Healthcare Markets: Fraud & Competition — House Judiciary Hearing Transcript — September 14, 2026

13:35The field hearing opens by defining its scope: mergers, certificate-of-need laws, regulation, vertical integration and fraudulent insurance practices, and how each affects healthcare access and affordability.

13:54Members argue that fraud in Affordable Care Act marketplaces has become part of the affordability problem and ask whether subsidy design creates incentives for improper enrollment.

18:01A private witness, paraphrased, presents research estimating widespread improper enrollment in ACA coverage expansions and says weak verification combined with very large subsidies can make fraud profitable.

18:59The witness explains, in paraphrase, that insurers receive the subsidized premium and brokers receive commissions while a person remains enrolled, creating incentives to keep people on zero-premium plans even when eligibility is questionable.

20:18The witness cites a large estimate for federal payments associated with enrollees who did not use their plans. The number is presented as the witness's research claim and not independently verified by LongScribe.

22:00The testimony argues that reducing improper enrollment and waste should be treated as part of a broader affordability agenda rather than only as a criminal-enforcement problem.

23:13The hearing turns to competition. Witnesses, paraphrased, criticize restrictions on physician-owned hospitals and certificate-of-need laws that can prevent new facilities or competitors from entering local markets.

24:10A physician witness discusses hospital consolidation and argues that policy has often rewarded larger systems even when consolidation raises prices or reduces choices.

24:45The witness summarizes the case against consolidation: fewer competitors can mean higher prices for patients and employers, weaker bargaining power for workers and less pressure on systems to improve service.

27:25Certificate-of-need laws become a central topic. The witness argues that requiring government approval for new facilities or major equipment can make entry difficult and protect incumbents from competition.

28:34Proposed responses include benefit designs that steer patients toward lower-cost providers, more competition-policy advocacy by federal agencies and changes to payment rules that favor consolidation.

41:36Members shift back to fraud, arguing that every dollar lost to improper billing or enrollment is unavailable for legitimate patient care and asking how much fraud can be prevented before claims are paid.

42:35The hearing cites the 2026 National Healthcare Fraud Takedown and other prosecutions as examples of the scale of alleged fraud; the speakers use those cases to argue for stronger prevention as well as enforcement.

43:23A member asks about Medicaid fraud and the fiscal incentives facing states when the federal government pays most of the cost for expansion populations.

43:36A private witness, paraphrased, argues that the federal matching structure can weaken state incentives to recover improper spending because most recovered dollars must be returned to Washington.

45:19Asked how to stop fraud before it occurs, the witness recommends changing incentives. The testimony focuses on zero-premium ACA plans and Medicaid audit rules rather than relying only on post-payment investigations.

45:34The witness, paraphrased, says zero-premium plans can make unauthorized enrollment easier because neither the enrollee nor broker must collect a meaningful payment from the consumer.

50:30Members ask about improper spending tied to enhanced premium tax credits and which industry participants benefited from questionable enrollment. The discussion focuses on insurers and brokers that receive payment while enrollment stays active.

54:35The hearing returns to consolidation. A witness says the trend of the last two decades is not simply successful providers winning customers but is heavily shaped by reimbursement, regulation and acquisition incentives.

57:03Certificate-of-need laws and nonprofit or government ownership rules are discussed as possible barriers to entry, together with vertical integration between insurers, physicians, pharmacies and other healthcare businesses.

01:01:23Members ask how concentration affects prescription-drug markets and pharmacy benefit managers. A private witness, paraphrased, says both horizontal consolidation and vertical integration can increase prices and reduce transparent competition.

01:04:22The witness recommends more transparency and competition, and criticizes payment and insurance rules that in his view encourage vertical consolidation.

01:08:30The committee considers how to protect access to essential hospitals while still allowing new competitors, including physician-owned facilities, to enter markets.

01:08:56The hearing closes this section by tying together PBM concentration, ACA marketplace fraud and hospital competition under a common goal: a healthcare market that rewards quality while reducing opportunities for waste and abuse.