UnitedHealth Group CEO Stephen Hemsley said that the insurance giant will rebate profits from its Affordable Care Act plans back to customers.
Hemsley revealed the company's plans in prepared testimony (PDF) for a hearing before the House Energy & Commerce Committee's Health Subcommittee on Thursday morning. He is one of several leaders at large health plans set to discuss the affordability of healthcare and health insurance.
The news also comes just days after the ACA's open enrollment period came to a close with no agreement from legislators on what to do about the expired enhanced subsidies, which is set to drive up premiums for many individuals with ACA coverage.
In the written testimony, Hemsley acknowledged that insurers share part of the blame for the rising cost of healthcare.
"Like all of you, we are dissatisfied with the status quo in healthcare," Hemsley said. "We share responsibility for the way things are today, and we are determined to make the system work much better, using our capabilities, expertise and ingenuity to improve it, not only for the people and communities that we serve, but for all Americans."
The testimony didn't provide details on UnitedHealth's rebate plan or what the financial impacts may be. A spokesperson told Bloomberg that it is working with Congress as well as the Trump administration on the specifics.
As of Jan. 1, UnitedHealthcare offers plans on the exchanges in 30 states, and it expanded its service area in 11 of those regions. Hemsley said in his remarks that the company has about 1 million members across its ACA plans.
UnitedHealth scaled back its reach on the exchanges significantly in 2016 after the troubled rollout of the marketplace led to massive losses for many health insurers. It began to scale up its footprint again in 2020 after the market stabilized.
"Though UnitedHealthcare is a relatively small participant in the individual ACA market, we will voluntarily eliminate and rebate our profits this year for these coverages, as Congress continues to work toward more long-term solutions," Hemsley said.
Health insurers have been under fire from the White House and leading Republicans in the wake of the expiration of enhanced subsidies, as they paint the tax credits as a gift to the insurance industry. President Donald Trump revealed his own "Great Healthcare Plan" last week, which targets payers as profiting on the back of patients.
Hemsley will be joined at the hearing by the leaders of other major health plans: David Joyner, CEO of CVS Health; Gail Boudreaux, CEO of Elevance Health; David Cordani, CEO of the Cigna Group; and Paul Markovich, CEO of Ascendiun, the recently-established corporate parent for Blue Shield of California.
In addition to the voluntary move to rebate profits on its ACA plans, Hemsley offered additional recommendations around policies that could support the exchanges moving forward. Allowing premium tax credits to apply to catastrophic plans would offer greater choice, especially for younger individuals comfortable with skimpier coverage in exchange for lower premiums, Hemsley said.
He added that policymakers should also consider standardizing ACA broker compensation, as that creates incentives to steer patients toward plans that pay higher commissions. Standardization is the norm in Medicare Advantage, by comparison, he said.
"Standardizing compensation would better align broker incentives with consumer interests, promote more objective plan selection and help consumers choose coverage based on value, affordability and access to care rather than commission differentials," Hemsley said.
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