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A right-wing coalition's proposal to make Medicare Advantage the default enrollment option would be a "clear handout to the private insurance industry," said one critic.
A right-wing coalition that's been laying the policy groundwork for another Trump presidency has developed a plan to further privatize Medicare by making fraud-riddled Medicare Advantage "the default enrollment option" for newly eligible beneficiaries.
The plan, highlighted Monday by Rolling Stone's Andrew Perez, is outlined about halfway through Project 2025's 920-page playbook for the first six months of a conservative presidency.
Republican administrations and right-wing groups have long advocated funneling people who are newly eligible for Medicare into Medicare Advantage plans, which are funded by the federal government and run by for-profit insurers. During his first White House term, former President Donald Trump took steps to actively encourage seniors to choose Medicare Advantage plans over traditional Medicare and expanded the benefits that the privately run plans are allowed to offer.
Those efforts have had an impact. As Perez noted, "Last year, for the first time ever, a majority of Americans eligible for Medicare were on privatized Medicare Advantage plans."
"If Republicans win the presidential race this year," he wrote, "the push to fully privatize Medicare, the government health insurance program for seniors and people with disabilities, will only intensify."
Every year, new and existing Medicare recipients have an opportunity to enroll in Medicare Advantage plans, which engage in aggressive and often highly deceptive advertising practices to lure seniors who are often seeking out benefits not currently offered by traditional Medicare, such as vision and dental care.
"Donald Trump and his MAGA Republican cronies plan to totally privatize Medicare if they win in November's election."
Once enrolled in Medicare Advantage plans—which offer limited networks of doctors and overbill the government to the tune of $140 billion a year—patients often feel trapped and are subjected to care denials and other deep flaws in the program that have drawn growing attention from lawmakers in recent years.
If Project 2025, which is led by the right-wing Heritage Foundation, gets its way, Medicare Advantage providers would be given even greater power over the critical government insurance program. The Trump administration embraced many of the Heritage Foundation's policy recommendations during its first year in power.
"Donald Trump and his MAGA Republican cronies plan to totally privatize Medicare if they win in November's election," the progressive advocacy group Social Security Works wrote in response to Rolling Stone's reporting. "Hell no. Hands off our earned benefits."
Philip Verhoef, president of Physicians for a National Health Program, told Rolling Stone that Project 2025's plan to make Medicare Advantage the default enrollment option would be "disastrous."
"To do so would be really just a clear handout to the private insurance industry," Verhoef said.
Project 2025 has said that it doesn't "speak for any presidential candidate," but Trump's reelection campaign has relied on parts of the coalition's proposed agenda for second-term planning.
Trump's team has faced backlash over some of Project 2025's work, including draft executive orders that would use the Insurrection Act to deploy the U.S. military against demonstrators. As The Washington Postreported in December, Trump campaign senior adviser Susie Wiles complained privately to Project 2025's director and asked the coalition to "stop promoting its work to reporters."
Seth Schuster, a spokesperson for President Joe Biden's reelection campaign, warned in a statement Monday that "if Donald Trump wins this November, he and Republicans will continue their push to end Medicare as we know it for millions of Americans."
"Trump will leave millions of seniors with fewer benefits and less access to doctors—all to benefit his big insurance donors," said Schuster. "In Trump's America, the special interests win and seniors and working families lose. Worse care, broken promises, and higher costs—that's Trump's plan for seniors and working families."
In addition to making Medicare Advantage the default enrollment option for Medicare, Project 2025 is calling for the revival of the Global and Professional Direct Contracting Model, a Medicare privatization scheme that the Biden administration rebranded as ACO REACH and slightly modified—to the dismay of physicians, healthcare campaigners, and progressive lawmakers who called for the repeal of the Trump-era pilot program.
The seven largest for-profit insurance companies in the U.S. have seen their combined revenues from taxpayer-backed programs grow 500% over the past decade.
A new analysis released Monday shows that insurance giants are benefiting hugely from the accelerating privatization of Medicare and Medicaid, which for-profit companies have infiltrated via government programs such as Medicare Advantage.
According to the report from Wendell Potter, a former insurance executive who now advocates for systemic healthcare reform, government programs are now the source of roughly 90% of the health plan revenues of Humana, Centene, and Molina.
Over the past decade, Potter found, the seven top for-profit insurance companies in the U.S.—the three mentioned above plus UnitedHealth, Cigna, CVS/Aetna, and Elevance—have seen their combined revenues from taxpayer-backed programs soar by 500%, reaching $577 billion in 2022 compared to $116.3 billion in 2012.
"The big insurers now manage most states' Medicaid programs—and make billions of dollars for shareholders doing so—but most of the insurers have found that selling their privately operated Medicare replacement plans is even more financially rewarding for their shareholders," Potter wrote. "In addition to their focus on Medicare and Medicaid, the companies also profit from the generous subsidies the government pays insurers to reduce the premiums they charge individuals and families who do not qualify for either Medicare or Medicaid or who work for an employer that does not offer subsidized coverage."
Potter noted that the top insurance giants, a group he dubbed the Big Seven, now control more than 70% of the Medicare Advantage market, which has grown rapidly in recent years. According to the Kaiser Family Foundation, more than 28 million people were enrolled in a privately run Medicare Advantage plan last year—nearly half of the Medicare-eligible population.
An ardent critic of Medicare Advantage, Potter said in an interview with The American Prospect on Monday that the program "is a big contributor to the excessive spending" in Medicare.
"It needs to be ended," Potter, executive director of the Center for Health and Democracy, said of Medicare Advantage, whose major players frequently overbill the federal government and deny patients necessary care. The program is run by private insurers with government money.
"The premiums and taxes paid by Americans enabled the Big Seven to make those profits."
In his analysis, Potter observed that Medicare Advantage enrollment among the Big Seven increased 252% between 2012 and 2022.
Having deeply entrenched themselves in the Medicare program via Medicare Advantage, insurance giants are now looking to gain a foothold in traditional Medicare through a Biden administration pilot program known as ACO REACH, which has drawn mounting criticism from physicians and progressive lawmakers.
"We must fight the privatization of Medicare with every tool we have," Rep. Pramila Jayapal of Washington, chair of the Congressional Progressive Caucus, said in a statement last month.
When counting both their commercial businesses and participation in government programs, the Big Seven brought in $1.25 trillion in revenue last year and their profits rose to $69.3 billion, according to Potter, who emphasized that a growing share of insurance giants' revenues now comes from "the relatively new and little-known middleman between patients and pharmaceutical drug manufacturers" known as pharmacy benefit managers (PBMs).
"Cigna now gets far more revenue from its PBM than from its health plans," Potter noted. "CVS gets more revenue from its PBM than from either Aetna's health plans or its nearly 10,000 retail stores."
\u201cThe premiums & taxes paid by Americans enabled the Big 7 to make those profits last year on revenues that reached a stunning $1.25 trillion (+300% since '12)\n\nThe main sources of all that money:\n\n1. Pharmacy benefit management (PBM)\n\n2. Gov't programs like Medicare Advantage (MA)\u201d— Wendell Potter (@Wendell Potter) 1677524849
Potter lamented that "policymakers, regulators, employers, and the media have so far shown scant interest" in closely examining the taxpayer-reliant business practices of large insurance companies, which wield substantial lobbying power that they deploy against any effort to transform the United States' fragmented healthcare system.
"They've essentially been bailed out by taxpayers," Potter said of for-profit insurance giants. "And members of Congress, and various administrations, have been just standing on the sidelines, not paying attention to what's been going on."
Meanwhile, tens of millions of people in the United States are either uninsured or inadequately insured, and more than 100 million are saddled with healthcare-related debt.
A recent study by The Commonwealth Fund found that the United States spent close to twice as much as the average OECD nation on healthcare while achieving worse outcomes in critical areas such as life expectancy at birth and death rates for treatable conditions.
The Jeff Bezos-owned newspaper sprinkled its coverage of an intensifying fight over Medicare with ads purchased by an organization that promotes private Medicare Advantage plans.
The Friday morning edition of The Washington Post's Health 202 newsletter featured coverage of the intensifying back-and-forth between the Biden administration and congressional Republicans over Medicare, with each side accusing the other of wanting to cut the program.
But the newspaper's ostensibly neutral, both-sides coverage of the high-stakes healthcare fight was interspersed with ads purchased by the Coalition for Medicare Choices, an innocuously named organization that serves as a front group for the private insurance industry's powerful lobbying group, America's Health Insurance Plans (AHIP).
The Post, owned by billionaire Jeff Bezos, states in the email version of its newsletter that the Friday coverage was "presented by" the Coalition for Medicare Choices, which bills itself as a "national grassroots organization" while acknowledging—in small font at the bottom of its website—that it's "powered by AHIP."
The large banner ad positioned at the top of the Post's newsletter features a senior accompanied by text that reads, "Don't Cut My Care."
The sidebar ad makes clear that the Coalition for Medicare Choices is concerned not about traditional Medicare, but about the finances of Medicare Advantage—a privately run program funded by the federal government.
The supposed "cut" highlighted by the ads refers to the Biden administration's 2024 payment plan for Medicare Advantage.
Insurance industry groups and their Republican allies in Congress claim that the payment proposal outlined by the Centers for Medicare and Medicaid Services (CMS) would result in a $3 billion cut to Medicare Advantage plans—a small fraction of large Medicare Advantage providers' annual revenues.
The Biden administration says the insurance industry and the GOP are "cherry-picking" numbers and insists the CMS plan would entail a limited increase, not a cut, in payments to Medicare Advantage plans, which are notorious for overbilling the federal government and denying patients necessary care. The federal government expects to pay more than $6 trillion to Medicare Advantage issuers over the next eight years.
CMS has also proposed a rule that would allow the federal government to claw back Medicare Advantage payments that were distributed improperly as a result of industry overbilling—a crackdown that the U.S. public overwhelmingly supports.
Republicans, who often conflate traditional Medicare and Medicare Advantage, have falsely described the new CMS rule as a Medicare Advantage cut.
"So-called 'Medicare Advantage' plans are not Medicare," Linda Benesch, communications director for the progressive advocacy group Social Security Works, told Common Dreams on Friday. "They are private plans run by corporations for the purpose of extracting as much money out of Medicare beneficiaries and the government as possible."
"Republicans, desperate to deflect from their own plans to cut Medicare, are claiming that limiting the annual increase in payments to these private plans is 'cutting Medicare,'" Benesch added. "Nothing could be further from the truth. By limiting the payments, the Biden administration is defending Medicare by slightly leveling the playing field between for-profit plans and actual Medicare. This is only a small first step. The Biden administration should do far more to regulate for-profit plans and protect Medicare beneficiaries."
Diane Archer, the president of Just Care USA and a senior adviser on Medicare at Social Security Works, added in a statement to Common Dreams that "to strengthen benefits and rein in costs for everyone with Medicare, President Biden and Kevin McCarthy should agree to end the tens of billions of dollars in overpayments to Medicare Advantage plans."
"The public strongly opposes this massive government waste and Medicare Advantage profiteering, as should policymakers on both sides of the aisle," Archer
"So-called 'Medicare Advantage' plans are not Medicare. They are private plans run by corporations for the purpose of extracting as much money out of Medicare beneficiaries and the government as possible."
It's hardly unusual for corporate media outlets in the U.S. to publish newsletters sponsored by business groups with a vested interest in the topic being covered, whether it's Medicare, drug prices, or Big Tech.
In October, the new media outlet Semafor sparked widespread derision and outrage by launching a climate newsletter sponsored by the oil giant Chevron, one of the world's biggest climate villains.
As The Levernoted in a 2021 look at the corporate-sponsored content of Punchbowl News and other publications, "These kinds of editorial choices are being made so frequently, they aren't even conscious decisions anymore—they are media culture."
"While it's not accurate to say there is an explicit newsroom quid pro quo in such editorial focus," the outlet continued, "it's also ridiculous to presume that all that cash from corporate sponsors has no influence at all."
The Coalition for Medicare Choices has been making use of the corporate media's embrace of sponsored content for years, placing its defenses of the fraud-riddled Medicare Advantage program and fearmongering about looming cuts in prominent outlets such as Politico.
In addition to touting the supposed benefits of Medicare Advantage, the insurance lobbying group that controls the coalition has lobbied aggressively against efforts to include hearing, dental, and vision coverage in traditional Medicare.
As The American Prospect's Robert Kuttner wrote in a column last week, "Medicare Advantage plans are popular and they are rapidly crowding out public Medicare" because they provide coverage that traditional Medicare doesn't, including hearing, dental, and vision.
Roughly half of the Medicare population was enrolled in a Medicare Advantage plan last year, according to the Kaiser Family Foundation.
"Despite the extra coverage ostensibly provided, studies have found that Medicare Advantage plans are more profitable than most other health insurance industry products, because of the opportunities they provide to game the system," Kuttner noted. "And that suggests that there is a much larger problem here that won’t be solved by a cat-and-mouse game of more aggressive audits—creeping privatization."
"Partial privatization insidiously leads to more privatization, leaving government to pay the added expense," he added. "Despite the promises of greater efficiency, it doesn't save costs but adds costs, as more money goes to industry middlemen and government has to spend more on monitoring... Medicare for All doesn't work if it includes privatized Medicare Advantage. Best to keep public programs public."