Lowering Healthcare Costs and Making Health Care Affordable

The average employer family health plan now costs $26,993 a year. The worker sees $6,850 of that taken out of the paycheck; the employer pays the other $20,000, which is compensation the worker earned and never sees.^{11KFF, 2025 Employer Health Benefits Survey (October 22, 2025): average annual family premium $26,993; average worker contribution $6,850.} In the decade before the pandemic, family premiums grew roughly twice as fast as wages, and they rose another 6 percent last year, $1,408 in a single jump, while wages today are growing barely 3 percent.^{22KFF 2019 Employer Health Benefits Survey news release: since 2009, family premiums up 54 percent and worker contributions up 71 percent, versus wages up 26 percent and inflation up 20 percent. KFF 2025 news release: premiums up 6 percent…} Texas has the highest uninsured rate of any state, 16.7 percent, and nearly one in five Houston-area residents lacks coverage.^{33U.S. Census Bureau, 2024 American Community Survey (released September 11, 2025): Texas uninsured rate 16.7 percent, highest in the nation, via SHADAC. Houston metro uninsured rate 18.7 percent (analysis of the same data). In 2019 the Ho…} This year Texas families who buy their own coverage were hit again: insurers requested an average 24 percent premium increase for 2026, and national marketplace enrollment fell by roughly a quarter.^{44Texas Tribune (August 21, 2025): insurers requested an average 24 percent increase for 2026 Texas ACA plans. KFF (July 15, 2026): effectuated marketplace enrollment fell to about 17.5 million, consistent with CBO's projected ~25 percent …} Every one of those numbers lands on a family in TX-07 as the same thing: a bill they cannot understand, cannot shop around, and cannot avoid.

The disease: the person paying is never the person choosing. In a normal market the buyer and the payer are the same person, so everyone has a reason to find value. In American health care that link has been cut. Your employer picks the insurer. The insurer negotiates with the hospital. The hospital prices from a "chargemaster," an internal list with almost no relationship to what anything costs: the average hospital's charges run 3.4 times its Medicare-allowable costs, the fifty highest-markup hospitals charge roughly ten times, and hospitals bill medicines at nearly five times what they paid to acquire them, with about one in twelve marking up drugs more than tenfold.^{55Ge Bai and Gerard F. Anderson, "Extreme Markup: The Fifty US Hospitals With The Highest Charge-To-Cost Ratios," Health Affairs 34:6 (June 2015): national average charge-to-cost ratio of 3.4 (2012 Medicare cost reports); the 50 highest-ma…} Almost nobody pays the full sticker, but the sticker still drives everything: the uninsured are billed at it, insurers negotiate "discounts" off it, and some contract terms are literally a percentage of it. The higher the sticker, the bigger the "savings" your insurer prints on your statement. By the time a bill arrives, four or five parties have already made every decision, and each of them has built a business around the complexity. Simplifying it would threaten their margins.

How a drug that really costs $90 gets billed at $300. Follow one prescription. A manufacturer sets a list price of $300 a month. A patient who has not met the deductible fills it in January and pays roughly $300 at the counter. Months later, the manufacturer sends the pharmacy benefit manager, the middleman that decides which drugs a plan covers, a rebate of about $210 on that prescription, because the drug sits on the plan's preferred list. The drug's real price, list minus rebate, turns out to be about $90. The $210 never returns to the patient who paid $300; it goes into the plan's general fund, and historically part of it stayed with the middleman. And because the patient paid the whole $300 inside the deductible, the plan collected a $210 rebate on a prescription it paid nothing for.^{66Rebate mechanics: FTC, Pharmacy Benefit Managers: The Powerful Middlemen Inflating Drug Costs and Squeezing Main Street Pharmacies (interim staff report, July 9, 2024). U.S. Senate Committee on Finance, Insulin: Examining the Factors Dri…} Manufacturers learned the lesson quickly: raise the list price to fund a bigger rebate, keep the preferred spot, and let the uninsured and the insured-in-their-deductible pay the sticker. The three largest benefit managers handle nearly 80 percent of the roughly 6.6 billion prescriptions Americans fill each year, each is owned by an insurer, and federal investigators found that they marked up specialty generic drugs dispensed at their own pharmacies by hundreds, sometimes thousands, of percent, collecting $7.3 billion above acquisition cost between 2017 and 2022.^{77FTC interim staff report (July 2024): the three largest PBMs processed nearly 80 percent of the approximately 6.6 billion prescriptions dispensed by U.S. pharmacies in 2023; each is vertically integrated with a major insurer; affiliated …}

The private committee: It goes deeper than most Houstonians have ever been told. The prices Medicare pays physicians, which set the baseline for how nearly every private insurance contract in America prices physician services, are recommended by a private committee convened by the American Medical Association: 31 physicians, no congressional oversight, no transparency requirement, and a federal agency that has historically accepted roughly seventy to ninety percent of their recommendations, depending on the year.^{88RUC composition and acceptance rates: the RUC is a panel of 31 physicians; CMS has normally agreed with 69 percent of its recommendations and in some years adopted nearly all of them (Axios, 2017). Historical acceptance near 90 percent: …} The values rest on surveys in which specialty societies estimate how long their own procedures take. When the Washington Post compared those estimated times with state records of how many procedures physicians actually performed in a day, it found that some doctors would have to be averaging more than 24 hours a day to perform everything they were billing.^{99Peter Whoriskey and Dan Keating, "How a secretive panel uses data that distorts doctors' pay," Washington Post (July 20, 2013): physicians "would have to be averaging more than 24 hours a day to perform all of the procedures that they ar…} A past chairman acknowledged on the record that the numbers were not fine-tuned, and the economist who designed the original system has called what the process became incredibly political.^{99Peter Whoriskey and Dan Keating, "How a secretive panel uses data that distorts doctors' pay," Washington Post (July 20, 2013): physicians "would have to be averaging more than 24 hours a day to perform all of the procedures that they ar…} Because the fee schedule is budget-neutral by law, every inflated value for a procedure is paid for by cutting something else, usually the primary-care visit. Congress delegated the most consequential pricing decision in American health care to a private body with a direct financial interest, and then walked away.

The insurer: Then the insurer steps in. It negotiates a discount off the chargemaster and would like you to believe that discount is the insurer fighting for you. Under federal rules, an insurer's allowable profit is a percentage of total spending, so when hospital prices rise and premiums rise with them, the insurer's dollars rise too; it has little financial reason to fight the hospital.^{1010Affordable Care Act §2718, 42 U.S.C. § 300gg-18: medical loss ratio requirement (80–85 percent of premium revenue spent on care), so allowable margin scales with total spending.} Nearly one in five in-network claims on the federal marketplace is denied; of the denial reasons insurers disclose, only six percent involve a judgment of medical necessity; and fewer than one percent of denied claims are ever appealed.^{1111KFF, Claims Denials and Appeals in ACA Marketplace Plans in 2023 (January 2025): HealthCare.gov insurers denied 19 percent of in-network claims; only 6 percent of disclosed denial reasons cited lack of medical necessity; fewer than 1 per…} Every party in the chain is extracting money from a system in which the patient has been systematically removed from the negotiation.

Alexander's plan follows from the diagnosis.

First, make prices visible, and make it hurt not to. Hospitals have been required since 2021 to post their real, negotiated prices. The federal penalty tops out at $5,500 a day for the largest hospitals, about $2 million a year, and the hospital lobby's own numbers show that of more than 7,500 enforcement reviews, fewer than one in ten thousand has produced a fine.^{1212Current penalties: 45 C.F.R. Part 180; CMS civil monetary penalties of $300 per day for hospitals with 30 or fewer beds and up to $5,500 per day for larger hospitals. Enforcement record: American Hospital Association comment letter to Se…} Two bipartisan bills moved through committee this July: the Senate's Patients Deserve Price Tags Act, which requires a hospital's CEO or CFO to personally attest to the accuracy of its prices, adds penalties of $500,000 to $10 million for knowing repeat violators, bars HHS from waiving them, and ends the practice of counting a price "estimator" as compliance; and the House's Lower Costs, More Transparency Act of 2026, which extends disclosure to surgery centers, labs, imaging, insurers, and drug middlemen.^{1313S. 2355, Patients Deserve Price Tags Act (119th Congress), advanced by Senate HELP 21–1 on July 22, 2026: CEO/CFO attestation deemed material to federal payment; daily penalties scaled by bed count, escalating after one year; $500,000–$1…} Alexander will cosponsor and push for floor votes, and he will fight for three additions. Penalties should scale with revenue, not bed count; twenty-five dollars a bed is a rounding error to a billion-dollar system. Effective dates should be 2027, not 2028. And Congress should finish the sentence Texas started: Texas law already says a hospital may not collect from a patient until it provides an itemized, plain-language bill. Alexander would add, as Colorado did in 2022 with bipartisan sponsors, that a hospital may not collect at all for care it delivered while it was not posting its prices as required.^{1414Texas: Health and Safety Code Chapter 327 (Disclosure of Prices), enacted 2021 (HB 2090, 87th Leg.) and expanded 2025 (SB 331, 89th Leg.); Texas SB 490 (88th Leg., 2023), requiring an itemized, plain-language bill before a provider may a…} No audit needed; the rule enforces itself at the moment the hospital tries to get paid.

Second, pay for what the work actually takes. Medicare's physician prices should rest on actual time-stamped data from operating rooms and electronic records, independent economists, and transparent review, not on the estimates of the people being paid. Alexander will also push site-neutral payment, so Medicare pays the same price for the same service whether it is delivered in a doctor's office or a hospital-owned clinic across the parking lot. Independent estimates put the federal savings around $150 billion over a decade, with another $137 billion for beneficiaries in lower premiums and cost-sharing, and the idea has been recommended by Medicare's own advisory commission and proposed by presidents of both parties.^{1515Committee for a Responsible Federal Budget, Health Savers Initiative, Equalizing Medicare Payments Regardless of Site-of-Care (February 23, 2021): an estimated $153 billion in net Medicare savings over a decade, plus $137 billion in bene…}

Third, break the middlemen, all the way down the chain. In February, Congress finally enacted bipartisan reform of pharmacy benefit managers as part of the annual funding law. In Medicare's drug program, benefit managers may now be paid only a flat, fair-market fee for work actually performed, ending compensation tied to a drug's list price. For employer and union plans, they must pass through 100 percent of rebates, discounts, and fees to the plan that pays for coverage and file standardized reports so employers can audit them, and the law defines "benefit manager" broadly enough to reach the rebate aggregators and purchasing groups through which margin had been routed.^{1616Consolidated Appropriations Act, 2026, H.R. 7148, Pub. L. 119-75 (signed February 3, 2026): Medicare Part D delinking (bona fide service fees only); 100 percent pass-through and standardized reporting for group health plans; broadened PB…} Those rules do not take effect until 2028 and 2029. Alexander will fight to see them implemented on schedule, and to extend the same discipline to every link: public justification for list-price increases above a threshold; disclosure of wholesaler fees; a ban on "spread pricing," where a middleman charges the plan $100 for a generic and pays the pharmacy $20, in every market rather than only Medicaid; cost-sharing calculated on the real net price at the pharmacy counter, which is the provision a patient would feel; and reporting by the hospitals that profit from the 340B drug-discount program so its benefits reach patients rather than margins.^{1717Models for the extension: the FTC interim reports (sources 6–7); the 340B reporting provisions of H.R. 5378 (118th Congress); and existing state spread-pricing bans. Specific bill vehicles to be pinned when legislation is drafted.} He will support antitrust scrutiny of hospital mergers that turn regional health systems into local monopolies.

Fourth, give the power back to patients. There is a model already working across Houston called Direct Primary Care. You pay your doctor a flat monthly fee, directly, with no insurer in the middle. The practice carries a few hundred patients instead of a few thousand. When you are sick, you call, they answer, you are seen that day. Pair that with a lean catastrophic plan for real emergencies, and the whole arrangement costs a fraction of traditional coverage. Last year's tax law took the first step: as of January 1, Direct Primary Care memberships up to $150 a month can be paid from a health savings account without costing you HSA eligibility, and bronze and catastrophic plans are HSA-compatible for the first time.^{1818One Big Beautiful Bill Act, Pub. L. 119-21 (July 4, 2025), Secs. 71306–71308, with IRS guidance in Notice 2026-05: telehealth safe harbor made permanent; direct primary care arrangements up to $150 per month for an individual ($300 for m…} Alexander will build on it: larger HSA contribution limits, HSAs that can pay a catastrophic premium, and an end to the rules that punish families for choosing a simpler, cheaper way to see a doctor.

None of this is what usually sells in a campaign. "Free health care for all" fits on a sign; a plan to dismantle the middleman economy does not. But single-payer does not eliminate the middlemen; it consolidates their leverage. When the government is the only buyer, hospitals stop competing for patients and start competing for congressional favor, a game the American Hospital Association is very good at, and the three drug-benefit giants become federally sanctioned administrators of the whole system. The answer to high costs is not for the government to pick up more of the tab. It is to fix the market so the tab is lower to begin with.

The health care system is not broken by accident. It was built by people who benefit from the confusion. Alexander believes you deserve to know what is actually on your bill, and why, and he intends to be the member of Congress who finally does something about it.