As discussed in another CMA Alert article today Medicaid is under grave threat by a reconciliation process in Congress aimed at cutting spending in order to pay for tax cuts and other administration priorities. As discussed below, some lawmakers are urging Congressional leadership to instead focus on wasteful Medicare Advantage overpayments. Meanwhile, there appear to be efforts underway by the administration to accelerate the privatization of the Medicare program by shifting more people into Medicare Advantage (MA) plans, as outlined in opinion piece published in MarketWatch jointly drafted by the Center for Medicare Advocacy and the Center for American Progress. Also, as outlined in an opinion piece in MedPage Today, there is an inherent tension between insurance company share prices and control over coverage of care.
Congressional Letters re: MA Overpayments
In the midst of a heated debate about the future of Medicaid, over 40 members of Congress wrote letters to Congressional leadership urging them to instead seek savings through wasteful overpayments to MA plans. As noted in a press release titled “Warren, Wyden, Doggett, Schakowsky Push Congressional Leadership to Reject Medicaid Cuts, Crack Down on Medicare Advantage Upcoding” (May 8, 2025) which highlights a letters from the House and Senate:
‘As Congress considers reconciliation legislation, we urge you to reject cuts to Medicaid, which are deeply unpopular and will rip away health care from millions of Americans,’ wrote the lawmakers. ‘Where there is widespread agreement is the need to address waste, fraud, and abuse by private, for-profit insurance companies. We write to urge you to crack down on the growing threat to the Medicare program known as ‘upcoding.’
The press release goes on to describe upcoding “the practice by which private insurers in Medicare Advantage exaggerate the medical diagnoses of their enrollees to secure higher payments from the federal government. This results in wasteful spending in Medicare, overcharging seniors and taxpayers while adding tens of billions in costs to the federal government.” The Center for Medicare Advocacy was among the organizations endorsing these letters.
MA Default Enrollment
MarketWatch recently published an article titled “Opinion: Trump could saddle seniors with a costly Medicare Advantage plan — whether they like it or not” by Andrea Ducas (Center for American Progress) and David Lipschutz (Center for Medicare Advocacy) (May 6, 2025). The article outlines the dangers of implementing a Project 2025 proposal to make Medicare Advantage the default enrollment for beneficiaries, along with other efforts to push people towards MA and away from traditional Medicare.
The Business of Health Care
A recent opinion piece published by MedPage Today titled “What UnitedHealth’s Stock Drop Reveals About Medicare Advantage” by N. Adam Brown (April 29, 2025) discusses how UnitedHealth Group’s share price recently plummeted due to enrollees using more health care. Quoting the company’s CEO who suggested that while the drop in stock value was “‘unusual and unacceptable’” the problem was fixable, Brown states:
His word choice says everything. When you break it down, he seems to imply that patients accessing care is a problem — a cost that hinders company performance. Witty indirectly acknowledged what we all know but is antithetical to making America healthy again: insurers are rewarded when care is avoided, delayed, or denied. When customers visit the doctor, undergo diagnostic tests, or access specialist care, insurers get worried because their profitability begins to decline.
Noting that UnitedHealth Group reported $6.3 billion in profit in the first quarter of 2025, largely due to its Medicare Advantage business, Brown raises the “tension […] at the heart of Medicare Advantage”:
While insurers tout extra benefits beyond traditional Medicare, such as gym memberships and care coordination, the financial model only works when care utilization stays within predefined boundaries. The moment patients stray beyond them to access more services, healthcare ceases to make financial sense for the insurer.
Insurers then face a choice: eat the cost or introduce new layers of control. And because these companies are publicly traded and beholden to shareholders, it is no surprise they usually choose the latter.
Brown ends his article by asking: “The question now is stark: do we want a healthcare system that treats care as a service? Or as a cost to be managed?”
May 8, 2025 – D. Lipschutz