As health care costs continue to rise in Texas and across the nation, state lawmakers are working to understand the factors that make health care unaffordable and what can be done to rein in prices.

The big picture

About 5.2 million Texans, or 16.7% of the state’s population, did not have health insurance in 2024, according to data from the U.S. Census Bureau. Texas’ uninsured rate was higher than any other state in 2024.

For years, advocates have called on Texas lawmakers to pass laws to drive down health care costs and improve access to health insurance. Ahead of the 2027 state legislative session, the House Select Committee on Health Care Affordability is examining the drivers behind health care costs.

“Our goal for the committee is to eventually arrive at policy solutions that will help decrease the cost of quality health care for our constituents and, at the very least, stop the out-of-control health care inflation that is taking a bigger and bigger piece of every Texan’s economic lives,” committee chair Rep. James Frank, R-Wichita Falls, said April 30.

During a two-day hearing April 30 and May 1, the House panel heard from economists, insurance actuaries, state benefit agencies and other health care experts. Frank said the initial hearings were focused on why health care costs are rising, noting that lawmakers will discuss potential policy solutions later this year.

“Many of us know the health care pricing is largely broken, but I think sometimes it’s difficult to know why,” he said. “It is my firm belief that until and unless we have a clear understanding of where we are and how we got here, we have little or no chance of knowing where we should go from here. … It is my hope and prayer that eventually this committee, the House and the entire Legislature will be able to embrace policy solutions that our constituents are literally begging for.”

Rep. Toni Rose, a Dallas Democrat and the committee’s vice chair, said she’s had constituents come to her office because they cannot afford their children’s asthma treatment.

“It’s not sustainable. … It’s unacceptable,” Rose told the committee April 30. “I just hope that we are here to have real conversations and [find] real solutions. And please don’t make this partisan—please make it about Texans and people’s lives.”

Zooming in

U.S. residents spend more on health care than their counterparts in large countries with similarly sized economies, including Canada, Australia, Japan and nations in Western Europe, according to data from the nonprofit health policy group KFF.

Cynthia Cox, a senior vice president with KFF, told lawmakers that Americans “don’t necessarily get better outcomes” by spending more on health care.

“We spend more on average per person on health care, and yet we live shorter lives,” she said April 30. “Some evidence shows that in the United States, we do not necessarily use more health care than other countries do, but rather that we pay higher prices for the care that we do get. So we have, on average, fewer physician visits per person, shorter hospital stays than comparable countries.”

Health care costs in the U.S. have generally risen faster than inflation rates, KFF found.

“When health care [costs are] going up a lot faster than wages every year, it just means now you’re spending money, or your employer is spending money, on health care costs instead of housing and food and Little League games,” Frank said. “In the last 25 years, we have crushed people with the way our system has caused prices to skyrocket.”

Wendell Potter, president of a health care reform advocacy group called the Center for Health and Democracy, said employer-sponsored health insurance costs account for roughly one-third of the median household income in Texas.

Zack Cooper, director of Yale University’s Health Care Affordability Lab, said that since 2000, U.S. health care spending has grown three times faster than inflation. The average health insurance premium for a family of four is $27,000 per year, he said.

“Every family is basically buying a new Toyota Corolla worth of health insurance,” Cooper said April 30.

More details

Cooper told lawmakers that the consolidation of hospitals and other health care companies may be part of what’s driving health care price increases. Since 2000, there have been more than 1,300 mergers among the nation’s approximately 5,000 hospitals, he said.

“So even though we rely on competition to determine the prices that insurers want to pay hospitals, about 21% of hospitals are effectively monopolies,” Cooper said.

He said Americans rely on competition in the health insurance market to provide affordable insurance to employers and individuals; competition between hospitals to provide quality services and keep prices down; and competition between physicians to keep health care markets functioning.

“What we’ve seen over 25 years is, in a sense, a system that relies on competition with markets that have become less and less competitive,” Cooper told lawmakers. “You can rely on competition, … but what you can’t do is hope for competitively-determined rates in a market that doesn’t have entities that are competing.”

Rep. Lauren Ashley Simmons, D-Houston, noted that one of the goals of the insurance and health care industries is to turn a profit.

“Not to say that they don’t care about patients or they hate patients, but their primary focus is to make money,” Simmons said April 30. “I’m not trying to defend the insurance companies or the rise of expensive health care—it’s something that I’m very concerned about. But it feels like what we’re talking about is essentially trying to force companies to be more ethical and patient-centered, or regulate them into doing that.”