Last week, Congresswoman Carol Miller (R-WV) took part in a Ways and Means Committee hearing focused on the rising costs of healthcare. The session examined how large, vertically integrated healthcare companies—including those that own health insurance carriers, pharmacy benefits managers (PBMs), and medical practices—affect affordability for patients.
During the hearing, Miller highlighted the difficulties rural residents face when seeking medical care. She pointed out a growing gap between insurer profits and the costs of medicine and physician services. Addressing these concerns to industry witnesses, she asked about factors contributing to this disparity.
“Thank you, Mr. Chairman. And thank you all for being here today. I know it has been a long day.
In my home state of West Virginia, distance, provider shortages, and limited hospital capacity already make accessing care a challenge, and affordability is really inseparable from access. Insurance companies frequently cite drug costs as a driver of premium increases, but according to the insurance industry’s own data, brand medicines make up less than 10 cents of every premium dollar.
While hospital consolidation and drug prices do play a role in overall health care costs, I want to focus today on factors within insurers’ control. Analyses show that administrative overhead, insurer profit margins, and PBM-related practices account for a significant share of premium spending. Roughly sixteen cents of every premium dollar goes to profits and administrative costs, making overhead the second-largest category of premium spending. Without profit, you close your doors. I understand that, I own a business. But, this exceeds spending on medicines and physician services.
That being said, Mr. Hemsley, can you walk us through the top insurer-driven drivers of premium growth and explain why patients, especially in rural areas, are paying more while getting less access?” asked Congresswoman Miller.
Mr. Hemsley responded: “Well, again, a very good question, Representative. Thank you for bringing it forward.
As we have said, the input costs, more than 70% of the total cost, actual cost of health care services, have been inflating at a rate of three times the normal, the general inflation rate, for more than 25 years. And that has created a very significant pressure.
Businesses like ours have reduced those cost trends. Those are net of us taking $300 billion of costs out of these increases by better negotiations, by better data, by better coordination. And you still get these significant cost increases.
Those are, by far, the largest factors completely that we can get a better system. And we all have a role to play in it. But it is the cost trends and the compounding impact of these trends being higher than general inflation that is really driving the affordability crisis.”
Miller also raised concerns about high medication prices set by insurers and PBMs—entities often under common ownership—which she argued contribute to increased patient expenses while generating profits for insurers.
“But West Virginians are already stretched thin by rising premiums deductibles and out-of-pocket costs,” she said during her questioning about price variations in drugs such as Imatinib used for leukemia treatment under Medicare coverage: “Data specific to West Virginia shows that the Medicare program is being charged outlandishly different prices for the exact same drug within the same timeframe… These prices are not set by patients or providers but by insurers and their vertically integrated PBMs.”
She continued: “Some would allege that disparities are the result of insurers gaming the Medical Loss Ratio to artificially inflate medical spending allowing profits to flow through affiliated entities while driving up costs for seniors and taxpayers.”
Miller then questioned Mr. Joyner about how such pricing affects West Virginians who depend on these medications: “Mr Joyner what effect do these pricing practices have on West Virginians who rely on these drugs to survive and how do you justify such extreme price variation for the same medication when your company controls benefit design pharmacy networks and reimbursement structure?”
Joyner replied: “Congresswoman this is a very good question… If I look more broadly drug manufacturers… just January 1st this year 500 plus drugs took price increase… represented almost $25 billion added cost customers we serve…
So role we play importance PBM negotiate down actually lower cost folks West Virginia…
So we’re trying do our job creating competition making sure gets passed down not just clients but importance consumer transparency making sure discounts then flow all way through consumer.”
At closing Miller urged witnesses to address why certain kidney disease medications remain uncovered by insurance plans:
“Thank you One final point Many your industry plans do not cover Vafseo Defencath I know them primarily as just kidney drugs but access these medications would dramatically increase quality care as well reduce cost both insurers taxpayers
I don’t want answer now but I do want you all go back talk teams internally find out why these drugs not covered We have lot kidney disease deal with my state When go through obesity diabetes kidney disease need access So please discuss figure out how handle this
Mr Chairman I yield back,” concluded Congresswoman Miller.
Carol Miller has represented West Virginia’s 1st district in Congress since 2019 after serving over ten years in West Virginia’s House of Delegates.
She was born in Columbus Ohio in 1950 graduated from Columbia College South Carolina with a BA lives currently Huntington.
