A Senate hearing on “shoppable” healthcare devolved into a fiery debate over the future of the Affordable Care Act’s enhanced subsidies, the key dispute driving the government shutdown, as Democrats claim millions could lose coverage if the credits lapse.
The hearing, led by chairman Rick Scott (R-FL) and ranking member Kirsten Gillibrand (D-NY), was billed as a discussion on how transparency and consumer choice could lower costs for older Americans. But it quickly became a proxy battle over the shutdown and whether to extend the ACA’s premium tax credits, which expire at the end of the year.
The dispute has fueled the government shutdown that began in early October. Democrats say they won’t approve new funding without an extension of the ACA subsidies, while Republicans argue the issue should be settled separately once the government reopens and that Obamacare itself is to blame for rising premiums.
Gillibrand and witness Jeanne Lambrew, a former Obama health official and senior fellow at the Century Foundation, warned that if the subsidies are not renewed, premiums could double for millions of older adults buying insurance on the marketplace. Lambrew testified that a typical 60-year-old couple earning $85,000 could see a jump of more than $20,000 next year, calling it “an impossible amount for families trying to save for retirement.”
Sen. Raphael Warnock (D-GA) emphasized the human impact, citing a Georgia small business owner whose monthly premium would rise from $228 to $1,142 if the credits expire. “That’s quite a jump,” he said, warning that the cost increase will ripple across the economy. “This gut punch for small businesses impacts the overall economy because small businesses are such a big part.”
Mark Cuban, the billionaire investor behind Cost Plus Drugs, told senators the uncertainty around premium increases would leave many Americans “terrified” heading into open enrollment. “It’s one thing to know your premiums are going up,” he said. “It’s another not to know how much or how soon.”
Cuban, appearing alongside Lambrew, CalPERS health director Don Moulds, and Surgery Center of Oklahoma co-founder Dr. G. Keith Smith, used his testimony to rail against pharmacy benefit managers, which he said profit from inflated list prices at patients’ expense. He detailed how the PBM system drives up drug costs by rewarding higher list prices through rebates and fees and said the structure “makes it almost impossible for patients to see the true cost of their medications.”
Cuban also highlighted his company’s partnership with the Trump administration’s new TrumpRx program, a government-backed website intended to connect Americans directly with pharmaceutical companies to purchase discounted medications without going through insurance.
Cuban first announced the collaboration during his keynote appearance at the HLTH healthcare conference in Las Vegas on October 19. TrumpRx, which already includes pharmaceutical partners such as Pfizer, mirrors the model behind Cuban’s Cost Plus Drugs, which manufactures generic medications at its Deep Ellum facility in Dallas and sells them at cost plus a 15% margin. “We’re excited to work with TrumpRx,” Cuban said. “It’ll let patients see real prices and save seniors and everyone else a lot of money.”
The most contentious moment came during a tense back-and-forth between Sen. Ron Johnson (R-WI) and Lambrew, who helped design and implement the ACA during the Obama administration. Johnson repeatedly pressed Lambrew on President Barack Obama’s 2009 pledge that the ACA would reduce family premiums by $2,500 and allow Americans to keep their doctors and plans, promises he said “never materialized.” He cited data showing benchmark premiums have risen more than 100% since 2013 and argued that Democrats’ enhanced subsidies are a “gimmick” designed to obscure those failures.
“All that happens when these subsidies expire,” Johnson said, “is we go back to the original design of Obamacare, which didn’t lower premiums, didn’t let people keep their doctors, and has been a disaster.”
Lambrew pushed back forcefully, insisting that the ACA’s marketplace reforms and enhanced subsidies have expanded coverage, slowed cost growth, and reduced out-of-pocket expenses. “Costs have grown more slowly than employer coverage, choices have expanded, and deductibles have actually gone down,” she said. When Johnson accused Democrats of “papering over” the law’s flaws, Lambrew replied, “We figured out something that worked; it should be extended. Going backward would be catastrophic for millions of Americans, especially older adults nearing retirement.”
As the exchange grew heated, the two repeatedly talked over each other, with Johnson calling the subsidies “unsustainable spending” and Lambrew accusing Republicans of ignoring the real-world consequences. “People will lose coverage. Hospitals will absorb more uncompensated care. Everyone will pay more,” she said.
Sen. Dave McCormick (D-PA) later turned the conversation to anti-competitive practices that inflate prices, citing “all-or-nothing” and “anti-steering” clauses that restrict consumer choice. Moulds said CalPERS has fought such provisions in court and that hospital consolidation continues to drive up costs. Cuban added that large pharmacy benefit managers routinely block Cost Plus Drugs from networks even when they offer cheaper options. “If we’re less expensive, buy from us,” he said. “If we’re not, don’t, but they still say no.”
The focus then shifted to pharmacy oversight and transparency. Sen. Elizabeth Warren (D-MA) accused Express Scripts, the Cigna-owned PBM that manages TRICARE for 9 million military families, of “self-dealing” by underpaying independent pharmacies while overcompensating its corporate affiliates.
She asked Cuban whether new disclosure rules could help. “It would save a lot of money,” he said, arguing that PBMs are “literally, purposely” driving smaller pharmacies out of business. Warren said she plans to push the Defense Department for annual audits and pursue bipartisan legislation with Sen. Josh Hawley (R-MO) to simultaneously bar companies from owning a PBM, insurance plan, and pharmacy chain.
Her warning struck a bipartisan chord. Sen. Jim Justice (R-WV) called PBM consolidation a “runaway train wreck” crushing small-town pharmacies. “All of us realize the problem,” he said. “All of us have to have enough guts to do something about it.”
MTG URGES OBAMACARE ‘OFF RAMP’ AS GOP BLEEDS HEALTHCARE SUPPORT
Calling it “insane” that only 17% of Americans know the price of their care before receiving it, Sen. Ashley Moody (R-FL) pointed to Smith’s Surgery Center of Oklahoma as a model for transparency. Smith said posting his all-inclusive prices online spurred hospitals nationwide to match them “rather than lose patients.”
