The CEOs of the nation’s largest health insurers drew the ire of lawmakers on both sides of the aisle during congressional hearings Jan. 22 over industry consolidation, prior authorization practices and executive pay, with members pressing executives to explain how vertical integration benefits consumers as insurance premiums continue to climb.
Stephen Hemsley of UnitedHealth Group, David Joyner of CVS Health, Gail Boudreaux of Elevance Health, David Cordani of Cigna and Paul Markovich of Blue Shield of California parent company, Ascendiun, testified before the House Energy and Commerce Committee in the morning and the House Ways and Means Committee in the afternoon.
The hearings come one week after President Donald Trump released a healthcare policy framework calling for direct payments to Americans over extending enhanced ACA subsidies, which expired at the end of 2025. Marketplace enrollment has dropped to 22.8 million for 2026, and millions of enrollees are facing higher premiums after Congress failed to extend the subsidies.
Vertical integration takes center stage
Lawmakers zeroed in on the growth of vertically integrated health conglomerates that own insurance companies, pharmacy benefit managers, physician practices and pharmacies under one umbrella.
UnitedHealth Group, now composed of more than 2,600 subsidiaries, is the nation’s largest insurer, employs or has contractual ties with about 10% of the U.S. physician workforce, owns the largest claims clearinghouse Change Healthcare, and controls 21% of the PBM market through Optum Rx. Cigna’s Evernorth unit houses Express Scripts; Elevance operates Carelon, which includes pharmacy, behavioral health and care delivery businesses; and CVS acquired Aetna in 2018. Even nonprofit Blue Cross Blue Shield plans have begun reorganizing under new corporate structures that allow them to launch for-profit subsidiaries.
“Whether you’re a blue-blooded capitalist or a card-carrying democratic socialist, I think corporate monopolies are a problem, and this vertical integration is destroying people’s ability to access care,” Rep. Alexandria Ocasio-Cortez, D-N.Y., said during the hearing. “100 years ago, we had this type of market concentration in our banks, and we did something about it when it crashed the economy and we passed the Glass-Steagall Act. We should be considering that in our healthcare system.”
Rep. Ocasio-Cortez cited a 2025 FTC report that found the three largest PBMs (CVS Caremark, Express Scripts and Optum Rx) marked up specialty generic drugs for cancer, HIV and other conditions by thousands of percent at their affiliated pharmacies, generating more than $7.3 billion in revenue above estimated drug acquisition costs from 2017 to 2022.
Rep. Lori Trahan, D-Mass., asked Mr. Hemsley where competitive pressure to lower prices comes from when UnitedHealth “owns the insurer, the doctors, the pharmacy benefit managers and the care delivery system end-to-end.”
Mr. Hemsley defended the company’s structure as “a very substantial value dynamic in terms of bringing a better care experience and more value to the healthcare environment in total, by better coordination of care across those spectrums, by better use of data, by more engagement in critical areas in healthcare, including how drugs are made available and integrated into therapies.”
In one of the most pointed exchanges during the second hearing, Rep. Gregory Murphy, R-N.C., MD, also criticized vertical integration and called for breaking up the industry. “If it were up to me, I would throw out all for-profit systems in this country and turn everybody into nonprofit,” he said. “If I had my way, I’d turn all of you guys into dust.”
Energy and Commerce Chair Brett Guthrie, R-Ky., pressed the executives on whether the ACA’s medical loss ratio rules, which require insurers to spend 80% to 85% of premiums on medical care, incentivized vertical integration by not applying the same limits to subsidiary earnings.
Mr. Joyner noted that Aetna “did not perform well in the exchange last year” and Mr. Cordani said Cigna “lost money in the exchange in all but two years since 2014.” Ms. Boudreaux said Elevance’s MLR in 2024 was 88.5% and that the company “did not make money in the individual exchange” in 2025. Mr. Markovich added that Blue Shield of California has capped profits at 2% of revenue for the last 15 years.
Rep. John Joyce, R-Pa., secured commitments from all five CEOs to provide detailed information by the end of February on subsidiary spending that qualifies under MLR requirements, how negotiated rates compare between affiliated and non-affiliated providers, and dispensing fee comparisons between company-owned and independent pharmacies.
Rep. Erin Houchin, R-Ind., also pressed the executives on offshore PBM group purchasing organizations, noting a January Hunterbrook report that found PBM-owned GPOs “generated more than $50 million in revenue per employee.” Mr. Cordani confirmed Cigna’s GPO, Ascent Health, is headquartered in Switzerland.
Rep. Darin LaHood, R-Ill., echoed concerns about vertical integration during the second hearing but acknowledged horizontal consolidation within the industry, as well. “In theory, this consolidation should make it easier to obtain lower prices from providers as your market power increases,” he said.
Claims denial rates disputed
The first hearing grew more contentious when lawmakers challenged Mr. Hemsley on UnitedHealthcare’s claim denial rates.
Rep. Nanette Barragan, D-Calif., cited a KFF analysis of CMS data that showed a 33% in-network denial rate for UnitedHealthcare’s marketplace plans in 2023. Mr. Hemsley disputed the figure, saying “I don’t know the context of what you’re showing me” and estimated the company’s denial rate at “less than 2%,” though he did not specify if he was referring only to marketplace plans.
He added that the company has “been methodically reducing the area of prior authorization and expediting that process.” UnitedHealthcare said last year it has been prioritizing a nearly 10% reduction in prior authorization volume, while Optum Rx eliminated requirements for 180 medications in 2025.
In June, the broader health insurance industry, including UnitedHealth, committed to a series of changes aimed at simplifying and reducing prior authorization requirements across commercial, Medicare Advantage and managed Medicaid plans covering 257 million Americans. Though major insurers have pointed to previous cuts in prior auth volumes in recent years, groups such as the AMA have said “most physicians are not seeing a difference.”
ACA subsidies vs. HSAs
The hearings come amid an ongoing standoff over the future of enhanced ACA subsidies. Some Republicans, including President Trump, have called for eliminating subsidy payments to insurers in favor of sending funds to eligible Americans through health savings account deposits. Under current law, HSA funds can’t be used to pay insurance premiums, and only those enrolled in eligible high-deductible health plans can make contributions.
“Let the money go not to the big fat cats and the insurance companies that made 1,700% over the last short period of time. Let the money go directly to the people where they can buy their own healthcare,” President Trump said in early January.
Rep. Diana DeGette, D-Colo., pushed back on the notion that subsidies are a giveaway to insurers, noting that Aetna reported a $984 million operating loss in 2024 despite enhanced premium subsidies being in place. The insurer also pulled out of the individual marketplace for 2026.
“If premium support is a handout, it surely is not a very good one,” Rep. DeGette said.
Ellen Allen, executive director of West Virginians for Affordable Health Care, testified during the first hearing that she faces more than $25,000 in out-of-pocket healthcare costs this year under her marketplace plan. When Rep. Frank Pallone, D-N.J., asked whether an HSA pre-loaded with $2,000 would help, Ms. Allen replied: “Frankly, that’s insulting. A $2,000 deposit into a health savings account for someone whose premium is $2,000 a month does not go a long way.”
On Jan. 20, Congress unveiled a bipartisan healthcare deal tied to a broader government funding package, which does not include a subsidy extension or HSA deposits.
Mr. Hemsley said UnitedHealthcare would eliminate and rebate all profits from its marketplace plans back to consumers in 2026, though it’s unclear how much that might be because the company does not publicly report its earnings from ACA plans. Mr. Cordani and Ms. Boudreaux said they would not commit to reinvesting any funds because they did not make a profit in their exchange businesses last year.
Separately, Rep. Murphy said, “I don’t want to hear about the fact you’re not taking profits. We know how money gets moved around in these companies. The C-suite executive salary compensation is a slap in the face to the average American who goes bankrupt because they cannot afford healthcare.”
Handling ACA fraud
Rep. Jodey Arrington, R-Texas, said “billions of dollars” have been used to subsidize fraudulent activity with the ACA subsidies.
A December GAO report found weaknesses in marketplace enrollment controls, including more than 58,000 Social Security numbers receiving premium tax credits that matched death records. CMS received more than 90,000 complaints in the first eight months of 2024 from consumers who experienced unauthorized changes to their marketplace plans. Mr. Markovich said Blue Shield of California has “not seen that kind of fraud issue” due to measures like dual-factor authentication implemented through Covered California, but declined to speak to fraud rates nationally.
“Somebody’s not putting the controls in place and paying attention, and we’ve got to change that incentive structure for the sake of the taxpayer,” Rep. Arrington said.
Pharmacy commitments
Rep. Murphy asked each CEO during the second hearing whether they would commit to allowing medications purchased through TrumpRx or Mark Cuban’s Cost Plus Drugs to count toward patient deductibles. Mr. Joyner said “absolutely, if it lowers cost for Americans.” Mr. Cordani said Cigna’s newest pharmacy offering “would accommodate that,” alluding to the company’s previously announced rebate-free pharmacy benefit model.
Ms. Boudreaux said Elevance is “open to figuring out how to make sure” it happens, and Mr. Hemsley did not directly answer. In late 2025, Optum CEO Patrick Conway, MD, said employers could add Cost Plus to their Optum Rx pharmacy networks, which Mark Cuban disputed.
Medicare Advantage spending
Lawmakers and executives also clashed over how Medicare Advantage costs compare to traditional Medicare. Rep. David Schweikert, R-Ariz., cited a 2025 MedPAC report estimating MA costs 120% of fee-for-service, noting the Medicare trust fund is projected to be depleted in six-and-a-half years. Mr. Hemsley disputed the figure, saying UnitedHealth’s data shows MA at “about 91% of fee-for-service.”
Rep. Schweikert proposed having congressional healthcare economists collaborate with insurers’ actuaries to model potential Medicare reforms, saying healthcare has become “financial engineering” rather than care delivery. Mr. Hemsley said UnitedHealth would be “very open and constructive” to such engagement.
