This week by Dr. Mehmet Oz to a top health care post, President-elect Donald Trump didn’t just add a TV star to his team — he picked a vocal champion for expanding the private sector’s role in Medicare.
On Tuesday, Trump announced he would tap the daytime talk show host to lead the Centers for Medicare and Medicaid Services, the critical agency that oversees health care programs covering about 160 million Americans.
It was an unconventional choice for a role that typically goes to an experienced bureaucrat or policy expert familiar with CMS’ expansive portfolio, which in addition to Medicare and Medicaid, includes the Children’s Health Insurance Program and the Affordable Care Act marketplace. During his previous administration, Trump handed the job to Seema Verma, a conservative Obamacare critic who had helped shape several Medicaid programs as a policy adviser.
Oz is better known for his dubious medical advice, such as claims that dietary supplements can help prevent cancer, than for his views on insurance. However, he has long been a staunch supporter of Medicare Advantage, the popular but controversial federal program that allows seniors to purchase private coverage as an alternative to traditional fee-for-service Medicare.
“Given his prior track record, I assume this will be a fairly favorable environment for Medicare Advantage,” said Matthew Fiedler, a senior fellow at the Brookings Institution’s Center on Health Policy.
On his hit show, Oz has often hosted segments sponsored by Medicareadvantage.com, a commercial website that helps customers find coverage. In a spot he posted to his YouTube channel in August, he told viewers they could qualify for plans with $0 premiums and benefits like free hearing aids, before bringing in one of the company’s insurance agents to to go through more details.
“Everyone around you signs up!” he informed the audience, before finally urging them to call a toll-free number.
As the COVID pandemic raged in 2020, Oz co-authored a Forbes article outlining a universal health insurance proposal they called “Medicare Advantage for All.” It would have essentially moved all Americans who did not have a Medicaid plan into private Medicare plans, funded with a 20% payroll tax.
Oz was less specific about his policy views during his failed Senate run in Pennsylvania in 2022. But he again pledged to expand Medicare Advantage. The “plans are popular among seniors, consistently provide quality care and have a necessary incentive to keep costs down,” he told AARP.
Currently, 54% of all Medicare enrollees are enrolled in private Advantage plans. The coverage is attractive to many seniors because it often offers lower premiums and benefits such as dental and hearing coverage that traditional Medicare cannot legally provide, as well as perks such as free gym membership.
But the plans also have drawbacks: They offer more limited physician networks, which can be challenging for older patients, and require prior authorization for some treatments, which can lead to denials of coverage.
Republicans have long sought to expand Medicare Advantage, arguing that it offers customers more choice and works more efficiently than the traditional program, in part by limiting unnecessary health care spending. But critics argue that insurers make their profits by singling out healthier seniors and denying many legitimate treatment requests, likely “preventing or delaying medically necessary care,” as a 2022 inspector general report put it.
Some conservatives have proposed sweeping changes that would give Medicare Advantage an edge. For example, in its Project 2025 report, the Heritage Foundation advocated making the program the default insurance option for seniors. Such a change would likely require new legislation, Brookings’ Fiedler said, although the Trump administration could potentially try to use its regulatory powers to implement a small pilot version of the idea.
For his part, Oz could potentially use his role at CMS to expand Medicare Advantage at the margins and potentially improve insurers’ bottom lines.
One lever he could use is rules around the advertising that floods seniors’ mailboxes and TV screens during each open enrollment period. CMS has an effective veto over which spots can run, and the Biden administration led an aggressive crackdown on deceptive marketing practices, rejecting about a third of proposed ads last year while implementing stricter rules. Oz, a pitcher himself, could theoretically take a looser approach.
“CMS currently has significant oversight over how Medicare Advantage plans conduct their marketing activities, and that has important implications for the program’s continued growth,” Joe Albanese, senior policy analyst at Paragon Health, told Yahoo Finance.
At CMS, Oz will also oversee the annual rate-setting process that determines how much Advantage plans are paid for each customer they sign up, which he could use to “sweeten the pot” for companies, said Tricia Neuman, executive director of the program. on Medicare policy at the Kaiser Family Foundation.
There are growing concerns in Washington about the costs of Medicare Advantage, thanks to studies showing that the government now spends more per enrollee than it does on comparable customers in traditional Medicare, partly due to the way insurers game the payment system. The Committee for a Responsible Federal Budget estimated in 2023 that the government could overpay insurers in the program $810 billion to $1.6 trillion over the next decade, which will put greater strain on the Medicare trust fund and is likely to lead to higher premiums on the traditional side of the program.
The Biden administration has taken some modest regulatory steps to address the cost problem. This year, it cut base pay for Medicare Advantage plans by 0.16% — a move that caused an industry uproar and led Republicans in Congress to accuse the president of trying to “destroy” the program. (The administration noted that insurers would still get a pay increase after adjusting for the health of their customers.)
In his post on Truth Social announcing Oz’s selection, Trump said Oz would reduce “waste and fraud in our most expensive government agency.” But health care experts said they were skeptical that these efforts would touch Medicare Advantage, given Oz’s desire to expand the program and the Republican Party’s reactions to Biden’s cuts.
“I don’t think there will be much interest from Republicans in Congress or the administration in addressing these overpayments,” Kaiser’s Neuman said. “But that comes at the expense of Medicare.”
While expanding Medicare Advantage could put pressure on Medicare’s finances in the long term, that approach could make many seniors happier in the short term because it could mean more benefits in their plans.
“If plans are paid more, that appears to result in more generous benefits for Medicare Advantage participants,” says Brookings’ Fiedler.
Jordan Weissmann is a senior reporter at Yahoo Finance.
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