AUSTIN, Texas — State lawmakers and public employee health plan administrators discussed rising health care costs on Friday during a hearing of the Texas House Select Committee on Health Care Affordability, where officials from two major public insurance systems testified on pricing trends and market conditions.
The committee, chaired by James Frank, held the second day of a public hearing focused on factors affecting health care affordability in Texas. Frank said the committee reviewed testimony from large public health care purchasers to examine cost increases.
The hearing included testimony from the Teacher Retirement System of Texas and the Employees Retirement System of Texas, which both provide health coverage to large populations of public employees and retirees.
Katrina Daniel, chief health care officer for TRS, said the system covers about 1,000 school districts and uses regional pricing models that set insurance premiums based on geographic cost differences. She said premiums vary across the state and remain lower in some regions, including parts of South and West Texas, compared with areas such as Dallas-Fort Worth and Austin.
Daniel said higher regional costs reflect higher prices for health care services. She also said consolidation among providers affects pricing and access in certain markets.
ERS director of group benefits Blaise Duran said health care costs have continued to rise across the industry and cited inflation as a primary driver of increased expenses. He said ERS avoided requesting additional funding from the Legislature between 2017 and 2025 due to contract changes, even as underlying costs increased.
Lawmakers also examined how provider consolidation and insurance market structure affect prices. Frank said the committee is reviewing areas where fewer providers may influence costs and competition.
Wendel Potter, president of the Center for Health and Democracy and a former insurance executive, testified that premiums have increased while coverage has declined, and said insurance practices such as network restrictions and claim denials affect costs and access.
Susan Pantely of the American Academy of Actuaries said insurance premiums reflect projected health care costs and that affordability depends on multiple factors, including market competition and regulatory conditions.
Committee members said they plan to continue hearings over the summer and prepare a report with policy recommendations ahead of the 2027 legislative session.
