Is Medicare Being Privatized by Stealth?

By Julie Woodward

How much Congress will change Medicare in the final version of its Big Bill is unclear, but it’s already becoming harder for people on Medicare to find comprehensive coverage that balances cost, care preferences, and a sense of security.

As someone who has spent more than a decade leading free Medicare education workshops, I’ve seen just how overwhelming the system can be.

But the new heads of the Department of Health and Human Services and the Centers for Medicare and Medicaid Services may be more of an obstacle than a help.

Both Robert F. Kennedy Jr., the secretary of health and human services, and Dr. Mehmet Oz, administrator of the Centers for Medicare and Medicaid Services, appear determined to advance one of Project 2025’s proposals: making Medicare Advantage the default option for all new Medicare enrollees.

It’s possible that their current campaign to clean up the most problematic features of privatized health insurance is to make it easier for Congress to codify such a proposal into law.

For those unfamiliar with health insurance options for seniors, Medicare Advantage plans are sold by for-profit companies that manage Medicare billing and services in exchange for middleman compensation.

While these plans are favored by some for their comprehensive benefits, cheap or no-cost premiums and extras that Medicare doesn’t offer, patients are not so happy when Medicare-authorized services are unexpectedly denied and they have to go through hoops to get them. Insurance companies selling these plans also engage in anticompetitive practices (consolidation) and use upcoding to draw larger payments from the government, with no obligation to spend that extra money on patient care.  

Dr. Oz is an interesting combination of medical professional, showman, salesman and centimillionaire capitalist. He pushed Medicare Advantage plans for years on his TV show and invested heavily in the companies that sell them. 

He even co-authored a 2020 op ed touting “Medicare Advantage for All,” which is basically another way of privatizing the industry. It’s hard to believe that in just a few months he’s seen the light and is now willing to rein in the abusive strategies that have made billions for Advantage plan companies in the past.  

Launching their crusade against “waste, fraud and abuse,” Oz and his colleagues are now pledging to fix prior authorizations, red tape, and other management procedures that give Advantage plans a bad rap. But they remain very comfortable with the concept of for-profit health insurance, even though it is shareholder pressure that pushes companies to boost profits through unsavory mechanisms.

Asking investors to take their business elsewhere and leave healthcare to government administrators is not something they’d consider, and it’s obvious nothing much is being done at the moment to shore up traditional Medicare, the original fee-for-service program where no middlemen come between providers and CMS paymasters. 

Medicare Advantage, a delivery system that was formalized by an act of Congress in 1997, has certainly been normalized. A CMS newsletter I received the other day tells us that newly Medicare-eligible Dr. Oz will be launching videos to “help Americans navigate Medicare enrollment.” I found one that showed a very enthusiastic Oz publicizing a “dream team” of  Medicare experts who could help everyone get started. 

Surprisingly, basic traditional Medicare, the fee-for-service program created in 1965, isn’t mentioned at all, nor are the standardized Medigaps you can buy to pay for the leftover costs. Oz points to only one option:  the privatized structure, Medicare Advantage. 

He recommends visiting Medicare.gov – and while I agree it offers a wealth of useful information, the plan finder isn’t free of spin. At the top of a list of options you can explore Medicare Advantage. However, if you’re looking to get Medicare in its basic form, what you really need are the next two: drug plans and Medigaps. The plan finder has clearly been designed to favor Advantage plans over straight Medicare.

Obscuring CMS’s real agenda even further are the recommendations of brokers, who make a lot more money selling Advantage plans than Medigaps. Some don’t even mention Medigaps, because there’s no better way to steer people into privatized insurance than to downplay the basic choice – Original Medicare and a supplement.

There’s also a surprising confusion of terminology, particularly in high places.

RFK Jr. revealed a startling lack of understanding during his confirmation when he claimed that Medicaid enrollees were unhappy with their high premiums and deductibles – costs that Medicaid does not actually impose.

Was it a slip of the tongue or did he actually conflate Medicaid with Medicare?

Similarly, Dr. Oz was recently seen on Newsmax talking about fraud in Medicaid while running alongside him were pictures related to Medicare – the Medicare & You handbook Medicare healthcare cards. Was it a production mistake or intentionally deceptive?

The task of sorting out Medicare coverage is really overwhelming, but it seems the heads of DHHS and CMS might not have our well-being as their primary goal. 

If we don’t demand otherwise, Congress may very well end up undoing Original Medicare altogether and letting for-profit entities decide what services we receive and how Medicare funds are distributed.

Julie Woodward is a retired teacher who has collaborated for more than a decade with other volunteers, the Westchester Library System and the Department of Senior Programs and Services to provide free workshops and counseling on Medicare. Audio chapters of her comprehensive program and upcoming events are available at https://seniors.westchesterlibraries.org/demystifyingmedicare/.