Portside

During the 2024 campaign, Trump and his surrogates went out of their way to claim that they had no plans to cut Medicare. But they do have plans to destroy Medicare by stealth. They’ll do this by changing the rules.

A key part of that strategy is to expand the private Medicare Advantage program and push more and more Medicare recipients into it, leading to a death spiral of traditional public Medicare. The details are spelled out in the Project 2025 blueprint.

Despite Trump’s denials of any knowledge of Project 2025, one of its prime authors, Russell Vought, is Trump’s nominee to head the Office of Management and Budget. Unlike several of Trump’s cabinet clowns, Vought is all too competent. More on that in a moment.

Dr. Mehmet Oz is a big booster of that strategy—and now, Trump’s appointee to head Medicare and Medicaid. On his now-defunct TV show, The Dr. Oz Show, he repeatedly touted Medicare Advantage. Disclosures later showed, during his failed campaign for a Pennsylvania Senate seat in 2022, that Oz owned $600,000 of stock in two of the largest Medicare Advantage sponsors, UnitedHealth Group and CVS/Aetna.

Oz has not gotten as much attention as Trump’s clownishly unqualified cabinet appointees such as RFK Jr. and Tulsi Gabbard. He has gotten some negative attention for other conflicts of interest in his use of his TV show to promote quack remedies in which he had a financial interest. But that pales alongside the damage that he could do to Medicare.

The only good thing about the Oz nomination to head the Centers for Medicare & Medicaid Services (CMS) is that the confirmation hearings will give senators a chance to shine a spotlight on the scheme to destroy public Medicare.

Medicare Advantage is the misleading name for a wholly private product that uses Medicare payments to operate heavily managed insurance plans for older Americans who otherwise qualify for Medicare. The program and its predecessor, called Medicare Plus Choice, was first enacted by Congress in 1997 and then broadened and rebranded as Medicare Advantage in 2003.

As the Prospect has explained, Medicare Advantage markets itself as covering health needs, such as prescription drugs, that are not covered by conventional Medicare. But while Medicare Advantage plans offer comprehensive coverage in principle, in practice they restrict the choice of doctor and hospital and often deny medically necessary care. As investigations by the HHS Office of Inspector General have repeatedly shown, Medicare Advantage plans are notorious for engaging in illegal upcoding, bilking the Medicare program of hundreds of billions of dollars.

Even without upcoding, the payment formulas are rigged in favor of Medicare Advantage. The Medicare Payment Advisory Commission, an independent congressional agency that advises Congress, found that in 2024 alone, Medicare will pay MA plans at least $83 billion more than what it would have paid to cover the same enrollees under standard public Medicare.

In 2022, physicians submitted more than 46 million prior authorization requests to Medicare Advantage plans. According to the American Medical Association, in 2023, physicians submitted an average of 45 requests per week. But this intense management did not lead to better health outcomes. Mainly, it provided Medicare Advantage plans with pretexts for increasing profits by denying care.

At present, about half of all Medicare-eligible people are in Medicare Advantage plans because of the industry’s relentless marketing. Often, people who are denied coverage by Medicare Advantage eventually decide to switch to traditional Medicare, which provides free choice of doctor and hospital and doesn’t require preapproval of treatments, in the way Medicare Advantage plans do.

In order for coverage to be complete under traditional Medicare, it’s necessary to purchase a supplemental so-called “Medigap” policy. But thanks to insurance industry lobbying, only four states guarantee people who leave Medicare Advantage plans for traditional Medicare the right to buy Medigap policies. The rest either flatly deny that right or require waiting periods and other roadblocks.

Here’s where the story gets truly sinister. Project 2025 has an extensive blueprint for weakening traditional Medicare in favor of Medicare Advantage. It begins by proposing to make Medicare Advantage the “default option” for new Medicare enrollees. It then proposes a variety of other technical changes to give Medicare Advantage even less government supervision and more marketing advantages.

While insurance companies don’t want relatively healthy seniors to leave Medicare Advantage plans, they are happy to let old and sick ones move to conventional Medicare. As people with complex conditions are denied care by Medicare Advantage, this begins a kind of death spiral of adverse selection in which the most costly patients are in conventional Medicare, which then reinforces the fake story that Medicare Advantage is more cost-effective.

In fact, Medicare Advantage costs on average 22 percent more per enrollee than conventional public Medicare. These private plans spend 13 percent of billed costs on administration and profits, compared to 2 percent on administration for conventional Medicare, which of course takes no profit. The Medicare trust funds are projected to run out of money by 2036 unless Congress acts. Herding seniors into Medicare Advantage plans will accelerate the program’s insolvency.

Project 2025’s plans for Medicare, seconded by Dr. Oz, will end Medicare as we know it, and leave seniors to the tender mercies of dishonest and debased private insurance plans. What’s insidious is that none of these changes require legislation. The best we can hope for is that the sunlight of exposure of these schemes will act as a disinfectant.

===

Robert Kuttner is co-founder and co-editor of The American Prospect, and professor at Brandeis University’s Heller School.