The Texas Legislature is ready to address healthcare affordability

In March, Texas House Speaker Dustin Burrows, R-Lubbock, created a new House Select Committee on Health Care Affordability, and gave it the task of examining factors affecting healthcare affordability in Texas. This bipartisan committee, led by Chair James Frank, R-Wichita Falls, and Vice Chair Toni Rose, D-Dallas, will focus this legislative interim on studying why healthcare in Texas is becoming less affordable. The committee will also study policy reforms the Legislature can make to realign incentives to put patients at the center of healthcare decisions.

What makes this moment notable is that policymakers and experts across the political spectrum are pointing to the same factors: consolidation, lack of competition, misaligned incentives and pricing opacity as the primary culprits for rising healthcare prices.

What Rising Healthcare Prices Mean for Texas Families

For many Texas households, the state’s economic growth isn’t translating directly into personal economic gains. That is due in part to the rising price of healthcare. Affordability of healthcare has become the primary financial anxiety for a majority of the state and national population, above other household expenses such as groceries, rent, and monthly utilities.

That anxiety exists for a good reason: Nationally, the average annual employer-sponsored health insurance premiums in 2025 are nearly $27,000 for family coverage, or roughly one-third of Texas’ median household income. Family premiums rose 6% this year, compared with 2.7% inflation and 4% wage growth. In other words, the price of coverage grew faster than workers’ earnings.

The price of premiums worry families, and so does the price of prescription drugs. About six in 10 (59%) U.S. adults report worry about their ability to afford prescription drugs expenses for themselves or their families. In the past year, 43% of U.S. adults said they did not take medication as prescribed due to expense. That includes skipping doses, cutting pills in half, or not filling prescriptions at all. In Texas, 29% of adults have not filled a prescription for a medicine due to expense.

These national trends remain just as pronounced in Texas, and have a direct impact on Texans’ decisions to seek care.

More than three in five, or 63%, of Texans say they skipped or postponed some form of healthcare in the past year because of expense. That includes screenings, check-ups, treatments, tests, filling prescriptions, and dental care. Almost half of Texans (46%) say it’s difficult for them to afford healthcare.

High prices and affordability are also impacting those enrolled in our state health benefit plans. The Teacher Retirement System of Texas (TRS) has even stated, “Health care costs continue to outpace income growth in the public education sector,” for individuals and their families enrolled in TRS-ActiveCare.

The harm is measurable. Texans are skipping prescriptions, postponing screenings, and struggling to pay for the care they need. The causes are not a mystery either. Consolidation, weakened competition, misaligned incentives, and opaque pricing have reshaped how healthcare markets function in Texas in ways that drive prices higher and limit patient choice.

With the formation of the Select Committee on Health Care Affordability, the Legislature now has a dedicated forum in place to confront this issue and provide policy options that help ensure Texans can access high-quality, affordable care.

The Market Dynamics Driving Prices Up

Healthcare is not just getting more expensive. It is getting less competitive, less transparent, and lacks engagement.

Our healthcare market here in Texas is not functioning effectively. A Healthy Market must be informed, competitive and accountable. An informed market is transparent, where businesses and consumers can make informed choices about what they are buying, and what the prices of those services are. A competitive market provides choices for consumers, where there is healthy competition and no single entity has the power to dictate the market and well-informed consumers are able to choose from an array of options that best fit their needs. When transparency and competition exist, we get a market where providers and insurers are accountable to patients. Patients, in turn, have the incentive to seek out high-quality, low-price care, and are rewarded when they do so.

When our market isn’t healthy, we see prices go up, based on market power rather than quality of care.

Part of this problem is Texas does not have enough competition. Over the past 20 years, hospital, insurer and private investor mergers and acquisitions have fundamentally reshaped the market. Texas has one of the highest shares of residents in highly concentrated hospital markets among peer states. Texas has nine metropolitan areas that have only one or two hospital systems. In these areas, competition for inpatient care is limited by definition; patients have fewer or no choices among providers.

Research on the effects of this consolidation points in a consistent direction. Prices tend to go up, consumer choice narrows, and quality of care does not necessarily improve. Hospital mergers have been associated with price increases of 6-18% without improvements to care quality. Hospitals that acquire physician practices tend to charge more for the same services, often adding “facility fees” that were not there before. That is happening right here in Texas.

Transparent pricing is also essential for a competitive and efficient market. Without clear pricing data, employers and state agencies struggle to design benefit plans that balance cost and quality. The Texas Legislature took a meaningful step by fully funding the Texas All-Payor Claims Database, providing data to evaluate price and quality. But billing transparency remains an unfinished problem. When hospitals acquire physician practices and bill under the hospital’s provider identifier, prices can skyrocket without explanation and patients and payers often have no way to see why.

These are the structural market dynamics contributing to significant price variation, driving costs higher for Texas families. Restoring healthy market function can help make care more affordable, and align incentives so that more providers are working hard to provide patients with affordable, convenient care. Taking a hard look at these market dynamics is precisely what the Legislature’s new select committee is charged with examining.

Texas Has a Chance to Lead on Healthcare Affordability

This is a real opportunity. The committee’s seven charges give legislators the runway to tackle the market dynamics that have driven prices up for years:

• consolidation that has left patients all over Texas with little or no choice among hospital systems;
• billing and pricing practices that leave families and employers in the dark;
• incentive structures that prevent employers and health plans from rewarding patients for choosing lower-price, higher-quality care;
• systems that financially reward insurers and providers when they act in their own interests rather than the best interest of patients; and
• barriers keeping small and mid-size businesses from offering coverage to their workers.

The committee has the opportunity to produce policy recommendations that lower prices, increase competition and transparency, and expand access for families, workers, and employers across the state.

At Texas 2036, we are excited about this. Healthcare affordability has been a central part of our work, with a focus on increased transparency, expanded options through competition, and aligned incentives. Through our Healthy Markets framework, we have been researching and documenting these market dynamics. Our work focuses on concentrated hospital markets, billing opacity, and the structural barriers that keep competition from working. We are also developing policy solutions to address them.

Seeing the Legislature commit dedicated resources to understanding and solving this problem is exactly the kind of policy momentum Texas needs. The tools to address this issue impacting Texas families are available. This committee now has the opportunity to use them to benefit Texas families.