President Donald Trump has been channeling public anger over health care costs in recent weeks, pillorying “money sucking” insurers and alleging that “BIG, BAD Insurance Companies” have been “ripping off the public for years.”
Following in his tracks, a Congressional committee scheduled a meeting Thursday to hear testimony from five health insurance executives who will also make easy targets of populist outrage: Their individual compensation packages reach as high as $23 million.
But as politicians target health insurers, even some of the sector’s harshest critics warn that rising premiums stem from deeper problems in the health system. Insurance costs reflect the rising prices charged by hospitals, drugmakers and physicians. Bringing U.S. health care costs under control will require more than attacking insurers, they said.
“Yes, they’re a villain,” said Drew Altman, president and chief executive of KFF, the nonpartisan health policy organization. “Yes, they make people miserable. But that has more to do with them trying to control costs. The insurance companies are in a wrestling match with hospitals and doctor groups every day, and they lose more often than they win.”
As the intermediary between health care providers and the patients they serve, insurers stand between the rising prices charged by health care providers and the patients they insure. The companies deny claims, require prior authorization for some services and issue befuddling bills. The depth of public rage at the industry was exposed in December 2024 after the fatal shooting of a UnitedHealthcare executive on a Manhattan sidewalk. An eruption of online commentary celebrated the alleged killer’s presumed motive: avenging the denial and delay of health coverage.
Some of the largest insurers, moreover, have become health care conglomerates by buying up and developing medical practices and pharmacies — so they are providing care and, at the same time, setting prices for it. One arm of UnitedHealth Group, Optum, boasts of having more than 136,000 doctors and over 2,000 medical sites across the country. This kind of consolidation also has been driving up prices, according to numerous economic studies.
But insurers are only one part of the sprawling U.S. health care industry, which in 2024 constituted about 18 percent of the economy. Of the hundreds of billions in annual earnings derived from U.S. health care, insurers garner roughly 10 percent or less, according to analyses by McKinsey & Co. Some of the largest shares go to pharma and biotech companies, hospitals and medical products.
Over five years, the health expenditures in the United States for hospitals, professional services and prescription drugs have each risen nearly 40 percent or more.
“The public has latched onto the idea that the insurers are the bad guys and they have all the money,” said Eric Ellsworth, director of health policy at Consumers’ Checkbook. “Calling the insurers in to yell at them is the easiest thing to do. But we have to ask: Why is this so expensive to begin with? There are a lot of people in health care making a lot of money.”
After the political debate over Affordable Care Act subsidies erupted into a 43-day government shutdown, the chairs of two House committees said they were summoning five insurance chief executives to testify Thursday “to have a discussion and answer questions about rising costs, the current state of health care affordability, and the role played by large health insurers.”
The chairmen of the committees, Rep. Jason T. Smith (R-Missouri) of Ways and Means and Rep. Brett Guthrie (R-Kentucky) of Energy and Commerce, said they were seeking to call attention to health insurance generally and not just Obamacare, which they characterized as “a failing program utilized by a fraction of the country.”
In releasing his “Great Healthcare Plan” last week, Trump also focused on insurers, saying his plan would “lower insurance premiums” and “hold big insurance companies accountable.” It would require health insurance companies to publish their rates, coverage, percentage of revenues paid out to claims and the proportion of insurance claims they reject. Touted as “comprehensive,” the plan is scarce on details. Trump has said he will be speaking to the insurance executives as well, but the timing of those meetings has not been announced.
Most Americans under age 65 get health care coverage through their employer. Over the past five years, the price of health coverage for an employee’s family has risen 26 percent, to $27,000 annually, according to a KFF survey. The burden of paying for that policy is shared — the employer picks up 75 percent of the cost on average, or $20,000, and the employee pays 25 percent, or $7,000. The burden on employees doesn’t stop there, however. They open their wallets again when they go to a doctor and must pay out of pocket to reach deductible limits, which have been rising as well.
A record-high 23 percent of Americans say the health care system is in crisis and another 47 percent see major problems, according to a Gallup poll in December. But in the fight over health care prices, patients are largely spectators. Negotiations over prices take place behind closed doors, in sometimes contentious talks between insurers and hospitals. In public, they’ve been sparring for decades.
“It’s wrong that many corporate insurers too often deny patients access to medically-necessary care and burn out our clinicians with red tape,” Rick Pollack, the American Hospital Association’s president and CEO, said in a statement for this story. “For years, the American Hospital Association has highlighted the negative impact excessive and unnecessary commercial insurer administrative burden and paperwork — such as prior authorization and complex appeals processes — have had on care for patients.”
Chris Bond, a spokesperson for AHIP, the business group representing health insurers, said that insurers are seeking lower prices.
“Health plans welcome ideas to bring down the unaffordable prices drugmakers charge Americans and to empower consumers to make the best health care decisions for themselves and their families,” he said in a statement.
In recent years, the balance of power in price negotiations has shifted in ways that favor higher hospital prices, according to recent research. Hospitals have consolidated into sprawling health systems, giving them dominant market shares — and the leverage to demand higher prices.
While insurers remain powerful in some markets, research based on more than 40,000 hospital prices suggests hospitals have gained the upper hand. As hospital systems reach levels of market dominance now common in much of the country, insurers’ ability to fight price increases diminishes.
“The substantial increase in hospital [consolidation] over the past decade means that many local hospital markets that used to be relatively competitive have become concentrated over time, and some markets that were already concentrated are moving closer to monopoly,” the authors wrote in a 2025 Health Affairs article. Insurers, they concluded, “may encounter increased challenges in controlling health care spending.”
Making matters worse, insurers in some cases have little incentive to fight price increases, experts said.
“The larger insurers have no effective competition, so they have no need to negotiate aggressively,” said Robert Berenson, an institute fellow in the health policy division of the Urban Institute. “They happily pass on the high providers’ prices in high premiums.”
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