This week, the House Committee on the Budget held a hearing titled “Reverse the Curse: Skyrocketing Health Care Costs and America’s Fiscal Future,” focused on how rising health care costs affect both federal finances and household affordability. While the discussion touched on coverage and access, the hearing reflected a broader shift in federal health policy debates toward long-term cost growth, fiscal sustainability, and the structure of public and private health care financing. 

Members from both parties acknowledged that health care spending represents a significant and growing share of the federal budget and the overall economy. Republican members emphasized that health care now accounts for roughly one-third of federal spending, excluding interest, and nearly one-fifth of gross domestic product, arguing that recent spending trends are increasingly difficult to sustain. Witnesses reinforced this concern, noting that although health spending growth had moderated for much of the past decade, more recent data show renewed acceleration, with costs rising faster than inflation and economic growth. There was general agreement that broad cuts alone are unlikely to address these trends; spending needs to be tied to value.  

Much of the hearing centered on how policy design influences health care costs. Examples of poor policy designs referenced in the hearing included open-ended subsidies in Medicare, Medicaid and the Affordable Care Act (ACA); limited constraints on low-value care; and the tax exclusion for employer-sponsored insurance, which reduces consumers’ sensitivity to price. Several witnesses also pointed to consolidation among hospitals and insurers, noting that federal policies can unintentionally favor scale over competition, contributing to higher prices and fewer choices in many markets. 

The expiration of Enhanced ACA Premium Tax Credits was a focal point of the affordability discussion. There was disagreement over whether current affordability challenges stem primarily from subsidy expiration or from structural features of the ACA itself. Democratic members cited Congressional Budget Office estimates suggesting that millions of individuals could lose coverage following the lapse of the enhanced subsidies, emphasizing the potential impact on premiums and household budgets. Republican members countered that the temporary subsidies obscured underlying cost growth within the ACA Marketplaces and raised concerns about program integrity, including income verification and enrollment practices.  

Joyce Renee Bumbray-Graves, a home care worker, described losing ACA marketplace coverage after the enhanced tax credits expired, which increased her premiums from roughly $544 to more than $1,300. She shared that higher costs led her to delay care and stop taking certain medications. Her testimony was frequently referenced by Democratic members to illustrate the practical effects of coverage loss, while Republican members acknowledged the individual impact but emphasized concerns about sustainability and oversight. 

In written testimony, UnitedHealth said the company would provide rebates to customers enrolled in its Marketplace plans for 2026 to increase affordability. The company also blamed hospitals and drug manufacturers for price increases.  

Prior authorization was also referred to as an issue of concern. Rep. Greg Murphy, (R-NC), a physician, cited a personal example, where he sought to secure a medication that he needed. Even as a member of Congress and physician himself, Murphy said he had to go through eight denials before the claim was finally approved. “You have put profits above patients and you have put profits above those who care for patients,” he said.  

The hearing also addressed inefficiencies and integrity issues across federal health programs. Witnesses discussed geographic variation and low-value utilization in Medicare fee-for-service, payment accuracy in Medicare Advantage, Medicaid financing mechanisms such as provider taxes and income estimation processes within the ACA Marketplaces. While there was broad agreement that waste, fraud and inefficiencies exist across programs, members differed on how widespread these issues are and how aggressively they should be addressed. 

Prescription drug pricing emerged as one of the few areas where perspectives overlapped. Witnesses acknowledged that drug prices in the United States remain significantly higher than in other countries and don’t consistently align with innovation. Some raised concerns that existing Medicare drug negotiation policies may not fully address future high-cost therapies, prompting interest from both parties in continued discussion around Pharmacy Benefit Manager practices and drug pricing transparency. 

Concerns about consolidation cut across many parts of the hearing. Members from both parties pointed to consolidation among hospitals, insurers and pharmacy benefit managers as a contributor to higher prices and reduced competition, particularly in rural and semi-rural areas. References to antitrust enforcement, site-of-service payment differences, and merger and acquisition policy suggested potential areas for further bipartisan engagement, even as broader disagreements over coverage and subsidies remain unresolved.