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Despite Proven Fraud, Trump to Boost Payments to Privatized Medicare Advantage by $25 Billion
"Privatized Medicare plans are denying patients the care they need, while defrauding the government of billions a year," said one advocacy group. "Donald Trump is giving them even more taxpayer money."
Apr 08, 2025
The federal agency now headed by former television host Mehmet Oz announced Monday that it is substantially boosting payments to privately run Medicare Advantage plans, a boon for an industry notorious for overcharging taxpayers and denying patients necessary care.
The Centers for Medicare and Medicaid Services (CMS) said it is jacking up payments to Medicare Advantage (MA) plans by more than 5% for 2026—an increase of over $25 billion. That's more than double the increase proposed by the Biden administration.
Health insurance company stocks jumped in response to the news of the Trump administration's payment hike, with shares of UnitedHealth Group—the largest provider of Medicare Advantage plans—rising more than 6% following the CMS statement.
Oz, whom the Republican-controlled Senate confirmed in a party-line vote last week, previously reported holding tens of millions of dollars worth of stock in companies with interests before CMS, including UnitedHealth.
Social Security Works, a progressive advocacy group that campaigns against Medicare Advantage,
said Monday that "privatized Medicare plans are denying patients the care they need, while defrauding the government of billions a year."
"Trump is giving them even more taxpayer money," the group wrote on social media. "Trump-Musk don't care about 'efficiency.' They care about stealing our money."
"Medicare Advantage is wasteful and inefficient relative to traditional Medicare and everyone knows it."
One industry analyst, Chris Meekins of the financial services firm Raymond James, told Axios that the payment boost for Medicare Advantage "leads one to believe that DOGE"—the Elon Musk-led advisory commission also known as the Department of Government Efficiency—"does not care about MA."
Healthcare writer Natalie Shure
called the payment increase a clear "illustration that this administration's goal is upward wealth distribution and the dismantling of public goods, not 'efficiency.'"
"Medicare Advantage is wasteful and inefficient relative to traditional Medicare," Shure added, "and everyone knows it."
The CMS announcement came weeks after Oz told Sen. Elizabeth Warren (D-Mass.) during his confirmation hearing that he is concerned about and prepared to "go after" Medicare Advantage upcoding, the practice of making patients appear sicker than they actually are to reap larger government payments.
The Wall Street Journal reported Monday that the Trump administration did opt to "stick with a Biden administration policy change that limits certain billing practices that have boosted payments to Medicare Advantage insurers," despite industry objections to the policy.
But Oz's record, including his past support for a proposal dubbed "Medicare Advantage for All," has led watchdog groups to doubt that he intends to aggressively take on large-scale overpayments and fraud in the program. According to one estimate from 2023, Medicare Advantage plans are overcharging U.S. taxpayers by up to $140 billion a year.
Robert Weissman, co-president of Public Citizen, warned after his Senate confirmation that Oz will "seek to further privatize Medicare, increasing the risk that seniors will receive inferior care and further threatening the long-term health of the Medicare program."
"Dr. Oz is joining a team of snake oil salesmen and anti-science flunkies that have already shown disdain for the American people and their health," said Weissman.
In addition to Oz and Robert F. Kennedy Jr. at the Department of Health and Human Services, which oversees CMS, Trump appointed former Medicare Advantage lobbyist Don Dempsey as associate director for health at the Office of Management and Budget, another signal that the administration intends to be an ally to the MA industry.
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UnitedHealth Exemplifies How the Industry Prioritizes Profit Over Care
The provider has—for good reason—become the most powerful lightning rod for patient and medical staff critiques of how private insurers operate.
Feb 01, 2025
Healthcare is big business in the United States. So big it can be hard to wrap your head around.
America’s largest healthcare company, the UnitedHealth Group, pulled in over $100 billion in revenue in just the fourth quarter of 2024 alone. For the full year, the giant’s insurance division, UnitedHealthcare, just reported record revenue of $298.2 billion.
These staggering revenue totals actually fell below investor expectations. Right after the announcement, UnitedHealth Group shares slipped 6% on the New York Stock Exchange.
The outpouring of anger after the December killing of UnitedHealthcare CEO Brian Thompson—anger not at the shooting but at the company Thompson represented—shows just how many Americans are currently suffering under our privatized healthcare system.
That tells you a lot about what’s important in the healthcare industry: profit, not care. Health insurance companies in particular can only profit by paying out less in claims than they collect in premiums. And that means denying patients coverage for the care they need.
Just outside the New York Stock Exchange, victims of our for-profit healthcare system—doctors and patients alike—recently braved freezing temperatures to call out the suffering that engineered UnitedHealth’s exorbitant earnings.
One of those demonstrators, Jenn Coffey, has been battling complex regional pain syndrome (CRPS), a condition so incredibly painful that it’s often called the “suicide disease.”
UnitedHealth denied her the prior authorization needed to have her critically important treatment adequately covered. “UnitedHealthcare would rather leave me in torture than grant me the peace my infusions bring,” says Coffey. “I’m asking for a life worth dignity. I’m left begging for a life worth living.”
Several other speakers shared their deeply personal experiences with a healthcare system that far too often treats patients as disposable.
Dr. Toutou Moussa Diallo, a New York-based researcher and healthcare activist, detailed how insurance denials led to subpar treatment for his broken ankle that only made the initial injury more debilitating. Nephrologist Cheryl Kunis shared the story of a patient who died after UnitedHealthcare refused to cover a PET scan of a malignant neck tumor.
These experiences amount to much more than isolated one-off incidents. The outpouring of anger after the December killing of UnitedHealthcare CEO Brian Thompson—anger not at the shooting but at the company Thompson represented—shows just how many Americans are currently suffering under our privatized healthcare system.
The ongoing campaign protesting how UnitedHealth does business began well before Thompson’s headline-grabbing killing. The Care Over Cost mobilization, led by People’s Action, has been organizing rallies protesting America’s biggest private insurers for years.
UnitedHealth has—for good reason—become the most powerful lightning rod for patient and medical staff critiques of how private insurers operate. The company’s gargantuan profits rest on decisions that regularly exploit patients at every opportunity.
Just a few snippets from recent news accounts offer a vivid picture about how UnitedHealth goes about making its billions.
UnitedHealth Group’s pharmacy benefit manager, Optum RX, marked up some cancer treatments by over 1,000%. UnitedHealthcare systematically limited access to critical treatments for children with autism to cut costs. And along with two other insurers, the company intentionally denied nursing care to patients covered by Medicare Advantage—all to maximize profit.
And how has the UnitedHealth Group been spending all its ill-gotten gains? One telling stat: UnitedHealth Group CEO Andrew Witty pocketed an astonishing $23.5 million in 2023 compensation.
As the rally in front of the New York Stock Exchange ended, protesters called on UnitedHealthcare to publicly release its claim denial rates, oppose federal tax cuts that would result in Medicaid service reductions, and end the company’s care-denying prior authorization requirements.
Those eminently reasonable demands for the company. Meanwhile, the rest of us should consider whether we want healthcare to be a tool for the public good—or just private profit.
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Huge Administrative Waste Makes Clear For-Profit Insurance Is 'Actually Very Bad': Analysis
"It is totally fair for people to identify private insurers as the key bad actor in our current system," writes Matt Bruenig of the People's Policy Project. "The quicker we nationalize health insurance, the better."
Dec 10, 2024
Last week's murder of UnitedHealthcare CEO Brian Thompson brought to the surface a seething hatred of the nation's for-profit insurance system—anger rooted in the industry's profiteering, high costs, and mass care denials.
But that response has led some pundits to defend private insurance companies and claim that, in fact, healthcare providers such as hospitals and doctors are the real drivers of outlandish U.S. healthcare costs.
In an analysis published Tuesday, Matt Bruenig of the People's Policy Project argued that defenders of private insurers are relying on "factual misunderstandings and very questionable analysis" and that it is reasonable to conclude that the for-profit insurance system is "actually very bad."
"From a design perspective, the main problem with our private health insurance system is that it is extremely wasteful," Bruenig wrote, estimating based on existing research that excess administrative expenses amount to $528 billion per year—or 1.8% of U.S. gross domestic product.
"All healthcare systems require administration, which costs money, but a private multi-payer system requires massively more than other approaches, especially the single-payer system favored by the American left," Bruenig observed, emphasizing that excess administrative expenses of both the insurance companies and healthcare providers stem from "the multi-payer private health insurance system that we have."
He continued:
To get your head around why this is, think for a second about what happens to every $100 you give to a private insurance company. According to the most exhaustive study on this question in the U.S.—the CBO single-payer study from 2020—the first thing that happens is that $16 of those dollars are taken by the insurance company. From there, the insurer gives the remaining $84 to a hospital to reimburse them for services. That hospital then takes another $15.96 (19% of its revenue) for administration, meaning that only $68.04 of the original $100 actually goes to providing care.
In a single-payer system, the path of that $100 looks a lot different. Rather than take $16 for insurance administration, the public insurer would only take $1.60. And rather than take $15.96 of the remaining money for hospital administration, the hospital would only take $11.80 (12% of its revenue), meaning that $86.60 of the original $100 actually goes to providing care.
High provider payments, which some analysts have suggested are the key culprit in exorbitant healthcare costs, are also attributable to the nation's for-profit insurance system, Bruenig argued.
"Medicaid and Medicare are able to negotiate much lower rates than private insurance, just as the public health insurer under a single-payer system would be able to. It is only within the private insurance segment of the system that providers have been able to jack up rates to such an extreme extent," he wrote. "Given all of this, I think it is totally fair for people to identify private insurers as the key bad actor in our current system. They are directly responsible for over half a trillion dollars of administrative waste and (at the very least) indirectly responsible for the provider rents that are bleeding Americans dry."
"The quicker we nationalize health insurance," he concluded, "the better."
Bruenig's analysis comports with research showing that a single-payer system such as the Medicare for All program proposed by Sen. Bernie Sanders (I-Vt.), Rep. Pramila Jayapal (D-Wash.), and other progressives in Congress could produce massive savings by eliminating bureaucratic costs associated with the private insurance system.
One study published in the Annals of Internal Medicine in January 2020 estimated that Medicare for All could save the U.S. more than $600 billion per year in healthcare-related administrative costs.
"The average American is paying more than $2,000 a year for useless bureaucracy," said Dr. David Himmelstein, lead author of the study, said at the time. "That money could be spent for care if we had a Medicare for All program."
Deep-seated anger at the systemic and harmful flaws of the for-profit U.S. insurance system could help explain why the percentage of the public that believes it's the federal government's responsibility to ensure all Americans have healthcare coverage is at its highest level in more than a decade, according to Gallup polling released Monday.
"There's a day of reckoning that is happening right now," former insurance industry executive Wendell Potter, president of the Center for Health and Democracy, said in an MSNBC appearance on Monday. "Whether we're talking about employers, patients, doctors—just about everybody despises health insurance companies in ways that I've never seen before."
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