Despite Proven Fraud, Trump to Boost Payments to Privatized Medicare Advantage by $25 Billion

The federal agency now headed by former television host Mehmet Oz announced Monday that it is substantially boosting payments to privately run Medicare Advantage plans, a boon for an industry notorious for overcharging taxpayers and denying patients necessary care.

The Centers for Medicare and Medicaid Services (CMS) said it is jacking up payments to Medicare Advantage (MA) plans by more than 5% for 2026—an increase of over $25 billion. That's more than double the increase proposed by the Biden administration.

Health insurance company stocks jumped in response to the news of the Trump administration's payment hike, with shares of UnitedHealth Group—the largest provider of Medicare Advantage plans—rising more than 6% following the CMS statement.

Oz, whom the Republican-controlled Senate confirmed in a party-line vote last week, previously reported holding tens of millions of dollars worth of stock in companies with interests before CMS, including UnitedHealth.

Social Security Works, a progressive advocacy group that campaigns against Medicare Advantage, said Monday that "privatized Medicare plans are denying patients the care they need, while defrauding the government of billions a year."

"Trump is giving them even more taxpayer money," the group wrote on social media. "Trump-Musk don't care about 'efficiency.' They care about stealing our money."

"Medicare Advantage is wasteful and inefficient relative to traditional Medicare and everyone knows it."

One industry analyst, Chris Meekins of the financial services firm Raymond James, toldAxios that the payment boost for Medicare Advantage "leads one to believe that DOGE"—the Elon Musk-led advisory commission also known as the Department of Government Efficiency—"does not care about MA."

Healthcare writer Natalie Shure called the payment increase a clear "illustration that this administration's goal is upward wealth distribution and the dismantling of public goods, not 'efficiency.'"

"Medicare Advantage is wasteful and inefficient relative to traditional Medicare," Shure added, "and everyone knows it."

The CMS announcement came weeks after Oz told Sen. Elizabeth Warren (D-Mass.) during his confirmation hearing that he is concerned about and prepared to "go after" Medicare Advantage upcoding, the practice of making patients appear sicker than they actually are to reap larger government payments.

The Wall Street Journalreported Monday that the Trump administration did opt to "stick with a Biden administration policy change that limits certain billing practices that have boosted payments to Medicare Advantage insurers," despite industry objections to the policy.

But Oz's record, including his past support for a proposal dubbed "Medicare Advantage for All," has led watchdog groups to doubt that he intends to aggressively take on large-scale overpayments and fraud in the program. According to one estimate from 2023, Medicare Advantage plans are overcharging U.S. taxpayers by up to $140 billion a year.

Robert Weissman, co-president of Public Citizen, warned after his Senate confirmation that Oz will "seek to further privatize Medicare, increasing the risk that seniors will receive inferior care and further threatening the long-term health of the Medicare program."

"Dr. Oz is joining a team of snake oil salesmen and anti-science flunkies that have already shown disdain for the American people and their health," said Weissman.

In addition to Oz and Robert F. Kennedy Jr. at the Department of Health and Human Services, which oversees CMS, Trump appointed former Medicare Advantage lobbyist Don Dempsey as associate director for health at the Office of Management and Budget, another signal that the administration intends to be an ally to the MA industry.