⚡️ NIMITZ HEALTH NEWS FLASH ⚡️ 

“Reverse the Curse: Skyrocketing Health Care Costs and America’s Fiscal Future”

House Budget Committee

January 21st, 2026 (recording linked here)

WITNESS

• Dr. Benedic Ippolito, Ph.D.: Senior Fellow, American Enterprise Institute

• Mr. Avik Roy: Co-Founder and Chairman, Foundation for Research on Equal Opportunity

• Mr. Joel White: President, Council for Affordable Health Coverage

• Mrs. Rena Bumbray-Graves: Member of the Service Employees International Union (SEIU) and Home Care Worker

HEARING HIGHLIGHTS

MEMBER OPENING STATEMENTS

• Chair Arrington (R-TX) opened the hearing by emphasizing that skyrocketing health care costs harmed working families and posed a major threat to the nation’s fiscal future. He argued that health care spending now represented a massive and growing share of both the economy and the federal budget, making the country’s debt trajectory unsustainable. He criticized Democrats for pursuing what he described as government-run health care through the Affordable Care Act and subsidies, and he also challenged Republicans to move beyond criticism and deliver real market-based reforms. He urged bold action in the current legislative moment, highlighting areas like PBMs and site-neutral payments as potential bipartisan opportunities to lower costs.

• Ranking Member Boyle (D-PA) argued Republicans were acting hypocritically by holding a hearing on health care after passing legislation he said would strip coverage from more than 15 million Americans. He asserted that the “big beautiful bill” primarily benefited billionaires through trillions in tax cuts while financing those cuts through roughly $1 trillion in health care reductions, especially to Medicaid. He cited Congressional Budget Office projections to argue that millions would lose coverage and that premiums would rise sharply, including large increases for exchange plans in Pennsylvania. He concluded that the Republican approach worsened both access and affordability, and he mocked the administration’s health care posture as essentially telling Americans not to get sick.

WITNESS OPENING STATEMENTS

• Dr. Ippolito testified that although health care spending had remained relatively stable as a share of GDP for many years, recent data showed a renewed acceleration that was not sustainable. He noted that 2024 spending grew 7.2 percent, driven primarily by higher utilization and intensity of services rather than general price increases. He warned that federal budget pressures were intensifying because the federal government now covered about half of total health expenditures and relied heavily on open-ended subsidies in programs like Medicaid expansion and the ACA marketplaces. He argued that the most promising policy approach was to target areas where federal spending was weakly tied to value, including low-value care in traditional Medicare and insurer behavior that increased spending in Medicare Advantage.

• Mr. Roy argued that long-term fiscal sustainability required slowing the growth of federal health care spending through entitlement reform that protected vulnerable populations. He contended that the United States heavily subsidized health care compared to other wealthy nations and ranked poorly on fiscal sustainability and affordability despite leading in science and technology. He maintained that the central driver of high U.S. costs was the historic tax exclusion for employer-sponsored insurance, which he said distorted incentives and fueled rising prices over decades. He recommended moving toward a Swiss-style system centered on individually purchased private coverage, and he also advocated bipartisan steps to lower ACA premiums by improving affordability for younger and healthier enrollees.

• Mr. White warned that rising health care costs threatened the economy, burdened families and businesses, and posed an unsustainable risk to the federal budget. He argued that policy choices in the Affordable Care Act and Inflation Reduction Act reduced market competition and encouraged consolidation among insurers and hospitals, enabling them to raise prices. He stated that most hospital and Medicare plan markets were uncompetitive and that this lack of competition drove higher premiums and out-of-pocket costs, which taxpayers then reinforced through subsidies. He urged Congress to pursue reforms focused on transparency, stronger consumer choice, anti-consolidation steps, and tools like HSAs, while rejecting price controls and emphasizing faster market entry for lower-cost products.

• Mrs. Bumbray-Graves described her work as a home care provider for family members with severe disabilities and emphasized that caregiving was essential work often carried by Black women and women of color. She testified that she and her husband previously obtained coverage through the Affordable Care Act, but after the loss of tax credits their premium rose dramatically and became unaffordable, forcing them to drop coverage. She explained that she was now uninsured while managing multiple health conditions, including COPD related to pulmonary embolisms, and she said she could not afford necessary prescriptions without insurance. She described financial stress from out-of-pocket medical costs, including her husband’s recent arm injury, and she pleaded with Congress to restore the ACA tax credits so she could regain coverage.

QUESTION AND ANSWER SUMMARY

• Chair Arrington (R-TX) argued that rising federal health spending required rooting out waste, fraud, and abuse in Medicaid and ACA subsidies to protect benefits for eligible recipients. He pressed that reforms targeted ineligible enrollees, not vulnerable people, and framed the issue as sustainability for taxpayers and future generations. Mrs. Bumbray-Graves said she followed the rules but still lost coverage and emphasized her concern was restoring insurance for people using the program correctly.

• Ranking Member Boyle (D-PA) asked what premiums were before and after ACA tax credits ended. Mrs. Bumbray-Graves said costs rose from $544/month to ~$1,300/month, forcing her to drop coverage and leaving her uninsured.

  Rep. Boyle argued her testimony contradicted claims coverage losses were mostly fraud-related and warned that delayed care would shift costs to ERs and worsen outcomes. Mrs. Bumbray-Graves said if she became too sick to provide care, her disabled family members could be removed from the home, which would be devastating.

• Rep. Smucker (R-PA) said premium increases had been building for years and urged bipartisan reforms that reduced costs beyond short-term subsidies. Mr. Roy said ACA premiums rose because design flaws pushed young/healthy people out, and he pointed to the Fair Care Act as a private-market reform framework.

• Rep. Doggett (D-TX) raised prescription drug price gouging and asked whether high prices drove innovation. Mr. Roy said the industry argument was overstated, noting innovation often came from startups and competition worked better for small-molecule drugs than biologics.

  Rep. Doggett supported Medicare negotiation expansion but said IRA negotiation rules were poorly designed and demanded stronger action on manufacturer pricing. He added that ACA fraud was driven by broker misconduct and criticized the administration for reinstating suspended brokers.

• Rep. Grothman (R-WI) cited GAO findings on fictitious ACA applicants, unreconciled tax credits, and subsidies linked to deceased SSNs to argue the program lacked integrity. Mr. Roy said ACA income estimates created an “honor system” vulnerability and recommended tying subsidies to prior-year verified income and improving verification systems. He also argued shifting able-bodied Medicaid expansion enrollees into exchange plans could reduce churn, stabilize networks, and cut federal costs.

  Rep. Grothman asked about savings from removing mental health mandates. Mr. Roy said definitions were overly broad and could be tightened but gave no firm estimate.

• Rep. Panetta (D-CA) asked how tariffs and workforce constraints were raising costs. Mr. White said tariffs increased input costs and constrained supply of clinicians raised prices, and he urged expanded training capacity and greater use of pharmacists as lower-cost care access points.

  Rep. Panetta raised Medicare access issues and pushed indexing physician reimbursement to inflation. Dr. Ippolito said inflation indexing was generally reasonable.

• Rep. Moore (R-UT) asked what questions to ask insurers about premium growth and key cost drivers. Dr. Ippolito said insurers’ hospital and drug prices drove premiums and urged scrutiny of marginal spending with low value, including in Medicare Advantage.

  Rep. Moore asked for reconciliation priorities. Mr. White urged tackling consolidation, making subsidies portable to cheaper plans, and expanding discounted prescription pricing.

• Rep. Plaskett (D-VI) argued that $1 trillion in health coverage cuts under H.R. 1 would hit territories hard, and she described the Virgin Islands as a warning sign of what happens when federal support is inadequate. She said the Virgin Islands lacked an ACA exchange and SSI access, faced capped Medicaid funding, and operated under outdated Medicare reimbursement formulas that forced patients to bring basic supplies and providers to personally cover vendor costs. She warned that similar cuts nationwide would trigger cascading strain on hospitals and local budgets, and she urged lawmakers to treat government intervention as part of the solution.

• Rep. Edwards (R-NC) asked how to better support rural hospitals that were squeezed by payer mix and allegedly disadvantaged by “provider tax” dynamics that he said disproportionately benefited large systems. Dr. Ippolito responded that rural hospitals had legitimate grievances because policy debates often reflected the priorities of sophisticated, well-resourced hospitals rather than struggling facilities, and he said true competition was often impossible in rural areas. Mr. Roy said policy could pair tougher anti-monopoly efforts in metro markets with enhanced support for critical access hospitals, and he argued that consolidation and network-adequacy leverage could allow large systems to impose high prices by tying rural access to metro pricing.

• Rep. Balint (D-VT) asked what the premium spike meant for daily life. Mrs. Bumbray-Graves responded that losing affordable coverage forced the family to cut back on basic and quality-of-life spending, delay preventive care, and juggle expensive medications, including diabetes drugs for her husband, while still paying taxes and other household bills.

  Rep. Balint said consolidation and monopolies were central cost drivers and pointed to antitrust as an area for bipartisan work.

• Rep. Clyde (R-GA) asked what would happen if health spending continued rising and what Congress should prioritize. Dr. Ippolito said accelerated growth would eventually make current benefit promises unsustainable and that policy should avoid open-ended subsidies that automatically rise with costs across the ACA, employer coverage tax exclusion, and Medicaid matching formulas.

  Rep. Clyde asked about “zero-claim” exchange enrollees and potential fraud. Mr. White responded that roughly 35% of exchange enrollees had no claims, that subsidies still flowed automatically to insurers, and that requiring a small minimum premium could help consumers detect unwanted enrollment and deter fraudulent sign-ups tied to brokers or plan behavior.

• Rep. Chu (D-CA) asked how the loss of ACA tax credits was affecting day-to-day sacrifices and mental health, citing large premium jumps for constituents. Mrs. Bumbray-Graves responded that the situation created constant worry, that her husband’s reduced disability income was quickly consumed by out-of-pocket medical bills, and that she feared her own health would decline while she continued working despite serious underlying conditions. She said the ACA was not perfect but had made coverage workable, and she contrasted a prior $90 insured visit with a $300 uninsured visit as evidence of the financial whiplash from losing coverage.

• Rep. Stutzman (R-IN) asked how the system incentivized “sick care” over prevention and what policy changes could help. Mr. White responded that wellness-based premium discounts were effectively barred in the individual market and said allowing financial incentives for diet and fitness could reduce long-term costs. He also said Medicare Advantage supplemental benefits were poorly structured, with “healthy food” not treated as primarily health-related, and he argued for rules that made nutrition support easier to provide for high-cost chronic conditions to reduce downstream utilization.

• Rep. McGarvey (D-KY) argued that ACA credit expiration and broader cost pressures forced families into impossible tradeoffs and asked whether higher costs stopped people from getting sick. Mrs. Bumbray-Graves responded that people still got sick and faced costs even when insured, citing a $90 insured office payment for her husband’s broken arm.

  Rep. McGarvey connected rising costs across groceries, utilities, and other necessities to higher health premiums and asked what that meant for her. Mrs. Bumbray-Graves said premiums at mortgage-level prices forced the family to forgo other needs and left them unable to afford coverage, while she tried to stay healthy enough to keep working despite conditions like pulmonary embolisms and COPD.

• Rep. Moore (R-NC) asked how provisions in the Working Families Tax Cuts Act strengthened Medicaid. Mr. Roy responded that tighter program integrity would reduce ineligible enrollment and that limiting state “provider tax” financing schemes could curb inflated Medicaid spending, which he said had made Medicaid expansion subsidies more expensive than exchange subsidies despite earlier projections.

  Rep. Moore asked what changes were needed to address vulnerabilities in Medicaid and Medicare. Dr. Ippolito responded that incentives mattered most, warning that very high federal match rates created persistent “fraud-adjacent” behavior risks, and he called for stronger policing in traditional Medicare and better payment accuracy and coding safeguards in Medicare Advantage.

  Rep. Moore asked what policy objectives should guide reforms beyond “throwing more money” at the ACA. Mr. White responded that the system trapped consumers in expensive ACA plan designs and argued for letting subsidies be used on lower-cost plans to increase consumer choice and competition.

• Rep. Escobar (D-TX) argued Republicans had pursued major Medicaid and ACA cuts to fund tax breaks and said the lapse in ACA premium tax credits was costing coverage in her district, including nearly 100,000 El Paso residents who relied on subsidies.

  Rep. Escobar framed budgets as priorities and asked a series of “health care or ___” questions about renaming DoD, buying Greenland, funding ICE, and subsidizing Venezuelan oil, with Mrs. Bumbray-Graves repeatedly choosing health care.

• Rep. Cline (R-VA) asked how Medicare policy and scope-of-practice laws affected rural primary care access, and Mr. Roy said scope restrictions hindered NPs and PAs from practicing at the top of their license and that AI could expand their effectiveness. He also suggested easing pathways for internationally trained physicians to serve in underserved areas while completing U.S. licensing.

  Rep. Cline then promoted HSAs and asked whether expanding them would affect federal spending. Mr. Roy pointed to allowing HSAs for direct primary care and argued DPC could improve outcomes and reduce hospitalizations. He criticized Medicaid reimbursement as a driver of limited provider participation and worse outcomes because patients often could not access primary care.

• Rep. Kaptur (D-OH) argued the reconciliation bill increased debt while throwing millions off coverage and delivering large, durable tax benefits to high earners, urged the public to pressure senators to move an ACA-related bill.

• Rep. McDowell (R-NC) argued a system requiring major subsidies did not work and said rising federal spending benefited large industry players more than patients. Mr. White said consolidation had favored hospitals and insurers, reflected in stock prices.

  Rep. McDowell emphasized Congress did not set negotiated rates or premiums and said private equity and consolidation responded to regulatory “handcuffs,” then yielded back.

• Rep. Watson Coleman (D-NJ) said the system was broken and overly complex but argued Republicans could not credibly claim they prioritized affordable coverage while supporting policies that cut Medicaid and Medicare. She cited constituent premium spikes and coverage losses and accused Republicans and the President of pursuing policies that advantaged the wealthy at the expense of vulnerable families.

• Rep. Carey (R-OH) cited medical inflation and premium growth to argue costs were worsening and noted a significant share of enrollees filed no claims, saying coverage did not equal access. He asked whether longer coverage periods and incentives could encourage prevention, and Mr. White supported premium discounts tied to verified wellness behaviors. Dr. Ippolito cautioned that prevention should be judged on both cost and health outcomes, including longevity, even when spending did not fall.

  Rep. Carey recited a coverage breakdown across employer-sponsored insurance, Medicaid, Medicare, ACA marketplaces, veterans/TRICARE, and the uninsured, then asked White how Association Health Plans could help small businesses. Mr. White argued ACA regulation reduced small-business offering rates and said AHPs could lower premiums materially by allowing small employers to pool into large-group rules.
  

• Rep. Jayapal (D-WA) criticized Republicans for invoking fraud while ignoring financial wrongdoing and Medicare Advantage overpayments and argued the administration was not meaningfully addressing those issues. She highlighted bipartisan interest in tackling consolidation and promoted her “Stop Anti-Competitive Health Care Act.”

  Rep. Jayapal asked what guaranteed coverage from birth to death would mean. Mrs. Bumbray-Graves said it would enable preventive care and earlier treatment instead of waiting for emergencies.

• Rep. Brecheen (R-OK) highlighted international comparisons showing higher U.S. spending with weaker outcomes and argued government intrusion since the ACA had raised costs and fueled insurer gains. He asked for an outline free-market alternatives like catastrophic coverage, HSAs, and cost-sharing models. Mr. Roy described CrowdHealth as a pooled, non-insurance model negotiating cash prices and claimed significant monthly savings versus ACA options.

• Rep. Scott (D-VA) challenged the CrowdHealth model’s solvency risk and questioned whether hospitals would accept lower cash rates without litigation. Mr. Roy said the model’s scale and negotiated pricing had prevented shortfalls and argued it illustrated how insurance bureaucracy inflated prices.

  Rep. Scott contrasted the cost of the reconciliation bill with the estimated cost of extending enhanced ACA tax credits, and Dr. Ippolito disputed that “cost shifting” from uninsured care meaningfully raised private negotiated prices, suggesting the impact would more likely fall on hospitals.

• Rep. Roy (R-TX) cited concentration across PBMs and insurance markets and argued consolidation worsened after the ACA. Mr. White said hospital market concentration had risen sharply.

  Rep. Roy promoted a “healthcare freedom” framework centered on HSAs, direct primary care, health sharing, and freer catastrophic options, and Dr. Ippolito said that general approach would likely lower costs.

  Rep. Roy also criticized CBO scoring limits in modeling market dynamics, and highlighted codifying ICHRAs as a way to move employer dollars into portable individual coverage.

• Rep. Omar (D-MN) asked for an explanation universal insurance, and Mr. Roy described a Swiss-style model of regulated individual coverage with sliding-scale subsidies.

  Rep. Omar asked what ACA regulations to update, and Mr. Roy pointed to widening age bands, adjusting subsidies by age, and funding reinsurance to lower premiums while protecting higher-cost enrollees.

• Rep. Amo (D-RI) argued affordability pressures were worsened by Republican policy choices and cited Rhode Island-specific impacts, including marketplace enrollment declines and expected increases in uninsured emergency-room use. Rep. Amo asked how a roughly 140% premium increase affected her decisions. Mrs. Bumbray-Graves said she would forgo preventive care, delay treatment, work more, and skip prescriptions unless her condition felt truly dire.