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DR. OZ AND THE STEALTH DESTRUCTION OF MEDICARE  
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Robert Kuttner
November 26, 2024
The American Prospect
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_ The TV doctor’s scams and fake cures are the least of what makes
him so dangerous as Trump’s appointee to head Medicare and Medicaid.
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Former TV doctor Mehmet Oz is Donald Trump’s nominee to head the
Centers for Medicare & Medicaid Services., Matt Rourke/AP Photo

 

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
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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
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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
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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
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than what it would have paid to cover the same enrollees under
standard public Medicare.

In 2022, physicians submitted more than 46 million
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prior authorization requests to Medicare Advantage plans. According to
the American Medical Association, in 2023, physicians submitted an
average of 45 requests per week
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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
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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
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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
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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.

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

* Dr. Mehmet Oz; Project 25; Medicare; Medicare Advantage;
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