This meeting is being recorded and summarized.

Good morning, everyone.

I am Jewel Williams Johnson, Chair of the Board of Legislative's Committee on Health.

Today is April 22nd, and I'm calling this meeting to order officially at 1107 a.m.

Today's meeting concerns an issue that is straining families, senior citizens, and working people every single day.

And that is the rising cost of health care.

Even for people with insurance, care is becoming harder to afford.

Patients often do not know what care will cost in advance.

Many face high deductibles and large out-of-pocket expenses.

Others are being pushed into less comprehensive coverage or out of coverage altogether.

And that means delayed care, foregone care, and deeper financial strain.

At the same time, broader market forces are driving costs up.

Hospital consolidation can add to facility fees, to routine visits, new treatments offer promise but often come with very high price tags.

And intermarry intermediary players in the system, including building services and pharmacy benefit managers can add costs without always delivering clear value to patients.

The accompanying opinion piece that we have in today's packet also raises concerns about whether programs like uh 340B, which were created to help vulnerable communities, may in some cases now be contributing to consolidation and higher costs.

Whether one agrees with every conclusion or not, it underscores the need for serious scrutiny.

We are very fortunate today to be joined by Dr.

Jack Holley, whose expertise will help us better understand the drivers of these rising costs and the reforms that may help address them.

Dr.

Holy is the uh we is a research professor emeritus at Georgetown University's McCourt School of Public Policy.

He's worked with um uh HHS and other uh very uh highly regarded entities, and again we are very fortunate to have him with us today.

Welcome, Dr.

Holby.

Thank you.

I appreciate the chance to be here.

Uh I'm gonna share my screen so I can.

There we go.

So yeah, today I think you've set me up with a nice introduction.

I appreciate that.

Um, and I'm gonna really talk about the um issues of spending and some of the reasons that spending is is growing in an unchecked manner, and and talk a little bit at the end about some of the potential solutions.

Um just my slides to advance.

There we go.

So employer sponsored insurance is really the backbone of the U.S.

health system.

It's the source of coverage for 60% of the non-elderly population.

Uh, of course, many people are also in Medicare, those who are older, and many of people under 65 uh get coverage from Medicaid if they're low income.

But those numbers are all smaller than the group that's uh enrolled in employer sponsored insurance.

We know that that three-quarters of adult workers have access to employer-sponsored service uh sponsored insurance at their job.

Three-quarters of those who are eligible enroll in that coverage.

Others get coverage as dependents for other family members and things like that.

But premiums for this coverage have really grown steadily for a long time, and this shows a stretch of years for about 25 years, and you just see the general increase in premiums that are represented.

Family coverage is the higher bar, uh, higher line, and single coverage is the lower line, but both have gone up steadily, and this is putting pressure on people as the chair mentioned at the beginning.

So we really ask can we continue to afford this kind of insurance?

The average employer plan in 2025 for employee only single coverage was about $9,000, and for family coverage, almost $27,000.

And as you see on that bar on the on the middle of this slide, that $27,000 is made up of the worker's contribution, the part that the worker is paying in premiums out of pocket, which is about $7,000 a year, and the employer contribution, which is about $20,000 a year.

And of course, that employer contribution also affects the ability of employers to pay wages.

And so in the end, as economists would tell us, uh the worker is really you know paying the tab on both sides of that.

It's directly through their own premiums, but indirectly through the effect on wages and general costs.

We also know that premiums have risen.

I showed you the long-term trend, but just looking at 2025, the premium increase was 6%.

That's quite a bit higher than either the overall inflation rate of 3% or workers' earnings going up about 4%.

And so, you know, that those are things that are just continuing to make employer-sponsored insurance more expensive.

And it's not just the premiums, it's also the out-of-pocket costs that you face as you receive health care.

So the average deductible for single coverage is nearly $2,000.

Uh almost all covered workers face a deductible, and a similar significant share of them, one third, and even more at smaller firms, are in plans with an annual deductible of at least $2,000 for single coverage.

Of course, family deductibles are even higher.

And as you know, the deductibles are how much you've got to pay out of pocket before the insurance starts to kick in.

Now there may be exceptions for certain kinds of preventive care where the deductible doesn't apply, but this is a big part of what it's going to cost you to get your care.

And 51% of large employers said they expected to make design changes to their insurance plans.

It would actually increase the costs faced by employees in 2025.