ACA Subsidy Extension Vital Amid Rising Healthcare Costs, Yale Expert Urges

Yale School of Public Health Professor Zack Cooper testified before Congress to emphasize the importance of extending the Affordable Care Act (ACA) tax subsidies that benefit 22 million Americans and prevent millions from losing health coverage. While acknowledging the positive impact of these subsidies, Cooper highlighted the critical issue of rapidly rising healthcare costs that undermine affordability for families and employers alike. He pointed to factors such as hospital mergers, provider consolidation, staffing shortages, and increasing prices for medical devices and medications as key drivers behind these rising costs. Cooper stressed that focusing solely on subsidy extensions overlooks the fundamental problem: the escalating cost of healthcare itself. Rising employer-sponsored insurance premiums and ACA marketplace premiums are projected to increase significantly, largely due to growth in hospital and provider prices. Over 1,500 hospital mergers since the late 1990s have concentrated market power, enabling price increases that are passed on to employees through higher premiums and suppressed wages. In his testimony, Cooper advocated for targeted system reforms aimed at curbing healthcare spending growth. Key proposals included site-neutral billing reforms to eliminate higher Medicare payments for identical services delivered in hospitals versus independent physician offices, which incentivizes consolidation and raises prices. Cooper also suggested enhancing antitrust enforcement funding and supporting the establishment of a bipartisan commission to develop and implement long-term cost-reduction strategies. While the ACA subsidies provide crucial immediate relief for low- and middle-income individuals, Cooper emphasized that they are not a permanent fix. Instead, he framed subsidies as a temporary measure that buys time to enact broader reforms necessary to make healthcare coverage affordable by reducing the underlying costs of care. His remarks reflect growing attention among policymakers and health economists on market consolidation and pricing dynamics as fundamental obstacles to sustainable healthcare affordability in the United States.