'Does That Encourage Competition?': Guthrie Grills UnitedHealth Group CEO Over Vertical Integration

One more set of questions. I now recognize the chairman of the full committee from Kentucky, Mr. Guthrie.

Thank you, Mr. Chairman. Thank you everybody for being here today. I want to start with experts including the Congressional Budget Office estimating that the expiration of the temporary Obamacare enhanced cost-sharing reduction credit is projected to increase premiums by anywhere from 4% to 8% depending on the market. Yet in many areas for 2026, insurers requested and were approved for premium increases of 30%, 40%, even 50%. So, Miss Bedro, you're in Kentucky. In the average Elevance Obamacare plan, premiums increased by roughly 24%. To spotlight, Democrats would have the American people believe the temporary COVID credit does little to actually lower underlying Obamacare premiums and the American taxpayers are footing the bill. So, Mr. Bedro, by your best estimation, even if the Democrats' temporary cost-sharing credits were extended, would Obamacare plan bids in my state of Kentucky increase or decrease between 2026 and 2025?

Well, thank you very much for the question, Congressman. You know, as we've shared, premiums reflect the underlying costs.

So, they would have increased, right? I've only got five minutes. I'm sorry. So, they would have increased regardless of the extended credits. Correct. The credits will give consumers relief, but they still increase, but the overall costs are still driven by underlying root causes.

Well, let's talk about the overall cost. So, I want to... Obamacare costs are skyrocketing, the American people are holding the bag, but unfortunately, because the incentives have been so warped by the Democrats' policies, these affordability challenges are not just happening in Obamacare, but across all of health care markets. And so I want to focus on a particular incentive and I would like to quickly go through a few questions for each of the CEOs and I really need a quick yes or no question. And does the medical loss ratio or MLR put in place by Obamacare, does it cap the dollars that you can maintain at a percentage of the total amount of the premium payments your companies receive? Does MLR cap what you can maintain based on the premium? Is that yes for everyone? It does. I mean, is it true that if the amount of your premiums go up, then the amount of dollars you can maintain, including profits, would actually increase? Yes or no? Yes, it would go up. So, and as premiums increase, when your company's input costs like hospital reimbursements, provider payments, and drug costs increase. So, the MLR policy also requires you to spend a set percentage of premiums on medical services. So under the requirements of the MLR policy, the less that your companies contain the cost of health care, then the more your premiums increase and that results in increase in your total profit potential. So then the Obamacare MLR policy effectively it's an incentive for your premiums to be higher because you're penalized when you try to curtail health costs. Is that true? Yes or no? Start with Mr. Hemsley and move down.

So I can... I know I got brief time so we can let each one answer please. I'm sorry.

Mr. Chairman, in our specific example, we did not perform well in the exchange last year. So cost actually exceeded the premiums we collected. So regardless of the MLR, we underperformed and actually gave back money to the government.

Okay. So Mr. Bordau,

The MLR, we're in a highly regulated environment. We have to, as you know, at least 80% of premiums, the majority go to medical costs. Our loss ratio in '24 was 88.5% and in 2025, we did not make money in the individual.

Mr. as well.

Mr. Chairman, we lost money in the exchange all but two years since 2014. So that phenomenon has not affected us favorably.

Mr. Marovit,

We've capped our profit at 2% for the last 15 years. So this doesn't matter.

So when you get the... you have an insurance business and you get limited on what you can recover, then it encourages you to vertical integrate so you can make profits other places. So if the costs are reflective of your premiums, then if you can capture those costs that you're paying out, then it gives you opportunity. So Mr. Hemsley, UnitedHealth Group has pursued aggressive vertical integration since the passage of Obamacare. And you have the largest health insurance plan, one of the largest PBMs and one of the largest employers of providers, and there's not a sector which you don't have a presence. So if competition helps health care, how do you explain the vertical integration? Does that encourage competition and cheaper... How do you explain the vertical integration and...

Thanks. My time has expired so I apologize and I will yield back to the chair.