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A $1.2 Trillion ‘Rip Off’: Report Spotlights Massive Scale of Medicare Advantage Fraud
"These private insurer-run plans are more expensive AND lead to worse outcomes for patients," said Rep. Pramila Jayapal. "It’s time to rein in Medicare DisAdvantage and protect traditional Medicare."
Jan 28, 2026
A report released earlier this month to little fanfare estimated that federal overpayments to privately run Medicare Advantage plans could total $76 billion this year—or potentially a staggering $1.2 trillion over the next decade if current trends persist.
The Medicare Payment Advisory Commission (MedPAC), an independent congressional agency that advises lawmakers on Medicare, calculates overpayments by comparing spending on Medicare Advantage (MA) plans to what the federal government would have spent if MA enrollees were on traditional fee-for-service Medicare.
In a report published earlier this month, MedPAC showed that overpayments to MA plans this year are projected to be around $76 billion. Roughly $22 billion of that total is due to coding practices by MA providers, which are notorious for making patients appear sicker than they are to receive larger payments from the federal government. MA plans are paid lump sums to cover expected future healthcare services for patients based on their risk scores.
Another factor driving overpayments to MA plans—which now cover 55% of eligible Medicare beneficiaries—is a phenomenon known as favorable selection. MA enrollees tend to be healthier on average than recipients of traditional Medicare, resulting in higher payments to Medicare Advantage plans than are necessary based on patients' healthcare needs.
According to MedPAC, favorable selection will account for $57 billion of the expected overpayments to MA plans this year. The Trump administration gave Medicare Advantage plans a more than $25 billion boost in federal payments for 2026, even amid mounting bipartisan concerns about fraud in the program.
The National Committee to Preserve Social Security and Medicare (NCPSSM) said the MedPAC analysis "confirms that these private plans are bleeding taxpayers for billions of dollars more than traditional Medicare would cost for comparable enrollees."
US Rep. Pramila Jayapal (D-Wash.) wrote in response to the MedPAC findings that "Medicare DisAdvantage will rip off American taxpayers to the tune of $76 billion in 2026."
"These private insurer-run plans are more expensive AND lead to worse outcomes for patients," Jayapal, a leading supporter of Medicare for All legislation in the House, wrote in a social media post. "It’s time to rein in Medicare DisAdvantage and protect traditional Medicare."
The MedPAC analysis was released days after Republicans on the Senate Judiciary Committee published a report revealing how UnitedHealth Group, the largest provider of MA plans in the US, "has turned risk adjustment into a major profit-centered strategy," reaping massive payments from the federal government through upcoding.
NCPSSM noted that "while UnitedHealth... has emerged as the worst offender, it’s abundantly clear that many MA insurers are engaged in these shady practices."
"Look no further than insurers’ reliance on prior authorizations for procedures and treatments that normally would be automatically covered in traditional Medicare," the group said. "This includes denying skilled nursing care that jeopardizes older patients who have nowhere else to turn."
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If Trump Really Cared About Fraud in Minnesota, Critics Say, He Would Go After UnitedHealth
"Most of the perpetrators are lodged within large corporations run by white executives with excellent and expensive legal representation," wrote one journalist.
Jan 28, 2026
US President Donald Trump has used unsubstantiated allegations of large-scale fraud in Minnesota's Somali community as a pretext to surge federal agents into the state—with deadly consequences—and cut off federal childcare funding.
But unlike the Somali community, which Trump has subjected to grotesque attacks that have left many fearing for their safety, Minnesota-based UnitedHealth Group (UHG) has not faced the president's public ire.
One of the nation's largest for-profit health insurance companies, UHG is the leading beneficiary of a long-running Medicare Advantage fraud scheme that could cost US taxpayers $1.2 trillion over the next decade—a sum that dwarfs even the White House's wildest claims about the costs of fraud allegedly committed by Somali-run daycares.
The $1.2 trillion estimate comes from a report published earlier this month by the Medicare Payment Advisory Commission (MedPAC), which found that federal overpayments to privately run, publicly funded Medicare Advantage plans will total around $76 billion this year in part due to a practice known as upcoding, whereby insurers present patients as sicker than they actually are to reap larger payments.
UnitedHealthcare, UHG's insurance division, is the leading Medicare Advantage provider in the United States. Stephen Hemsley, UnitedHealth Group's CEO, received a base salary of $1 million last year and a one-time equity award worth $60 million.
ICE/CBP swarms into Minnesota to crack down on government fraud. Somehow they sidestep the orders-of-magnitude higher government fraud by Minnesota-based UnitedHealth, who leads a Medicare Advantage fraud that government analyst MedPac estimates as costing America $76 billion/yr pic.twitter.com/dECnwgUCRV
— David Dayen (@ddayen) January 27, 2026
A Senate report released on January 12 found that UnitedHealth Group uses "aggressive strategies" to maximize patients' so-called "risk-adjustment scores" in an effort to receive larger Medicare Advantage payments from the federal government.
"UHG has turned risk adjustment into a major profit-centered strategy, which was not the original intent of the program," states the report, which was based on more than 50,000 pages of company documents obtained by the Senate Judiciary Committee.
The Senate report cited a 2024 Wall Street Journal investigation showing that "insurer-driven diagnoses by UnitedHealth for diseases that no doctor treated generated $8.7 billion in 2021 payments to the company... UnitedHealth’s net income that year was about $17 billion."
"A real crackdown on fraud would go after those big fish first."
While the US Justice Department—headed by former corporate lobbyist Pam Bondi—is currently investigating UnitedHealth Group over its Medicare billing practices, the Trump administration has enabled the conglomerate's continued expansion and abuses.
Last August, the DOJ settled a Biden-era legal challenge aimed at preventing UnitedHealth Group from absorbing yet another competitor. According to a tracker run by the American Economic Liberties Project, the corporation is still denying necessary care to patients, overbilling the federal government, and engaging in anticompetitive behavior on the Trump administration's watch.
Journalist Merrill Goozner wrote last week that "there is no doubt greedy operators ripped off Minnesota safety net programs," observing that "several of the nearly 100 people under investigation have already pleaded guilty."
"But if federal officials in Minnesota really want to go after industrial-scale fraud, they ought to step up their slow-motion investigation of UnitedHealth Group," Goozner wrote. "The nation’s tattered social safety net, under assault by the Trump administration and shrinking daily, remains prone to abuse by unscrupulous operators. Medicare and Medicaid are especially juicy targets. Most of the perpetrators are lodged within large corporations run by white executives with excellent and expensive legal representation."
"A real crackdown on fraud," he added, "would go after those big fish first."
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Insurance CEO Testimony ‘Made Case for Medicare for All Better Than Almost Anyone'
"Under Medicare for All, these insurance vultures who profit from the suffering of everyday Americans would all be out of a job—bringing down costs across the health system—which should be reason enough to support it," said one advocate.
Jan 23, 2026
If you want a compelling case for Medicare for All, just listen to the ultra-rich CEOs of the insurance companies profiting off the United States' disastrous for-profit status quo.
That was Public Citizen healthcare policy advocate Eagan Kemp's takeaway from congressional testimony delivered Thursday by the top executives of UnitedHealth Group, Cigna, Aetna owner CVS Health, Elevance, and Ascendiun, some of the largest beneficiaries of a system under which millions of Americans face massive costs, care denials, and labyrinthine administrative hurdles.
"In both of today’s House hearings, health insurance executives’ devil-may-care attitude towards Americans’ health made the case for Medicare for All better than almost anyone I have ever seen," Kemp said in a statement following the hearings held by the House Ways and Means Committee and the House Energy and Commerce Committee's healthcare panel.
"Rarely has there been a more feckless, uncaring, and unsympathetic group of paper pushers," said Kemp. "Under Medicare for All, these insurance vultures who profit from the suffering of everyday Americans would all be out of a job—bringing down costs across the health system—which should be reason enough to support it. We need Medicare for All to finally put us on par with every other comparably wealthy country by guaranteeing everyone in the U.S. can get the health care they need, throughout their lives."
The executives faced angry grilling from both Democrats and Republicans during Thursday's hearings, which came as health insurance premiums are skyrocketing due to the GOP's refusal to extend Affordable Care Act (ACA) subsidies that lapsed at the end of 2025.
"Do you understand why the American people are not a fan of UnitedHealthcare and big healthcare companies?" Rep. Nanette Barragán (D-Calif.) asked UnitedHealth Group CEO Stephen Hemsley, telling the story of a 3-year-old girl whose family was forced to take on more than $1 million in medical debt and declare bankruptcy because the insurance giant would not cover doctors' recommended treatment for a tumor in her bladder.
Rep. Greg Murphy (R-NC), who recently underwent brain surgery, told the insurance executives that he faced eight care denials for necessary medication.
"You have put profits above patients, and you have put profits above those who care for patients," said Murphy, a physician. "If it were up to me, I would throw out all for-profit systems in this country and turn everybody into nonprofit. It has gotten that bad."
"If I had my way, I'd turn all of you guys into dust," he added. "We'd start back from scratch."
The @WaysandMeansGOP held a hearing on the impact of rising health care costs on patients and families.
We have to have serious reform of health insurers, pharmacy benefit managers, and their subsidiaries to reduce the cost of healthcare. pic.twitter.com/pQEE4WgQtk
— Congressman Greg Murphy, M.D. (@RepGregMurphy) January 22, 2026
The insurance executives attempted to shift the blame for high costs and other systemic issues onto hospitals, doctors, and pharmaceutical companies, while offering Band-Aid solutions.
UnitedHealth Group's CEO pledged during his testimony to return its 2026 Affordable Care Act profits to consumers in the form of rebates.
"If you’re feeling a little misty-eyed about this sudden burst of corporate altruism, let me save you the trouble. This isn’t a moral awakening. It’s a PR maneuver and narrative control being implemented in real-time," said Wendell Potter, a former health insurance executive who now supports Medicare for All, which would virtually eliminate private insurance and provide comprehensive health coverage for everyone in the US for free at the point of service, for a lower overall cost than the for-profit status quo.
"UnitedHealth’s pledge is just a long, desperate PR pass into the end zone, praying lawmakers and reporters will focus on the gesture instead of the business model that allows them to gobble up those dollars in the first place," Potter added. "This isn’t a gift. It’s a distraction."
Kemp of Public Citizen said Thursday that “in the short term, the Senate must pass a clean three-year extension of the enhanced ACA premium tax credits to address runaway premium increases for millions of Americans."
"In the long run," he added, "we must continue building the movement that will pass Medicare for All and make it the law of the land."
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