Texas Republicans Invited Me to Testify About Big Insurance

Texas lawmakers are asking whether health insurers are harming patients, employers and physicians.

I was honored earlier this month to testify before the Texas House Select Committee on Health Care Affordability in Austin.

Over the years, I’ve testified before lawmakers in Washington and in state capitols across the country, but this hearing felt particularly significant, as Texas is a state known for its belief in markets, competition and entrepreneurship.

So to hear conservative legislators asking serious questions about whether the health insurance industry’s business practices are harming employers, patients, rural hospitals and physicians was both refreshing and encouraging. It also reinforced something we’ve been talking about frequently on the HEALTH CARE un-covered Show: Scrutiny of the health insurance industry is no longer coming only from the political left or from longtime health reform advocates.

Lawmakers across the ideological spectrum are recognizing that something is deeply broken when coverage keeps getting more expensive while care becomes harder to access. Concerns about prior authorization, rising premiums and the growing power of vertically integrated insurance conglomerates are becoming bipartisan concerns because the consequences are being felt by every kind of community – red and blue alike.

I spent nearly two decades inside the insurance industry (first at Humana and then at Cigna) helping defend these companies to the public and to policymakers. I know how these corporations operate because, for years, I helped explain and justify their decisions. That’s why it meant so much to have the opportunity to speak candidly with lawmakers who are genuinely trying to understand why health coverage keeps getting more expensive while so many Texans feel they’re getting less in return.

One of the central points I made to the committee is that the incentives inside the health insurance business are fundamentally broken. As I told lawmakers:

“This is not how a normal market behaves. And the reason is simple: The incentives inside American health insurance do not reward making the product better. They reward making it worse. A narrower network is cheaper to operate. A denied claim is pure margin. A prior authorization that discourages a patient from getting medically necessary care boosts the insurer’s bottom line. The company that makes its product least useful — within the limits of what regulators and employers will tolerate — wins.”

I also spoke about the enormous toll this system takes on employers and entrepreneurs, which resonated with legislators who represent a broad range of communities in a state built around independent business and economic growth:

“RAND researchers found that American business formation jumps measurably the month a person turns 65 — for one reason: They finally qualify for Medicare and can leave an employer without losing coverage. Health insurance is the chain that keeps Americans in jobs they would otherwise leave to start something of their own. In what we tell ourselves is the world’s most entrepreneurial economy, that is a staggering fact.”

I left Austin encouraged. The lawmakers on this committee come from different political perspectives but they clearly understand that something has gone deeply wrong when employers are struggling to offer coverage, rural hospitals are closing, doctors are drowning in prior authorization paperwork and families are paying more every year for coverage that often feels increasingly restrictive.