When it comes to rising health care costs, is Congress focused on the right problem? Insurance costs are skyrocketing as Washington focuses on a sector where prices have remained relatively flat: Prescription drugs.
This year, prescription drug prices are rising in line with overall medical inflation—about 4 percent.[1] Yet insurers raised premiums in Affordable Care Act (ACA) plans by 26 percent.[2] Deductibles in ACA Silver plans have skyrocketed 119 percent over the past decade.[3]
Confusion surrounding drug pricing is understandable. It’s one of the most complex parts of the U.S. health care system. But much of that complexity is created by middlemen, not those who produce medications.
Many patients assume the amount they pay at the pharmacy counter reflects the price of a drug. In reality, copays, deductibles, rebates, fees, and other pricing mechanisms are set by insurers and their Pharmacy Benefit Managers. They often bear little or no relationship to a drug’s actual price.[4]
In many cases, insured patients can pay less for drugs by bypassing their health plan. The rise of GoodRx, Mark Cuban Cost Plus, and TrumpRx reflects this reality. These platforms help patients find lower cash prices on prescriptions—often lower than the insurer’s copay on the drug.[5]
Prescription drug coverage is deteriorating. In Medicare plans, 44 percent of medications are not covered at all, and nearly half of those that are covered come with access restrictions such as prior authorization or step-therapy requirements.[6] These barriers do not merely create inconvenience; they disrupt care, frustrate providers, and impose significant stress on patients and their families.
The numbers don’t lie. A national survey by the American Medical Association found that more than 80 percent of physicians report prior authorization requirements have increased in recent years, including for prescription drugs, and many say those requirements interfere with continuity of care.[7] A drug may be labeled “covered,” yet patients still face delays, denials, or administrative hurdles that effectively block access.
It goes beyond prior authorization. As insurers narrow coverage, they shift more financial risk onto patients. Higher deductibles, tiered formularies, and coinsurance requirements mean families pay more upfront before insurance kicks in.[8] That’s not cost containment—it’s cost shifting. This helps explain why affordability continues to worsen even when underlying medical inflation remains relatively modest.
These problems are especially pronounced in government programs. In Medicare Advantage, insurers receive roughly $86 billion annually in rebate dollars intended to fund supplemental benefits, yet only $3.9 billion—less than 5 percent—goes toward core services such as dental, vision, and hearing care.[9]
In 2023, ACA plans issued an estimated 73 million claim denials. The problem is getting worse. Insurance costs are soaring even as coverage deteriorates. Patients face higher premiums and deductibles, narrower formularies, and more barriers to care—all at once—while the nation’s health insurance giants continue to consolidate and expand their control over the health system.
If Congress wants genuine affordability, reform must begin with health insurance—its pricing, benefit design, and accountability. Until insurers are held to the same scrutiny as every other part of the health care system, Americans will keep paying more while getting less.
Mark Merritt is a health-care consultant who has held senior executive roles in the health sector.
Footnotes
[1] Bureau of Labor Statistics, Consumer Price Index, Prescription Drugs and Medical Care components, 2024–2025.
[2] Kaiser Family Foundation, ACA Insurers Are Raising Premiums by an Estimated 26%, analysis of 2025 ACA marketplace filings.
[3] Peterson–KFF Health System Tracker; Forbes analysis of ACA Silver plan deductibles, 2014–2024.
[4] Centers for Medicare & Medicaid Services (CMS), Medicare and commercial benefit design guidance; insurer and PBM pricing structures.
[5] GoodRx Research; studies showing insured patients sometimes pay more using insurance than paying cash prices for prescriptions.
[6] GoodRx, Prescription Drug Coverage Is More Restrictive Than You Think, Medicare Part D formulary analysis, 2023–2024.
[7] American Medical Association, 2023 Prior Authorization Physician Survey.
[8] Agency for Healthcare Research and Quality (AHRQ), Medical Expenditure Panel Survey; BLS Employee Benefits Survey.
[9] JAMA Network Open (2024); Medicare Payment Advisory Commission (MedPAC) reports on Medicare Advantage supplemental benefits.
