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medicare advantage
Medicare Advantage, Privatized Medicaid Could Cost Americans $2 Trillion Extra Over Next Decade
"If the administration were serious about curbing waste and inefficiency, it would start by reducing the diversion of public funds to these corporate intermediaries," argues a new paper.
Nov 07, 2025
US President Donald Trump and his Republican allies in Congress took a sledgehammer to Medicaid over the summer, justifying the unprecedented cuts by falsely claiming the program that provides health coverage to tens of millions of low-income Americans is overrun with waste and abuse.
But a new paper published Friday in the journal Health Affairs argues that if the administration actually wanted to target waste, fraud, and abuse, it would have been much better off taking aim at Medicare Advantage (MA) and Medicaid privatization.
The paper's authors estimate that overpayments to MA plans—which are funded by the government and run by for-profit insurers—and private Medicaid managed care will likely cost US taxpayers a total of $1.92 trillion over the next 10 years.
"Ending that waste would inflict losses on private insurers' shareholders and executives (the CEO of the largest MA firm made $26.3 million last year). But patients, not just government coffers, might gain," wrote Adam Gaffney, Danny McCormick, Steffie Woolhandler, and David Himmelstein.
"Even Congress' trillion-dollar cuts to Medicaid and food assistance amount to little more than half of the potential savings from de-privatizing Medicaid and Medicare," they added. "Reclaiming those funds would require reversing the decades-long trend of outsourcing to profit-seeking intermediaries and restoring Medicare and Medicaid as efficiently administered public programs."
Far from aggressively taking on Medicare Advantage fraud, the Trump administration handed MA plans a major gift earlier this year by approving an average federal payment increase of roughly 5.1%—more than double the 2.2% increase proposed by the Biden administration in January.
The authors of the new paper noted that the huge raise for MA plans, which are notorious for denying necessary care in pursuit of ever-larger profits, will add $25 billion in waste to the US healthcare system next year alone.
"If the administration were serious about curbing waste and inefficiency," they wrote, "it would start by reducing the diversion of public funds to these corporate intermediaries."
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Just Say No to AI-Assisted Medicare Preauthorization
A new AI-driven Medicare prior-authorization pilot could dramatically weaken Medicare, just another frightening step toward privatization and profiteering.
Sep 03, 2025
The odds are that if you have private health insurance or someone in your family has private health insurance, you have heard the dreaded phrase “we need preauthorization” from your insurance company. What this means is that your insurance company needs to approve in advance that your treatment or prescription is covered. In theory, this should be no big deal. However, reality is something else. But as the New York Times points out:
Private insurers often require a cumbersome review process that frequently results in the denial or delay of essential treatments that are readily covered by traditional Medicare. This practice, known as prior authorization, has drawn public scrutiny, which intensified after the murder of a UnitedHealthcare executive last December.
So, reading this you might think that you are glad that you or someone in your family choose traditional Medicare (in other words not a Medicare Advantage plan), so you would be able to avoid the “prior authorization needed” drama. Well, unfortunately you would be wrong as the prior authorization is slowly coming to Medicare. In late June, the Centers for Medicare and Medicaid Services (CMS) issued a press release:
The Centers for Medicare & Medicaid Services (CMS) is announcing a new Innovation Center model aimed at helping ensure people with Original Medicare receive safe, effective, and necessary care. Through the Wasteful and Inappropriate Service Reduction (WISeR) Model, CMS will partner with companies specializing in enhanced technologies to test ways to provide an improved and expedited prior authorization process relative to Original Medicare’s existing processes, helping patients and providers avoid unnecessary or inappropriate care and safeguarding federal taxpayer dollars. This model builds on other changes being made to prior authorization as announced by the US Department of Health and Human Services and CMS on Monday.
In theory, this move by CMS does not sound bad. Who could be against reducing wasteful spending in Medicare and making sure that people receive appropriate treatment? A spokesman for CMS has been quoted that the government would not review emergency services or hospital stays.
The CMS prior Medicare authorization model is being rolled out in January 2026 as a six-year trial program in six states: Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington State. In theory, the preauthorization program will look at those medical treatments that are not of benefit to Medicare beneficiaries.
What CMS is not drawing attention to is that this preauthorization will be done by artificial intelligence (AI)—or as CMS puts it “enhanced technologies.” It is not until much later in the press release that CMS gets to the fact that AI will do the screening authorization:
The WISeR Model will test a new process on whether enhanced technologies, including artificial intelligence (AI), can expedite the prior authorization processes for select items and services that have been identified as particularly vulnerable to fraud, waste, and abuse, or inappropriate use.
CMS, at the moment, says that the AI preauthorization screening will be used on only an extremely limited number of procedures. But what guarantees do Medicare beneficiaries have? The bottom line is that you have to ask yourself: Would you be comfortable having your access to your earned Medicare benefits be determined by AI? My answer is a firm, “No, thank you.”
We also need to ask what are the financial incentives that Medicare is injecting into the system though preauthorization? It is hard not to conclude that this is a step toward privatization of traditional Medicare.
Healthcare professionals are concerned by CMS’ preauthorization program. In mid-July, the American Medical Association (AMA) wrote to CMS:
While the stated goal of the model is to curb wasteful spending and protect the Medicare Trust Fund, the mechanisms employed raise several significant issues that must be addressed prior to implementation. The AMA strongly urges CMS to pause the January 1, 2026 implementation of the WISeR Model to allow additional stakeholder input, full analysis of the model’s operational impacts, and development of clear guidance for physicians. Physicians should not be forced to adapt to such substantial administrative requirements without sufficient time to understand the implications and prepare. Absent this opportunity for meaningful physician and stakeholder engagement, the model risks creating confusion, administrative burden, and unintended consequences that could ultimately undermine CMS’ own goals to reduce waste, fraud, and abuse.
On Capitol Hill, a number of House Democrats led by Rep. Alexandria Ocasio-Cortez of New York have pushed back on the AI preauthorization pilot project. In late July, they wrote to CMS:
We understand that CMMI has intentionally selected healthcare services that are reported to have limited clinical value and may be vulnerable to abuse in the Medicare program, and we support efforts to ensure Medicare remains a good steward of taxpayer dollars. However, the expansion of AI-fuelled prior authorization will not improve program integrity in Traditional Medicare. Giving private for-profit actors a veto over care provided to seniors and people with disabilities in Traditional Medicare, even as a pilot program, opens the door to further erosion of our Medicare system. We therefore strongly urge you to immediately halt the proposed WISeR model and instead consider steps to address the well-documented waste, fraud, and abuse in the Medicare Advantage program.
The House Democrats raise a very intriguing question about why CMS is not focused more on fighting waste, fraud, and abuse in Medicare Advantage plans? As the Center for Budget and Policy Priorities reported in January of this year, there is considerable evidence to show that Medicare Advantage plans are overpaid by the government. It would make sense for CMS in pursing fraud and waste to follow the money which means looking at Medicare Advantage plans.
Give the political dynamics in Washington, it seems likely that the CMS preauthorization demonstration project will go into effect in January 2026. Then in the summer of 2026, with the midterm elections looming, as members of Congress will begin hearing from constituents who have had their earned Medicare benefits denied by AI, Congress will revisit this issue. It is tragic that in the meantime people will be hurt.
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Senate Dems Probe UnitedHealth Scheme to Slash Patient Care Costs at Nursing Homes
One whistleblower accused the giant corporation of "compelling medical professionals to comply with its financially-driven playbook at the expense of patient safety."
Aug 07, 2025
A pair of Democratic senators on Thursday launched an investigation into the most powerful corporation in the U.S. healthcare system, sounding alarm over allegations that UnitedHealth Group is incentivizing nursing homes to slash care expenses for patients insured by the company.
Sens. Ron Wyden (D-Ore.) and Elizabeth Warren (D-Mass.) wrote in a new letter to the company's CEO that UnitedHealth Group (UHG) has "been at the center of numerous reports suggesting that it is maximizing profits at the expense of patients' health and well-being," including accusations that the company "systematically denied needed care to children and adults with chronic illnesses" and used an artificial intelligence algorithm to deny Medicare Advantage enrollees necessary care.
Most recently, the senators noted, reporting by The Guardian alleged that UnitedHealth is using a bonus scheme to push nursing homes that contract with Optum to reduce hospital transfers as part of an aggressive cost-cutting effort. Optum is a UHG subsidiary that employs or affiliates with roughly 10% of all physicians in the U.S.
Wyden and Warren demanded that UnitedHealth provide answers to numerous questions related to its practices at nursing homes, including whether it institutes "hospital transfer quotas" at the facilities it works with.
"UHG denies the allegations in The Guardian's reporting and maintains that its practices reflect best practices in the care of nursing home residents," the senators wrote. "However, we are concerned that the methods UHG appears to rely on to deliver the high-quality care it purports to provide may in fact incentivize practices that threaten resident safety."
"I'd like to see them held accountable for putting profits over patients."
The Guardian's reporting underscores the extent to which UHG has injected itself into virtually every aspect of the American healthcare system. The healthcare conglomerate has roughly 2,700 subsidiaries, according to an analysis by the Center for Health and Democracy.
Using confidential corporate and patient records, whistleblower accounts, and interviews with UHG staffers and nursing home employees, The Guardian examined a company program under which Optum medical teams provide care on-site at nursing homes or in partnership with facility staff.
The newspaper identified "several cases" in which "nursing home residents who needed immediate hospital care under the program failed to receive it, after interventions from UnitedHealth staffers."
"At least one lived with permanent brain damage following his delayed transfer, according to a confidential nursing home incident log, recordings, and photo evidence," the newspaper reported. "To reduce residents' hospital visits, UnitedHealth has offered nursing homes an array of financial sweeteners that sounded more like they came from stockbrokers than medical professionals."
The company also allegedly gave its medical teams "budgets" limiting the number of hospital admissions they could allow for nursing home patients.
One whistleblower, a nurse practitioner formerly employed by a UnitedHealth insurance subsidiary, said in a statement that "scores of elderly patients may never have received the care that they needed, all because UnitedHealthcare skimped on care to cut costs."
“UnitedHealthcare is compelling medical professionals to comply with its financially-driven playbook at the expense of patient safety in a way that pressures providers to violate their ethical obligations," the whistleblower added. "I'd like to see them held accountable for putting profits over patients."
UnitedHealth raked in over $34 billion in profits last year—far more than any other U.S. healthcare company.
Wendell Potter, a former Cigna executive who now serves as president of the Center for Health and Democracy, wrote in a recent blog post that mounting scrutiny of UHG's practices shows the company is "facing a reckoning it can't ignore."
"It's coming from every direction: the U.S. Department of Justice (under President Donald J. Trump), congressional Republicans and Democrats, state lawmakers and regulators, the media, physicians, hospital administrators, tens of thousands of Americans on the internet sharing their own personal UnitedHealth horror stories, and, most importantly for the C-Suite, enraged investors who've lost hundreds of billions of dollars in recent months," Potter wrote.
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