⚡️ NIMITZ HEALTH NEWS FLASH ⚡️ 

“The Rising Cost of Health Care: Considering Meaningful Solutions for all Americans”

Senate Finance Committee

November 19th, 2025 (recording linked here)

WITNESS & TESTIMONY

• Douglas Holtz-Eakin, Ph.D.: President, American Action Forum

• Jason Levitis: Senior Fellow, Health Policy, Division Urban Institute

• Brian Blase, Ph.D.: President, Paragon Health Institute

• Bartley Armitage: Patient Advocate

HEARING HIGHLIGHTS

MEMBER OPENING STATEMENTS

• Chair Crapo (R-ID) said the shutdown highlighted a broken health system and argued that sending more money to insurers was not a real solution. He said Obamacare failed to control premiums and out of pocket costs and that enhanced covid era credits only hid structural problems and fraud while playing a small role in current premium hikes. He called for shifting support toward consumers through tools like health savings accounts, the medical expense deduction, funded cost sharing reductions, and PBM reform, along with steps on consolidation, telehealth, and clinician pay. He framed the hearing as a first bipartisan step to tackle root drivers of health care costs rather than extend what he viewed as bad policy.

• Ranking Member Wyden (D-OR) said families were facing a health care crisis right now, with premiums doubling and worse during open enrollment while Republicans delayed action on enhanced tax credits. He argued that months were spent on tax cuts and health care cuts instead of preventing coverage losses and that only a clean extension this year could realistically protect people starting in January. He expressed skepticism that Republicans were truly ready to challenge big insurers and middlemen and warned that some tax preferred account ideas mainly benefit insurance giants and wealthier people rather than families like the Armitages. He pledged that Democrats would block efforts to add new abortion restrictions to the tax code and said a straight extension must come first, followed by bipartisan work to lower costs, curb fraud, and rein in insurer abuses.

WITNESS OPENING STATEMENTS

• Dr. Holtz-Eakin said the Affordable Care Act had always been flawed as health insurance, economic, and budget policy, pointing to rigid rules, high costs, and incentives that push employers and workers out of employer coverage. He warned that generous subsidies undermine employer plans and worsen federal finances and said adding more mandatory spending without offsets would be unwise. He noted that for the 2026 plan year premiums and plans were already set so Congress could make only small adjustments through tools like savings accounts, not major changes. He urged a broader reset that rationalizes all federal insurance subsidies and strengthens incentives for high value care, with Medicare Advantage as a key lever to improve both outcomes and the budget.

• Mr. Levitis said the health and tax system had become overly complex, with many types of tax favored health arrangements that add cost, and he offered to help the committee simplify it over time. His main warning was that expiration of the enhanced premium tax credits would sharply raise premiums for almost all 24 million people in the individual market, leave millions uninsured, and strip major revenue from providers, hitting older people, rural areas, and self employed workers especially hard. He stressed that because open enrollment and systems work were already underway, Congress did not have time to design and implement a new alternative policy for 2026. He concluded that only a clean extension of the current enhanced credits could quickly stop and reverse the harm for families like the Armitages while the committee pursued deeper bipartisan reforms.

• Dr. Blase said the Affordable Care Act had failed to deliver affordable, high quality coverage, citing lost plans and doctors, sharply higher premiums and deductibles, and strong insurer profits driven by large federal subsidies. He argued that the subsidy design and regulations weakened price discipline, encouraged premium inflation, and spurred fraud, especially after the covid era subsidy boost, while also nudging some employers and governments to drop coverage. He opposed extending the temporary enhanced credits, saying they locked in a high cost insurance dominated system and expanded taxpayer risk. He recommended instead that Congress fund cost sharing reduction payments to lower silver premiums and deficits, give lower income people the option to receive that help as health savings account contributions they control, and expand flexible, lower cost coverage options without new federal spending.

• Mr. Armitage told the committee that he and Carla had worked hard all their lives in Eugene Oregon, with him in construction for nearly four decades and her teaching for 25 years while they raised three children and now enjoy three granddaughters. He described serious health issues and surgeries that left them with tens of thousands of dollars in medical debt even with insurance and said they could not imagine facing that without coverage. He explained that they now faced a premium that would jump to roughly five times what they pay today, forcing them to consider draining the retirement savings they built to secure a basic, dignified old age and to afford care so they can watch their granddaughters grow up. He urged Congress to act quickly so families like theirs do not lose access to needed care overnight when new bills arrive in January and said affordable health care is exactly what they expect their tax dollars to support in a strong and wealthy country.

QUESTION AND ANSWER SUMMARY

• Chair Crapo (R-ID) focused on using health savings accounts for people in bronze and catastrophic plans. Dr. Holtz-Eakin said that longer term deposits of several thousand dollars per enrollee could cost less than premium tax credits and push people into lower premium coverage.

  Chair Crapo highlighted an idea to appropriate cost sharing reductions and route that value into HSAs. Dr. Blase said this could cut silver premiums about 12 percent, reduce deficits roughly 30 billion dollars, and leave most low income enrollees better off. Dr. Blase also pointed to association health plans and short term plans as lower cost options that could expand networks and competition.

• Ranking Member Wyden (D-OR) warned that tax focused proposals risked steering people like the Armitages into underpowered coverage and said they needed stable, comprehensive insurance, not cash arrangements that would not meet serious needs. Mr. Armitage said he and Carla had only managed past bills because of solid coverage and felt confused and worried by new schemes. Mr. Levitis added that it was too late to build a new account system for 2026 and that small deposits could not substitute for full insurance, and he urged Congress to rein in insurer practices such as prior authorization instead.

• Sen. Grassley (R-IA) underscored high health and drug costs in Iowa, promoted PBM transparency legislation, and argued that Obamacare had failed to bend the cost curve given large premium increases versus employer plans and inflation. Dr. Holtz-Eakin replied that transparency could help but warned that piling on rigid federal mandates risked undermining private markets and said health policy should follow sound economic principles with broad low taxes and targeted regulation.

• Sen. Cornyn (R-TX) framed ACA subsidies against rising federal debt and said it was not sustainable to keep a one size fits all subsidy model that covered a relatively small share of Americans.

  Sen. Cornyn highlighted evidence of fraud in fully subsidized ACA plans, and Dr. Blase described gift card marketing schemes that enrolled people without their understanding, with taxpayers paying insurers directly while many enrollees never used coverage. Dr. Blase cited data showing that about 40 percent of fully subsidized enrollees had no claims and that roughly 85 percent of ACA insurer revenue now came from federal payments.

• Sen. Bennet (D-CO) agreed the health system was broken and said Coloradans were paying roughly twice what people in other wealthy countries paid while getting worse outcomes and weaker access to primary, mental, and maternal care and affordable drugs. He said Congress needed to extend enhanced ACA tax credits immediately to avoid premium spikes of 200 to 400 percent in rural and urban areas but stressed that this would only prevent near term financial disaster.

  Sen. Bennet voiced support for a universal approach that included a Medicare administered public option to let families move away from the current insurance system. Mr. Levitis agreed that whatever reforms were chosen should keep insurance affordable rather than withdrawing support.

• Sen. Cassidy (R-LA) said both parties effectively agreed that Obamacare had failed to deliver broad access or cost control and stressed that high premiums and deductibles were blocking people like Mr. Armitage from using coverage.

  Sen. Cassidy highlighted evidence that health savings accounts could cut family health spending by about 15 to 25 percent without harming outcomes. Dr. Blase confirmed, and said this showed patients could be trusted as active shoppers.

  Sen. Cassidy criticized ACA medical loss ratio rules for allowing about one fifth of premium dollars to go to overhead and profit rather than care and urged colleagues to consider reforms that shift dollars and decision making away from insurers and into patient controlled accounts.

• Sen. Whitehouse (D-RI) said fee for service payment failed and urged a shift to value based care, including broader use of accountable care organizations and less pricing power for specialists. He called prior authorization a major, unnecessary cost driver in value based arrangements and proposed requiring “prior approval for prior approvals” to curb insurer overhead.

  Sen. Whitehouse highlighted that people like Mr. Armitage faced immediate premium spikes, and Mr. Armitage said his monthly premium would jump from $443 to $2,224 on January 1, 2026, after he and Carla lost access to affordable employer coverage and needed time and help to transition. Mr. Levitis said the combined effect of premium increases and reconciliation cuts would pull more than a trillion dollars of federal support out of the health system and warned this would drive hospital closures and broader provider instability.

• Sen. Daines (R-MT) argued that Democrats created the enhanced ACA subsidies as a temporary partisan measure and that making them permanent would cost nearly 400 billion dollars while deepening what he called fundamental ACA failures. He said expiring covid subsidies were not the main driver of 2026 premium hikes but had distorted markets, increased fraud, and worsened long term budget pressures, and he called for structural ACA reforms plus expanded free market, Trump era options and Hyde-consistent limits on abortion coverage. Dr. Blase agreed that simply extending subsidies would entrench inefficiency and urged alternatives such as association health plans and short term plans, as well as changes to ACA rules like the medical loss ratio and subsidy design so insurers faced real price discipline.

• Sen. Smith (D-MN) said there was only one realistic way to prevent January premium spikes, which was extending ACA tax credits. She criticized proposals to send people cash instead of subsidizing insurance, and Mr. Levitis said that approach would leave people like the Armitages unable to afford coverage and would raise premiums as healthier people exited the market. Mr. Armitage said a one time check of around $6,500 would cover only a few months of premiums before leaving them back at “ground zero” without ongoing protection.

  Sen. Smith also said Republicans were leveraging the debate to push new abortion limits through insurance. Mr. Levitis confirmed that federal funds cannot be used for abortion care under Hyde and that ACA tax credits are already structured to keep federal dollars from directly funding abortion

  Sen. Smith argued that extending credits would not change those rules but that anti abortion groups were seeking a de facto national ban on abortion coverage in private plans.

• Sen. Johnson (R-WI) said Obamacare’s design had driven benchmark premiums up far faster than inflation and that Democrats were denying the scale of that damage. He argued that the current fight was over enhanced credits for people above 400 percent of poverty and that it was reasonable to expect households to pay around 6 to 9.5 percent of income for premiums under the original ACA design. Mr. Armitage reiterated that regardless of the formulas, his premium would still increase by about 500 percent, which he viewed as unmanageable.

  Sen. Johnson said eliminating high risk pools had concentrated the cost of covering preexisting conditions on a small slice of the market and claimed the underlying problem was a third party payer system that removed consumer discipline. Dr. Holtz-Eakin agreed that restoring more consumerism and competition would be a major improvement over relying on an expansive federal payment system.

• Sen. Cantwell (D-WA) said the immediate priority was preventing people from losing coverage on January 1 and driving up uncompensated care, even while longer term ACA changes were debated.

  Sen. Cantwell highlighted the basic health program as an Affordable Care Act tool that lets states bundle people up to 200 percent of poverty into more affordable coverage, noting large savings and lower uninsured rates in states like New York, Minnesota, Oregon, and DC. Mr. Levitis agreed the basic health program could significantly reduce uninsured rates and costs and said extending it to higher income levels could smooth coverage gaps.

  Sen. Cantwell stressed that in the short term Congress still needed to extend the current credits to stabilize markets while states explore these options.

• Sen. Hassan (D-NH) said open enrollment was already underway and described constituents seeing premiums jump by hundreds of dollars per month, which she linked to the lapse of enhanced premium tax credits. Mr. Armitage said that on a fixed income a 500 percent premium increase felt like suddenly having a car payment quintuple overnight and that his family could not absorb such a shock. Mr. Levitis said marketplaces were already technically prepared to restore the enhancements and confirmed that Congress could still lower 2026 costs by passing an extension by mid December, adding that he had seen no other realistic proposal that could deliver relief by January 1.

• Sen. Cortez Masto (D-NV) said the ACA enhanced credits were the known solution to avert a near term cost crisis and that some bipartisan parameters could be debated later, but only after preventing a coverage cliff in January. Mr. Levitis said simply extending the current enhancements was the only short term option that marketplaces could implement in time and warned that even modest structural tweaks to the tax credits would require new systems, testing, and deployment beyond open enrollment. He added that sending checks directly to consumers would not guarantee coverage of preexisting conditions or reduce underlying costs, and he noted evidence that similar accounts can increase health spending.

• Sen. Barrasso (R-WY) said Obamacare had driven premiums sharply higher in rural states like Wyoming and that temporary covid era subsidies had failed to fix deep structural problems while contributing to high taxpayer costs. Dr. Blase said the ACA’s regulatory and subsidy design inflated premiums and spilled over into employer markets and argued that more taxpayer subsidies simply poured fuel on an inefficient system. Dr. Holtz-Eakin urged more competition in rural areas through pooling mechanisms such as Farm Bureau plans, short term coverage, and rural transformation funding.

• Sen. Warren (D-MA) said health costs were already crushing families and that millions now faced steep premium hikes because Republicans had chosen tax cuts over extending ACA tax credits. Mr. Levitis said ACA premiums would roughly double on average next year, with some older middle income couples paying tens of thousands of dollars more, and he noted that virtually everyone with ACA coverage would face higher costs as tax credits shrink. He added that employer premiums were also rising due to broader cost pressures, and estimated that permanently extending ACA tax credits would save Americans on the order of 25 to 30 billion dollars in premiums next year, with even larger benefits when avoided medical debt and uncompensated care were considered.

• Sen. Marshall (R-KS) said Obamacare had funneled rising subsidies to insurers, driven consolidation, and produced premiums and deductibles so high that many people still lacked real access to care. He urged making patients true consumers through health savings style accounts, price transparency, reinsurance, and Singapore inspired models that let unused funds grow toward retirement. Dr. Blase agreed that the ACA had given insurers excessive power through subsidies and mandates and said shifting dollars and decision making from insurers to patients and families would spur innovation and help lower premiums.

• Sen. Luján (D-NM) pressed on whether removing about one trillion dollars in health subsidies would help or hurt people and they replied that it depended on how cuts were structured and that inefficient subsidies should be reduced. He stressed that many beneficiaries of enhanced credits lived in Trump voting states and warned against short term junk plans that exclude key services such as cancer treatment. He urged Republicans to join Democrats in extending premium tax credits, banning junk plans, and designing broader reforms.

• Sen. Tillis (R-NC) said the debate was missing a coherent strategy to tackle underlying cost drivers and instead cycled through blaming insurers, drug makers, providers, and benefit managers. He argued that ACA design flaws and years of weak policy oversight had produced a costly patchwork system and said all major stakeholders should expect to take financial cuts. He stated that although he opposed the structure of the enhanced subsidies, millions of people now relied on them, so Congress should extend support in the short term while planning a multiyear glide path to phase subsidies down and invite private and state solutions. Dr. Holtz Eakin said that making catastrophic options broadly available inside the marketplaces would slightly improve the risk pool, raise coverage compared with letting credits expire, lower federal spending, and sharply reduce the cost of catastrophic and bronze plans.

• Sen. Sanders (I-VT) argued that the United States should join other wealthy countries in guaranteeing health care as a right and asked why the nation tolerated tens of thousands of avoidable deaths, medical bankruptcies, and lower life expectancy while spending far more per person.

  Sen. Sanders pressed each witness on whether health care was a human right and whether people with serious illnesses like cancer should get all needed treatment regardless of income. Mr. Levitis said the country should provide universal, comprehensive, affordable coverage and Dr. Blase said he favored a strong safety net but wanted less government control and more market focus. Mr. Armitage supported extending subsidies as an immediate step toward broader protection.

• Sen. Welch (D-VT) said he believed every American should have affordable coverage for basic and serious conditions and that the United States spent the most and got the least in return. He argued that Congress had no realistic choice but to extend the ACA tax credits now in order to prevent people from losing coverage, then use the breathing room to work on bipartisan structural reforms that reduce costs and improve health care security.

• Sen. Warnock (D-GA) highlighted that non-expansion states like Georgia, Texas, South Carolina, Wyoming, Tennessee, and Kansas depended heavily on enhanced tax credits and used the example of a minimum wage worker in Macon who would go from zero premiums to about six hundred dollars a year while peers in Medicaid expansion states paid nothing. Mr. Levitis said many low wage workers in non expansion states would likely become uninsured and face crushing medical costs and confirmed that health savings accounts would not solve their premium problem or restore zero dollar coverage.

  Sen. Warnock urged Congress to extend the tax credits now to protect workers’ health and financial stability, then take up longer term reforms once the immediate cliff was avoided.