, as you said, unfinished business.
Addressing the costs of insulin and other prescription drugs
for people in commercial or ESI insurance is critical.
As I mentioned, there was a really helpful KFF study that
found that a $35.00 per month cap on prescription drug cost
sharing would provide financial relief to about 20 percent of
the 160 million people who are now covered in ESI, so it is
really a tremendous benefit.
Mrs. McBath. Thank you so much, and I yield.
Chairman Good. Thank you very much, and now we will
recognize Congressman Omar from Minnesota for 5 minutes.
Ms. Omar. Thank you. It is pretty clear from the
conversation that Representative McBath was just having, and
Representative Jayapal, that Democrats have spent a significant
amount of time thinking about and working on policies that
reduce health care costs for Americans because our constituents
are deeply worried about this.
Ms. Corlette, in your written testimony you referenced 2022
CBO that recommended three policy interventions on how to
constrain health care costs. Regulating health care prices,
reducing consolidation, and untied competitive behavior, and
improving price transparency. You also pointed to the
Bipartisan Policy Center report that made recommendations that
furthered seven interventions, such as capping hospital prices
in highly concentrated markets.
There are a lot of proposals that are out there, and
interventions that are available to us. Can you speak to the
importance of these policy interventions, and how they compare
to the proposals that are currently in front of this committee,
that my Republican colleagues are putting forth.
If there are differences in the approaches, and if there is
a cost shift that will take place for Americans.
Ms. Corlette. Yes. Thank you for the question. The No. 1
reason why we are in an affordability crisis in private health
insurance is the prices that commercial health plans are paying
for health care goods and services. Particularly, hospital
services and prescription drugs.
One of the reasons for that is consolidation. A lack of
competition, particularly in the hospital sector. The
Congressional Budget Office has looked at this issue, and they
have identified three major policy areas that could help reduce
costs for commercially insured people, and they looked at
directly or indirectly regulating prices, hospital prices, and
that will have the most impact on affordability.
Reducing anti-competitive behavior like clauses and
provider payer contracts that restrict competition, that could
also have an impact, as well as price transparency. Those will
get at the underlying drivers of health care cost growth in
this country.
Policies that simply move the deck chairs around on the
Titanic, and lower prices for groups that have healthier
workers, or younger workers, will simply just create new
winners and losers. With the losers being employers that have
workforces that are not quite as healthy, or older than their
peers.
Ms. Omar. Through this hearing, our Republican colleagues
have been calling for the expansion of so-called associated
health plans, claiming this policy change that can make--that
will make health care more affordable. In your written
testimony, you pointed out that some AHP sponsors claimed to
achieve lower premiums because they somehow exercise market
clout.
Can you tell us what evidence is there that they are
actually negotiating lowering prices with health care
providers, and if that is not how they are saving money, how is
it exactly that they are able to lower prices?
Ms. Corlette. Sure. First of all, there is nothing
preventing small employers, large employers, from banding
together to form purchasing coalitions. There are examples of
that in states that have been very effective. The way AHPs
lower premiums are by attracting healthier employer groups, and
using what is called claims experience rating. They look at the
claims of each individual employer group to set the premium
rate.
If you have got a healthier group, you get a lower premium.
That really does not do anything to address the underlying
driver of why health care is so expensive, which my colleague,
Ms. Strouse articulated so well, which is prescription drug
prices and hospital costs. Thank you.
Ms. Omar. Thank you so much, and thank you all for being
here and for your testimony. I do hope that we do get the
opportunity to actually look at some of these bipartisan
interventions, and some of the policies that are proposed by
CPO to actually address the rise of health care costs, and so
many people that are in desperate need of relief in our
country, so thank you. I yield back.
Chairman Good. Thank you, Representative Omar. Now I would
like to recognize my friend and fellow Virginian, Ranking
Member Scott for 5 minutes.
Mr. Scott. Thank you. Thank you, Mr. Chairman. I appreciate
you calling this hearing. I would like to ask Ms. Corlette a
couple of questions. First one, we have heard a lot about
businesses. One thing we did in the Inflation Adjustment Act
was to--previously, was to eliminate the so-called cliff on
premiums under the Affordable Care Act.
Can you explain how that would help a small business?
Ms. Corlette. By cliff, do you mean for people over 400
percent of--sure. Absolutely. The Inflation Reduction Act says
for people who are essentially middle class, about four times
the Federal poverty level. They will not have to pay more than
8.5 percent of their income toward premiums in the marketplace.
For small employers or individuals or self-employed
individuals who have income at that level, their premium
contributions are capped at 8.5 percent, which is financial
relief for a significant number of----
Mr. Scott. Yes, if they were just over the 400 percent of
poverty, which is a little over for a family of four, a little
over $100,000.00, what could a policy cost without any
subsidies?
Ms. Corlette. Without any subsidies? In the individual
market for a family of four without any subsidies, I think you
could be anywhere close to, $20,000.00 a year.
Mr. Scott. $20,000.00 and just over the limit, and the
limit is 8 and a half percent of poverty, it goes from
$20,000.00 to eight and a half. That would be particularly
helpful to individuals in business for themselves, particularly
helpful to families and small business.
Back to the AHPs. You have talked about the fact that the
premium is set at something actuarily sound for that group,
which means if the group comes in and they evaluate it, and
they get a price which is higher than average, what happens?
Nobody will buy the policy if it is higher than average.
If it is lower than average, then they might benefit. Is
that what you mean by cherry pick?
Ms. Corlette. Correct. If you have an employee group that
is healthier than the average group in the fully insured
market, you are likely to find a lower rate within the AHP.
Mr. Scott. When they come out of the general pool what
happens to the average cost in the general pool?
Ms. Corlette. Sure. Actually, there is an actuarily
analysis that was done of the Trump administration rules, and
they found that on average the folks that would come into the
AHP market would be about 54 percent healthier, meaning less
morbidity in the AHP market, than in the fully regulated and
ACA regulated market, and that would increase prices by about
4.4 percent for plans in the ACA regulated market.
Mr. Scott. If you do not get in one of these plans, and you
allow people, healthy people to pull out, everybody else's
premium goes up?
Ms. Corlette. Right. What happens is what we call an
adverse selection dynamic, where healthier groups go into the
AHPs and groups that have older or sicker workers are left in
the ACA regulated market, and over time their premiums will
climb every year.
Mr. Scott. What happens to an AHP if suddenly somebody gets
sick and the rates go up, and they charge, start charging more
than average. Are the people in the AHP required to stay there
and pay those higher prices, or can they jump back into the
pool and pay the average prices?
Ms. Corlette. Sure. In the AHP, they can look at the claims
experience of each individual small employer group. If you have
a group that is generating more costs, their prices will go up
because it is underwritten, and they may choose to go back into
the ACA regulated market, which of course, if they have high
claims costs will increase the morbidity in that market.
Mr. Scott. While everybody else left behind pays higher
prices when people pull out, they are essentially providing
back-up insurance, so when things go wrong, and prices go up,
they can jump back into the pool when the prices go up. Is that
right?
Ms. Corlette. That is a very fair characterization.
Mr. Scott. There is a thing called cost shifting, and the
fact that because of Obamacare and the Medicaid expansion we
are at the lowest uninsured rate in history, what does that do
to everybody else's insurance costs?
Ms. Corlette. Well, we know before the Affordable Care Act
that providers had a lot more of what we call uncompensated
care costs, and they were essentially shifting those costs onto
the insured population at a cost of about $700.00 per family
per year.
The Affordable Care Act, by dramatically decreasing the
uninsured rate has reduced providers uncompensated care costs,
and the amount that they shift onto the insured population.
Mr. Scott. Thank you. Mr. Chairman, I ask unanimous consent
that I enter two documents into the record. One is a letter
signed by 25 patient and consumer organizations, expressing
concerns about associated health plans and created and excepted
benefit exemption for telehealth plans, telehealth only plans.
The second is a statement from Families U.S.A. that, among
other things, concludes that and I quote, ``Proposals to expand
the use of health plans that are exempt from State and local
regulations, do not address the fundamental causes of our
health care affordability crisis.''
Chairman Good. Without objection.
[The information of Mr. Scott follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Scott. Thank you. I yield back.
Chairman Good. Thank you, Congressman Scott. Without any
further witnesses, or excuse me, members other than myself, I
am going to go ahead and ask a few additional questions. Again,
thank you to all of our witnesses for being here. One comment I
will add as a Member of Congress, a lot of people do not know
that Members of Congress are forced onto Obamacare.
I guess we, I use that term loosely, we deserve to suffer
under that which we have placed the American people. I have the
highest healthcare premiums I have ever had, far and away, it's
$1,300.00 a month for just my wife and I. We are a healthy 50-
some year old.
We are experiencing first-hand for the first time the peril
of Obamacare, the lack of choice competition, transparency,
accountability that plagues our healthcare system, that
contributes to these higher rates, not to mention the fact the
country is going bankrupt, and we cannot afford what we are
doing from a government provision standpoint.
Mr. White, I want to ask a quick question of you. One of
our members asked Ms. Corlette if the price cap on insulin was
causing premiums to go down, and she gave a very specific
answer and said for diabetics. Is the price cap on insulin
causing the premium to go to down for everyone?
Mr. White. No. CVUS made it that premiums would increase,
and fewer options would be available.
Chairman Good. Yes, I thought so. Thank you very much. Ms.
Watts, why is competition a good thing in the healthcare
marketplace?
Mrs. Watts. Competition is good everywhere, but with the
lack of competition we see things happening like we have
described already today with the unfair billing practices where
you know, providers can charge what they want to for services.
The savings that consumers could benefit from site neutral
payment reform from focusing on more transparency with billing
are enormous, depending on whose estimates you look at it,
hundreds of millions of dollars.
Chairman Good. We are talking about the debt ceiling here.
Negotiation, someone mentioned earlier, government is bankrupt,
32 trillion national debt, running deficits every year, record
levels. Who ultimately bears the cost if the government is
paying out more in healthcare payments?
Mrs. Watts. We do.
Chairman Good. Yes. Absolutely. The consumer does. How
about at the astronomical billing by hospitals. How does that
affect care for patients?
Mrs. Watts. Well, there are two things. First of all, when
the cost of care goes up, some people will forego care, and
that actually is more detrimental and more costly in the long
run. There are many studies that have proven that. Second, we
are all very familiar now the actuarial value of the plan. It
is basically what the plan pays, and the consumer pays the
remainder.
The higher the cost is, that actuarial value is the same,
it is just that what we are all paying goes up.
Chairman Good. What is this legal price gouging impact on
doctors do you think? The hospital cost, the dishonest billing
that's going on?
Mrs. Watts. I am not exactly sure, but I thought it was
interesting in the prior questioning about the uncompensated
care. I do not recall seeing trend go down as a result of the
drop in uncompensated care, so I am not really sure where all
the money goes.
Chairman Good. Ms. Strouse, thank you, Mrs. Watts. Ms.
Strouse, I thought it was interesting when it was said earlier
that consumers might not understand they were getting just a
telehealth stand-alone policy. I do not know how anyone would
not understand that and would be fooled by that.
My colleagues on the other side of the aisle seem to think
that if a plan does not cover exactly what the Federal
Government says it should cover, then it is a junk plan. Given
your professional expertise, what sort of value do employees
get when employers have more flexibility in the coverage they
can offer? What is the value to employees?
Ms. Strouse. Yes. Well, employers are always coming to the
table to try and find solutions for their employees. Even if a
part-time employee does not have access to healthcare, rolling
out a telehealth plan is something. Otherwise, they would have
nothing. When we look at these, the telehealth specifically,
most of the plans that people are accessing right now are
actually in part of their health insurance policies, and so
they do have great coverage through those. They are not for
everyone.
There is going to be situations where you need to actually
go in and see your provider, but those telehealth services
helped significantly in Iowa around the mental health space,
and so again, agents are extremely important. We are not only
working with employers, we are actually working with the
employees on a daily basis to make sure that when policies are
rolled out like this, or plans are rolled out, that it is
communicated, and they fully understand what they have.
Chairman Good. Thank you very much. You know, I think my
friends from the other side approach our responsibility to
protect Americans from themselves, it is our responsibility
they think to provide for Americans, that is the government's
responsibility. They do believe.
They come from a mentality that employers do not care about
their employees, when actually most employers really do care
about their employees, want them to be happy and satisfied,
safe and well with the healthcare they receive as Mrs. Watts
spoke to specifically.
With that, we will conclude our questioning of our
witnesses. I am sorry. I did not see Ms. Manning had slipped
in, so now we will go and recognize--my time has concluded. We
will recognize Representing Manning from North Carolina for 5
minutes.
Ms. Manning. Thank you so much, Mr. Chairman. Mr. Chairman,
I would like to point out that the Inflation Reduction Act put
a cap on the price of insulin for seniors, and as a direct
result of that Act, which was supported by House Democrats, and
signed into law by President Biden, two major manufacturers of
insulin, Eli Lilly and Novo Nordisk, have already announced
that they are reducing the cost of insulin to $35.00 for
everyone.
The law we passed has already had an enormous benefit for
everyone who needs insulin. I would like to stick with that.
The Inflation Reduction Act, and to ask Ms. Corlette, can you
give us your assessment of the IRA's emphasis, not only on
capping out-of-pocket costs, but also on lowering the
underlying prices of drugs like insulin?
Ms. Corlette. Sure. Full disclosure, I am not a Medicare
expert, but I think one of the key pieces of the Inflation
Reduction Act was to empower Medicare as a purchaser of
prescription drugs to negotiate for a selected set of drugs on
behalf of their beneficiaries, to try to get a lower price.
That is something that Medicare had been barred from doing.
Obviously, the law is just being implemented, and so it will be
a while before we see the full fruits of that negotiation
power, but I do think there's unfinished business because I
think many employer plans could also benefit from leveraging
that negotiating power against drug manufacturers.
Ms. Manning. In other words, extending these reforms to
private health plans, including employer supported plans, or
employer sponsored plans, could help make drugs more affordable
for consumers and businesses?
Ms. Corlette. Absolutely.
Ms. Manning. In your testimony, you raise the problem of
anti-competitive behavior in the prescription drug industry,
including financial practices that disfavor low-cost generic
and bio-similar drugs that driver higher prices. This is
concerning to me on a personal basis.
I myself had to fight for the coverage of my daughter's
medication, which my health insurance company gave me the
runaround on because it was going to cost $10,000.00 a month,
and fortunately I was able to win that fight, but I know so
many other people do not have the knowledge or the wherewithal
to keep fighting when they should be getting medications
covered by their health insurance companies.
At the level of pharmaceutical manufacturers, how can we
ensure that lower cost biosimilars are able to enter the market
without interference from brand name manufacturers? Can you
talk to us a little bit about what happens, what some of the
brand manufacturers do to prevent those generics from coming to
the market?
Ms. Corlette. Congresswoman Manning, this is also a bit
outside my expertise, but I can say that there is evidence that
pharmacy benefit managers often hold on to a significant
portion of rebates from drug manufacturers that should be
passed on to employers' health plans, and they often can
disfavor generic drugs if they do not come with rebates
relative to higher cost prescription drugs.
Ms. Manning. Thank you. Ms. Strouse, I saw you nodding your
head on that one, so I wonder if you could comment on that, and
also talk to me about the problem of transparency in the
pharmacy benefit manager industry.
Ms. Strouse. Yes. Actually, specifically in Iowa, we have
been trying to address this on the State level, and last
session we were successful in getting some transparency
legislation passed, so we are really excited to start to dig
into the information that we are receiving from the pharmacy
benefit managers.
I can tell you we cannot solve problems if we do not go to
the root cause of the problem, which truly is the drug
manufacturers. When we have medications that are truly
lifesaving, like for instance, for your child, if it is
$10,000.00, why is there not competition out there?
Why are they holding onto those prices? When we throw
around words like cap, it makes me anxious because a cap to me
means you are telling the insurance company they can only
charge $35.00. Well, the manufacturer is still charging that
full price through. Those are always going to feed into the
premiums. That is going to be one way or the other, everybody
is going to end up paying for that.
If we are not able to address it directly with the drug
manufacturers, then I am very excited to hear the progress on
the insulin side of things, because I do work in the Medicare
market, and we have a lot of people that are on insulin. That
is exciting, if that can drive change where the manufacturers
are actually reducing the costs across the board for everyone,
then that is going to be a solution.
If it is just capping through insurance, insurance is a
middle man. The prices are still what they are behind the
scenes with----
Ms. Manning. I have to agree with you. It is very exciting
that the law we passed to cap the price of insulin for seniors
has resulted in the cost of insulin being reduced for
everybody, and we can only hope that will continue. We are
facing a mental health crisis, and we know that telehealth has
become a key avenue for mental health services.
In my 10 seconds I have left, Ms. Corlette, how can
Congress ensure that part-time workers have access to some form
of telehealth, particularly for behavioral health?
Ms. Corlette. Well, there is nothing preventing employers
from offering part-time workers access to health benefit with
telemedicine. Also, if you are not offered an employer-based
plan, you can choose to buy a marketplace plan, and many of
these marketplace plans are also covering telehealth services.
Ms. Manning. Thank you. My time has expired, and I yield
back.
Chairman Good. Thank you, Congresswoman Manning, and
without objection before we close, I enter in the record
letters supporting efforts to enhance healthcare affordability
from the following organizations: Americans for Prosperity,
bipartisan organization supporting site neutral payments, the
American Hospital Association, the ERISA Industry Committee,
the National Association of Benefits and Insurance
Professionals, NFIB, and the Partnership for Employer Sponsored
Coverage.
[The letters of Mr. Good follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Good. Again, I would like to thank all four of our
witnesses for taking the time to testify before the committee
on this very important issue today. Without objection, there
being no further business, the committee stands adjourned.
[Whereupon the Subcommittee on Health, Employment, Labor,
and Pensions adjourned at 12:23 p.m.]
[all]