Insights^

On February 11, 2026, the House Energy and Commerce Health Subcommittee held a hearing to consider how to reduce health care costs by examining the prescription drug supply chain. This hearing was the Subcommittee’s second on health care affordability, and reports indicate there will be additional hearings focusing on other parts of the health care sector. Overall, Republicans and Democrats both agreed that prescription drug costs are too high and that there is too much consolidation in the prescription drug industry, especially among pharmacy benefit managers (PBMs). However, Republicans and Democrats on the Committee also focused on familiar partisan arguments regarding the impact of the Inflation Reduction Act and recent actions by the Trump administration, including TrumpRx, on prescription drug costs. Unsurprisingly, witnesses from different parts of the pharmaceutical industry sought to highlight actions they have taken to reduce costs and to place blame on other stakeholders, including hospitals and insurance companies, as well as on programs such as the 340B program.

OPENING STATEMENTS

• Health Subcommittee Chair Morgan Griffith (R-VA-9)

• Full Committee Ranking Member Frank Pallone (D-NJ-6)

WITNESS TESTIMONY

• Lori M. Reilly, Esq., Chief Operating Officer, PhRMA – Testimony

• John F. Crowley, President and CEO, Biotechnology Innovation Organization – Testimony

• John Murphy, President and CEO, Association for Accessible Medicines – Testimony

• David Marin, President and CEO, Pharmaceutical Care Management Association – Testimony

• Angie Boliver, President and CEO, Healthcare Supply Chain Association – Testimony

• Chester “Chip” Davis, Jr., President and CEO, Healthcare Distribution Alliance – Testimony

• James Gelfand, President and CEO, The ERISA Industry Committee – Testimony

• Douglas Hoey, CEO, National Community Pharmacists Association – Testimony

• Rachel E. Sachs, Professor of Law, Washington University in St. Louis – Testimony

MEMBER DISCUSSION

PBM Consolidation and Vertical Integration

Multiple Health Subcommittee members on both sides of the aisle expressed concerns about reports that the 3 largest PBMs control 80% of the market and about PBMs’ frequent vertical integration. Members expressed skepticism about Mr. David Marin’s arguments that there is competition within the industry and that this competition leads to lower prices for patients. Other witnesses who did not represent PBMs were also highly critical of certain PBM practices. A number of Subcommittee members praised the inclusion of PBM reforms in the recently passed appropriations legislation, but others said more needed to be done.

Medicare Negotiation Vs. Most-Favored Nation Deals and TrumpRx

The biggest partisan divide centered on whether Medicare negotiation, as passed under the Inflation Reduction Act, or the most-favored-nation deals negotiated by the Trump administration and presented on TrumpRx, represented the better way to address concerns about drug costs. Republicans, including Health Subcommittee Chair Morgan Griffith (R-VA-9) and Rep. Michael Rulli (R-OH-6), praised the Trump administration for its efforts to secure lower drug prices for the American people through TrumpRx. Republicans, including full Committee Chair Brett Guthrie (R-KY-2), criticized the Inflation Reduction Act for disrupting the Medicare Part D marketplace.

On the other hand, Democratic members, including full Committee Ranking Member Frank Pallone (D-NJ-6) and Health Subcommittee Ranking Member Diana DeGette (D-CO-1), argued that the deals from the Trump administration lacked transparency. As a result, they argued, there is no way to verify how effective they are at lowering drug costs. These members asked Subcommittee Chair Guthrie if he would be willing to work with them to determine the details of these deals. He said he would as long as that didn’t blow up the deals in question. Democrats such as Rep. Marc Veasey (D-TX-33) criticized TrumpRx for listing drugs that could actually be found for cheaper using manufacturer or other coupons. Democratic members such as Reps. Pallone and Jennifer McClellan (D-VA-4) criticized Republicans for including carve-outs for orphan drugs from the Medicare negotiation program in the reconciliation bill and called for expanding Medicare price negotiation to the commercial market.

Federal Government’s Role in Drug Development and Approval

Members on both sides of the aisle expressed interest in the federal government’s role in drug development and approval. Rep. Dan Crenshaw (R-TX-2) asked Ms. Reilly about efforts to modernize the regulatory framework when it comes to the approval of new therapies. She responded that a transparent regulatory environment and strong IP protections are necessary to support the development of innovative therapies, including gene and cell therapies. On the other side of the aisle, Democratic members questioned witnesses about the impact of reductions in force (RIFs) at the Food and Drug Administration (FDA) and concerns about reports of politicalization within the agency. All of the witnesses who were asked about the impact of RIFs and politicization expressed concerns about the negative impact on drug development and approval. Democratic members such as Reps. Pallone and Kim Schrier (D-WA-8) expressed specific concerns about the FDA not reviewing Moderna’s flu vaccine due to vaccine skepticism. Other Democratic members criticized Republicans for not speaking out about cuts to basic research at agencies such as the National Institutes of Health (NIH). Rep. Guthrie countered that the NIH received a half-billion-dollar increase in the appropriations legislation.

Other Topics

• Rep. Griffith asked Mr. Crowley if they should start looking at insurance companies as fiduciaries and hold them liable for harm they cause to patients. Mr. Crowley agreed that this is a good idea to provide more protection for patients.

• Reps. Gus Bilirakis (R-FL-9) and Kevin Mullin (D-CA-15) asked Mr. Crowley about rare disease drug development. In response to a question from Rep. Bilirakis on how we can continue to encourage investment in finding cures for rare diseases without burdening patients, Mr. Crowley said we need to reduce the complexity of the clinical trial system, modernize the FDA, and ensure medications are affordable and accessible.

• Rep. Troy Balderson (R-OH-12) asked Mr. Hoey to elaborate on specific challenges rural pharmacies face when negotiating with PBMs, specifically with take-it-or-leave-it contracts for reimbursements. Mr. Hoey explained that PBMs hold all the leverage, forcing pharmacies to accept contracts that pay them less than it costs to acquire the drug; as a result, 5,000 pharmacies have closed in the last 4 years.

• Rep. Cliff Bentz (R-OR-2) asked Ms. Sachs how AI might help analyze the pharmaceutical space. She noted the FDA’s approval of AI-enabled medical devices and the use of AI to streamline clinical trial enrollment. She also suggested using AI to help the subcommittee look through and summarize the vast amounts of information in the pharmaceutical space. She also warned of an AI arms race between providers and insurers that could deny care through prior authorization.

• Rep. Rick Allen (R-GA-12) asked Mr. Gelfand if his proposed bill, H.R.5509, the Safe Step Act, would help hold insurers accountable for increasing the use of step therapy, leading to nonadherence and access issues. Mr. Gelfand explained that reforming step therapy makes sense and that it should be electronic, timely, and aligned with medical management.

On February 3, 2026, the House Energy and Commerce Oversight Subcommittee held a hearing to examine fraud in the Medicare and Medicaid systems. There was strong bipartisan agreement that fraudulent actions need to be addressed, however, Republicans and Democrats shared different views on best practices for preventing and investigating potentially fraudulent activity.

OPENING STATEMENTS

• Subcommittee Chairman John Joyce (R-PA-13)

• Subcommittee Ranking Member Yvette Clarke (D-NY-9)

• Full Committee Chairman Brett Guthrie (R-KY-2)

• Full Committee Ranking Member Frank Pallone (D-NJ-6)

WITNESS TESTIMONY

• Jessica Gay, CPC, AHFI, CFE, Vice President and Co-Founder, Integrity Advantage – Testimony

• Kaye Lynn Wootton, JD, President, National Association of State Medicaid Fraud Control Units – Testimony

• Stephan W. Nuckolls, Chief Executive Officer, Coastal Carolina Health Care, PA and Treasurer and former Board Chair, National Association of Accountable Care Organizations (NAACOs) – Testimony

• Jessica Tillipman, JD, Government Contracts Advisory Council Distinguished Professorial Lecturer in Government Contracts Law, Practice and Policy, George Washington University Law School – Testimony

MEMBER DISCUSSION

How Fraud Occurs

Rep. Russ Fulcher (R-ID-1) questioned if some states are targeted due to lower barriers of entry for fraudulent programs. Ms. Gay shared that in her experience, there are common states where fraud begins but will often spread to other states. Ms. Wootton shared that fraud schemes are evolving by crossing state lines, which used to be more uncommon, and the increased use of electronic health records make it easier to forge documentation.

Rep. Dianna DeGette (D-CO-1) asked for clarity on whether fraud is more commonly carried out by providers or beneficiaries. Ms. Wootton responded that far more providers commit fraud.

Rep. Paul Tonko (D-NY-20) asked if there is a difference between improper payments and fraud. Ms. Tillipman shared that often, improper payments are not fraud and that 77% are administrative errors. Rep. Tonko questioned if there were harms in labeling all improper payments as fraud to which Ms. Tillipman responded that it can make fraud investigations more difficult as well as diminish taxpayer faith in government.

Rep. Dan Crenshaw (R-TX-12) was curious if there were specific reasons why Medicare and Medicaid programs seem to be much more vulnerable to fraud than private programs. Ms. Gay shared that the national scope of Medicare and Medicaid make it much more appealing to target and the lack of an Explanation of Benefits provided to beneficiaries makes it easier to create fraudulent bills.

Rep. Diana Harshbarger (R-TN-1) questioned if expanded telehealth services could aid in fraud. Ms. Gay responded that reduced barriers to care and the ability for providers to cross state lines make it easier for fraudulent activity.

Fraud Investigations

Rep. Fulcher asked Ms. Wootton if fraud investigations were different for foreign actors than citizens, which Ms. Wootton denied.

Rep. Gary Palmer (R-AL-6) questioned if state auditors should have greater access to data to best investigate fraud allegations. Ms. Wootton shared that investigators need to see as much data as possible to produce a complete investigation, however, she is often limited to Medicare and Medicaid data and would like to find a way to also be able to access 3rd party and private payer data.

Rep. Troy Balderson (R-OH-12) wondered how long the average investigation lasts, which Ms. Gay shared was about a year, due to needing time to collect data to build the case as well as give an appeal time frame. The investigation is then shared with law enforcement. Rep. Balderson asked Ms. Wootton if investigators can recover fraudulent payments. Ms. Wootton responded that the payments are often either already spent or hard to track, which makes them difficult to recover. Rep. Balderson was interested in the impact of AI on fraud schemes and investigations, so Ms. Wootton shared that fraud control units are receiving training on how to identify AI modified data.

Rep. Kevin Mullin (D-CA-15) shared concerns about collaborating across government sectors and asked if investigations had better outcomes when local, state, and federal agencies were all involved. Ms. Wootton shared that, in her experience, states do not have the ability to cross borders which makes federal collaboration vital. Rep. Mullin asked if completely freezing government funding to suspected fraudulent programs is helpful to the investigation. Ms. Tellipman answered that blanket freezing does not improve the investigation and will harm individuals receiving proper services.

Impact of Fraud

Rep. Rick Allen (R-GA-12) requested that Mr. Nuckoll expand on the impact of fraud on the ability for Accountable Care Organizations (ACOs) to provide care to seniors. Mr. Nuckolls explained that ACOs share costs with the federal government and when spending for the plan is greater than the budget, the ACO must repay Medicare the difference. With increased fraud claims, ACOs often need to repay Medicare more which will force ACOs to leave the care space if they cannot afford the increased costs. Rep. Allen followed up by asking what the impact will be for beneficiaries, which Ms. Wootton responded that many will not be able to receive services without jumping through hoops.

Rep. Crenshaw asked Ms. Gay to elaborate on the impact to beneficiaries when fraud is not controlled. Ms. Gay shared that in her experience, it increases the chance that beneficiaries do not receive the care that they need, either through complete denial or subpar treatment. Another experience that Ms. Gay has seen is documentation of conditions in a beneficiaries’ chart without a proper diagnosis, which can impact access to care further down the road.

Ranking Member Pallone questioned if there was risk to programs and program participants when fraud is overstated or action taken preemptively. Ms. Tillipman explained that if fraud is overstated, it can make it more difficult to direct limited resources to the proper investigations which can make it more difficult to address true fraudulent activity.

Rep. Buddy Carter (R-GA-1) asked if artificially reducing payment rates for common fraudulent services, such as skin substitutes, would impact access to care for patients. Mr. Nuckolls responded that yes, patients will not receive skin substitutes as providers will not be able to afford the cost without proper reimbursement.

Preventing Fraud

Rep. Kim Schrier (D-WA-8) asked if proper enforcement is a strong deterrent for potential fraud schemes, with which Ms. Tillipman agreed.

Reps. Schrier and Lizzie Fletcher (D-TX-7) wanted recommendations for fraud prevention. Ms. Tillipman suggested the Committee look to the currently unimplemented recommendations from the Government Accountability Office and the Inspector General.

Rep. DeGette shared her concerns that the Department of Health and Human Services (HHS) has reduced their number of Inspector Generals by 18, or 10%. Rep. DeGette asked Ms. Wootton if this would have an impact on fraud prevention and investigation. Ms. Wootton responded that HHS is most effective when completely staffed.

On January 29, 2026, the Medicaid and CHIP Payment and Access Commission (MACPAC) met for its January meeting. The Commissioners heard a presentation from MACPAC staff on considerations for implementing community engagement requirements passed in the 2025 reconciliation legislation, before discussing the draft principles and policy recommendation to be included in their June report to Congress. The Commissioners were supportive of the draft principles but had suggestions for improving the draft policy recommendation.

The session began with MACPAC staff providing an overview of the community engagement requirements. MACPAC staff presented 4 draft principles from research with stakeholders: The Centers for Medicare and Medicaid Services (CMS) should provide timely federal guidance and technical assistance to states, CMS and states should ensure that eligible individuals can gain and maintain coverage, CMS and states should prioritize efficiency when procuring, updating, and operating state information technology (IT) systems, and CMS and states should use timely monitoring and evaluation data to inform policy and operations. MACPAC staff then presented a policy recommendation on monitoring and evaluating community engagement requirements in Medicaid, which reads “The Secretary of the U.S. Department of Health and Human Services (HHS) should direct the CMS to develop a transparent plan for monitoring and evaluating community engagement requirements in Medicaid that provides insight into how such policies affect eligibility and enrollment, health status, employment, and the attainment of other identified policy goals. CMS should identify new metrics for state reporting, as needed, and build upon existing data collection activities to minimize administrative burden. Additionally, CMS should ensure the timely publication of monitoring and evaluation results to inform policy and operational decision making.”

All Commissioners agreed with the presented principles, feeling that they properly addressed implementation concerns. For the first principle, one Commissioner suggested adding an implementation readiness checklist developed by CMS to assist states in their internal evaluation of readiness by the end of 2026.

Commissioners raised more concerns about the policy recommendation. A couple of Commissioners felt MACPAC should recommend statutory changes for monitoring and evaluation instead of the proposed recommendation for HHS to direct CMS. Multiple Commissioners expressed support for including language about assessing the costs and benefits of implementation on the Medicaid population. Some possible measures raised include time spent on requirement appeals, time spent uninsured, and the rate of increased work experiences. In response, a few Commissioners pointed out that while these measures are helpful data points, collection may be difficult as CMS does not currently have a way to measure them. Some Commissioners requested that more specific language than “health status” be included in the policy recommendation, feeling that it was too broad a category. MACPAC staff requested that Commissioners share their thoughts on what specifics to include.

A few other suggestions were raised by Commissioners. One Commissioner wanted more language encouraging automated processes to help beneficiaries demonstrate community engagement and to evaluate alternatives to wet signature requirements on paperwork, due to concerns that they create an undue burden. Another Commissioner suggested that CMS solicit a request for proposals (RFP) for research and evaluation of the impacts of community engagement requirements. Lastly, a Commissioner indicated a need to better understand the beneficiary population that will still receive benefits, citing concerns that they will be higher risk and have greater health needs, which might result in the policy not producing the expected cost savings.

On January 22, 2026, the House Energy and Commerce Health Subcommittee and the House Ways and Means Committee held hearings to investigate commercial health insurance costs. There was bipartisan agreement in both hearings that U.S. health care spending is high and that the rate of return for the American people is far short than what it should be. The insurance companies CEOs tended to agree but also cited growing health care demand and the rising cost of health care services as reasons for increased health insurance costs. There were also concerns raised by members on both sides of the aisle about consolidation and integration as well as concerns about improper denials of care. However, members on both Committees divided along familiar lines about the impact of the Affordable Care Act (ACA) and the enhanced advance premium tax credits (APTCs) on health care affordability. The leadership of both Committees have said today’s hearings are just the first step into looking into concerns about rising health care costs.

OPENING STATEMENTS

• House Energy and Commerce Health Subcommittee Chairman Morgan Griffith (R-VA-09)
• House Energy and Commerce Health Subcommittee Ranking Member Diana DeGette (D-CO-01)
• House Energy and Commerce Chairman Brett Guthrie (R-KY-02)
• House Energy and Commerce Ranking Member Frank Pallone (D-NJ-06)
• House Ways and Means Committee Chairman Jason Smith (R-MO-8)
• House Ways and Means Committee Ranking Member Richard Neal (D-MA-1)

WITNESS TESTIMONY

• Mr. Stephen Hemsley, CEO, UnitedHealth Group – Testimony
• Mr. David Joyner, Chairman and CEO, CVS Health – Testimony
• Ms. Gail Boudreaux, President and CEO, Elevance Health – Testimony
• Mr. David Cordani, President, CEO, and Chairman of the Board, The Cigna Group – Testimony
• Mr. Paul Markovich, President and CEO, Ascendiun – Testimony
• Ms. Ellen Allen, Executive Director, West Virginians for Affordable Health Care (Energy and Commerce Health Subcommittee Witness) – Testimony
• Ms. ReShonda Young, Resident of Waterloo, IA, and Owner, TnK Health and Nutrition (Ways and Means Committee Witness) – Testimony

MEMBER DISCUSSION

ACA and Enhanced APTCs

Republicans argued that the ACA did not make health care more affordable and that APTCs papered over the rising cost of health care and have driven fraud and improper enrollment in the marketplace. Democrats countered that the ACA, while not perfect, has helped millions get health insurance coverage and accused Republicans of using the hearing to distract from the fact that they allowed the enhanced APTCs to expire. Regarding fraud, Rep. Lloyd Doggett (D-TX-35) criticized Republicans who have cited a Government Accountability Office (GAO) report on the risk of fraud associated with the enhanced APTCs, saying that fraud was committed by insurance brokers, not enrollees. Rep. Adrian Smith (R-NE-03) later noted that both fraud and improper enrollment associated with enhanced APTCs need to be dealt with.

Vertical Integration and Consolidation

One of the most common topics brought up by the committee members was consolidation and vertical integration. Rep. Diana Harshbarger (R-TN-01) raised concerns about companies steering patients to their own clinics to increase profits, but Mr. Hemsley and Mr. Joyner both shared that their companies see integration as a way to provide better value and consumer experience while addressing the challenges of health care fragmentation. Rep. John Joyce (R-PA-13) asked the panelists if highly consolidated markets make it harder to contract competitive rates with insurance companies, which all panelists agreed. Rep. Lori Trahan (D-MA-03) questioned why consumers should believe that consolidation lowers costs, to which none of the panelists had an answer. Rep. Trahan continued, sharing that research has shown that consolidation raises prices.

During the House Ways and Means hearing, Chairman Jason Smith (R-MO-8) kicked off his questioning by asking insurance company CEOs to raise their hands in response to questions about employing providers, owning pharmacies, and owning pharmacy benefit managers (PBMs). When many of them raised their hands, Chairman Smith noted his concerns about how integration and consolidation have not led to reduced premiums. Other members of the Committee, on both sides of the aisle expressed similar concerns.

HSAs

Energy and Commerce Committee Ranking Member Pallone (D-NJ-6) asked Ms. Allen if a health savings account (HSAs) containing a few thousand dollars would be more helpful than an extension of APTCs. Ms. Allen replied that a few thousand dollars would only amount to 1 month of premiums, making it much less helpful for affordability. Rep. Lizzie Fletcher (D-TX-07) asked the panel if HSAs could be used to pay premiums, to which all panelists responded no. Rep. Kat Cammack (R-FL-03) suggested passing legislation to allow premiums to be paid with HSA funds. Rep. Cliff Bentz (R-OR-02) highlighted that HSAs would allow patients to earn interest on the money instead of health insurance companies earning interest on premium subsidies.

Pharmaceutical Industry and PBMs

Multiple members raised concerns about the pharmaceutical industry and the need for PBM reform. Rep. Erin Houchin (R-IN-09) wanted the panel to clarify how PBMs and group purchasing organizations (GPOs) can be so profitable if they claim to pass savings onto patients, but no panelist answered. Rep. Mariannette Miller-Meeks (R-IA-01) was interested in why many GPOs are headquartered internationally and suggested the committee look at future legislation to address it. Rep. Jake Auchincloss (D-MA-04) questioned the reasoning for UnitedHealth Group to have both a PBM and a GPO but Mr. Hemsley did not provide a clear answer. Rep. Auchincloss requested that the committee investigate how PBMs and GPOs function.

Prior Authorization and Claim Denial

Many committee members questioned the high rates of claim denials for UnitedHealth Group. Rep. Debbie Dingell (D-MI-06) and Rep. Nanette Diaz Barragan (D-CA-44) requested that Mr. Hemsley explain why analysis indicates that UnitedHealth Group denies 33% of claims, which is the highest rate in the United States. Mr. Hemsley responded that internal reports indicated only 2% of claims are denied. Rep. Kim Schrier (D-WA-08) asked why Medicare Advantage plans will often deny or delay paying claims for services already rendered that have been deemed necessary by medical professionals. Mr. Hemsley stated that patients should receive care that medical professionals feel is appropriate. Rep. Robin Kelly (D-IL-02) was interested in knowing if UnitedHealth Group uses AI to deny claims, but Mr. Hemsley assured the members that AI is only used for administrative purposes such as gathering documents.

During the Ways and Means Committee hearing, members on both sides of the aisle also brought up concerns about improper prior authorization. Members such as Reps. Mike Thompson (D-CA-4) and Greg Murphy (R-NC) expressed frustrations about patients being improperly denied care. Rep. Murphy even went so far as to say that if he had his way he would make all of them nonprofit because in his view, insurance companies put made profit over patients. Rep. Thompson asked a similar question about the use of AI for prior authorization as Rep. Robin Kelly did during the Energy and Commerce hearing and got similar answers. He said something needed to be done, because all he hears from doctors in is district is about improper denials. Rep. Mike Kelly (R-PA-16) mentioned his Improving Seniors’ Timely Access to Care Act. Rep. Linda Sánchez (D-CA-38) said she believes insurers should be penalized for denials if they are overturned. Rep. Jimmy Panetta (D-CA-19) asked if the insurance CEOs would support legislation such as his Requiring Enhanced and Accurate Lists (REAL) Health Providers Act, which would require insurance companies to update their network directories annually. The CEOs all said they are committed to working on the issue of network accuracy. Approaching things from a different angle, Rep. Terri Sewell (D-AL-7) expressed concerns about the impact of claims denials on rural providers.

Other Medicare Advantage Concerns

During the Ways and Means Committee hearing, members on both sides of the aisle also brought up other concerns related to Medicare Advantage beyond just improper denials. Rep. Doggett brought up his concerns that insurance companies are getting paid for providing care to Veterans on Medicare Advantage plans when the Department of Veterans Affairs (VA) already pays for that care. Rep. Doggett mentioned legislation to address that, and Rep. Thompson also expressed support for that bill. Rep. David Schweikert (R-AZ-1) expressed concerns about the Medicare Payment Advisory Committee (MedPAC) findings that Medicare Advantage costs more than traditional Medicare, and he asked the CEOs about how to get Medicare Advantage back to being a system that would incentivize better outcomes and lower costs. Mr. Hemsley took issue with MedPAC’s estimates but said he would be happy to work to improve Medicare Advantage.

Health Affordability Improvements

When asked by Rep. John James (R-MI-10) if they felt health care is affordable, none of the panelists agreed. Rep. Nick Langworthy (R-NY-23) asked what steps each company was taking to lower premiums for their members. Mr. Hemsley shared that UnitedHealth Group is focused on managing costs, providing better care coordination, and using a value-based care reimbursement model. Mr. Joyner said that CVS remains committed to improving the health status of population they serve, which they do through prevention, access to low-cost therapies and reimbursing on an outcomes-based model. Ms. Bourdeaux shared that Elevance Health is improving their prior authorization process to reduce complexity, is committed to reducing fraud, waste, and abuse, and is reimbursing for value and outcomes.

Other Topics

• Rep. Vern Buchanan (R-FL-16) expressed his support for preventive health care (including the need to ensure access to healthy food).

• Rep. Doggett asked the Committee’s leadership to ask Centers for Medicare and Medicaid Services (CMS) Administrator Dr. Oz to testify about the Trump administration’s decision to reinstate certain insurance brokers who had committed fraudulent activity.

• Several members, on both sides of the aisle, expressed concerns that insurance company stocks and executive compensation have risen, even though access to affordable care and health care outcomes have not improved.

• Rep. Murphy expressed frustration that in his view, insurers are fraudulently keeping money that should be due to providers under the No Surprises Act.

• Reps. Judy Chu (D-CA-32) and Brad Schneider (D-IL-10) expressed concerns about the impact of decisions by Health and Human Services (HHS) about vaccine recommendations for children on vaccine access. All the insurance company CEOs said they were not planning on making changes to their coverage policies for vaccines.

• Several members of Congress expressed concerns about the impact of health insurance costs on rural communities. In response to a question from Rep. Michelle Fischbach (R-MN-7), Mr. Hemsley said challenges in access to care in rural communities lead to higher insurance costs.

On January 16, 2026, the Medicare Payment Advisory Commission (MedPAC) met to see presentations and discuss findings on the Medicare Advantage (MA) program and Dual-Eligible Special-Needs Plans (D-SNPs). The information from the presentations and discussion will be included in the March 2026 report to Congress.

THE MA PROGRAM: STATUS REPORT

MedPAC staff offered a comprehensive overview of the MA program. MedPAC staff shared that in 2025, MA plans enrolled 55% of eligible beneficiaries, with the beneficiaries having an average of 42 plans to choose from. They also predicted that MA rebates will reach a historic high in 2026, which they said could help in reducing cost sharing as well as providing beneficiaries supplemental benefits such as dental and vision services. MedPAC staff also noted that MA spending has been greater than traditional Medicare Fee-for-Service (FFS) spending, which may be attributed to upcoding. They also noted that the new V28 reduced coding-intensity model appears to help control MA costs while maintaining stable supplemental benefits and MA plan availability. It is expected that the V28 model will continue to reduce MA coding intensity effects in coming years.

The Chair opened Commissioner discussion by sharing that he thinks about MA plans as an indirect way to provide access to care. He differentiated this from more direct ways MedPAC examines, such as hospital payments and the post-acute care space.

Multiple Commissioners were interested in the excess administrative expenses expected with MA plans, seeking clarification on how administrative costs are accounted for in the medical-loss ratio and how savings can be passed on to beneficiaries.

There was also interest in the V28 service model due to its relative newness. MedPAC staff clarified that there are plans to compare the effects of the V24 model to the V28 model to see if there are code discrepancies between the models and that the V28 model uses Medicare FFS data to periodically update the model calibration. Some Commissioners raised concerns that the model is affecting MA plans that have not been found to be upcoding and wondered if there was a way to make plan-specific adjustments in those cases. MedPAC staff shared that such changes would need to be a change in policy, not just a change in the data model.

One Commissioner requested that in the future MedPAC take a closer look at other Medicare populations such as those with permanent disabilities, as much of the previous and current work focuses on the older adult population.

There were also broad concerns from the Commissioners about the profit margin of MA plans, especially when compounded with concerns about MA plans having a much higher spending amount per beneficiary than those enrolled in Medicare FFS. It was suggested that future work could provide a clear breakdown of how money flows through MA plans, as well as taking a closer look at the star rating system which some Commissioners believe is helping to accelerate payment rates. Receiving clearer data from reliable sources was highlighted as a need from staff and Commissioners. It was also suggested that the use of supplemental benefits and clear beneficiary-level data could be helpful to the Commission. Another thought was that the Commission needs to understand how supplemental benefits are used to market MA plans and how beneficiaries shop for plans.

The Commissioners shared a wide variety of ideas about how to transform the MA space to work better for beneficiaries. These included flexible spending accounts to allow supplemental benefits to be purchased directly, going back to encounter-based coding, revisiting out-of-pocket maximum policies to contain costs, and reconsidering whether the quality payment system should be budget-neutral. Another suggestion made was to streamline the plan choices and create better materials to explain the differences between types of care plans.

Overall, the Commissioners shared the sentiment that MA plans are somewhat overfunded, and that program changes are needed to ensure quality care is still delivered while costs are contained.

MANDATED REPORT: D-SNPS

MedPAC staff began the session with an overview of D-SNPs, sharing that nearly half of dually eligible beneficiaries are enrolled and use has tripled over the last decade. MedPAC staff shared how each type of D-SNP plan had various results on Healthcare Effectiveness Data and Information Set (HEDIS) quality measures, which can make it difficult to directly compare across plan types. It was also noted that look-alike plans offer an alternative to D-SNPs and Chronic Condition Special-Needs plans (C-SNPs) are becoming more popular in the market.

The Commissioners questioned how integration for D-SNPs can be best measured, but MedPAC staff shared that the plan providers are very aware of the quality incentives that relate to higher payments and will focus their efforts on those measures, which can make it difficult. One Commissioner shared that they were not surprised that there is no correlation between increased integration and broad quality measures, stating that integration is not the only or strongest way to create value for challenged populations.

Multiple Commissioners had questions about D-SNP marketability to beneficiaries and would like to see some qualitative data from plans and beneficiaries in the future. MedPAC staff shared that current reports indicate that care coordination benefits are hard to explain to beneficiaries so many beneficiaries still make their plan decisions on supplemental benefit access.

There was conversation about the ability to join C-SNPs in the middle of the year which MedPAC staff clarified was not a new policy. MedPAC staff also explained that the rationale is that they are specific, specialized plans for those with health needs and the policy is in place to provide beneficiaries access to specialized plans for those with health needs as soon as possible.

There was also worry that these plans help with the cherry-picking of beneficiaries, leaving other plans with lower patient populations resulting in fewer plan offerings.

The discussion ended with the Commissioners agreeing that the wide variety of plan options can make the process of picking one difficult to navigate, and some streamlining would be helpful. However, it was also agreed that this must be balanced with providing a variety of plan specifications so each beneficiary can find one that best suits their needs.