CMS Administrator Dr. Mehmet Oz compared regulating Medicare Advantage to tending a garden, saying it’s “vulnerable to weeds and overgrowth.” In a prerecorded video, Oz stated that the goal is to see Americans thrive in their old age, but the current system has patients paying the price financially and physically.
Oz‘s comments indicate the Trump administration’s continued interest in strengthening oversight of the privatized Medicare program. The administration aims to ensure that plans deliver exceptional care while responsibly stewarding taxpayer dollars.
Medicare Advantage Overview
Medicare Advantage (MA) is a popular program, with over 35 million Americans opting into an MA plan this year. The program contracts with private insurers to administer benefits for Medicare seniors, offering lower upfront costs, caps on out-of-pocket spending, and extra benefits like dental coverage and gym memberships.
However, research shows that the federal government is paying more for MA than it would for traditional Medicare. The estimated cost difference is $76 billion this year, partly due to private insurers overexaggerating the sickness of their members to receive extra reimbursement, a practice called upcoding.
Concerns and Calls for Reform
MA plans have been criticized for using restrictive provider networks and requiring prior authorization for medical care, delaying or limiting access for seniors. Concerns about spending and plan behaviors have led to growing calls for reform from medical associations, policy groups, patient advocates, and lawmakers on both sides of the aisle.
The CMS is wary of offending deep-pocketed insurers, which characterize curbing MA as cuts to seniors’ healthcare. In public comments, CMS leaders present themselves as defenders of MA but argue that reform is needed to improve waning trust in the program.
Reforms and Policies
The second Trump administration has made some reforms at the margins, but its policies have generally been favorable for MA insurers. For example, the CMS proposed a flat payment update for MA plans in 2027 but finalized significantly higher rates after a lobbying campaign from insurers.
Regulators also stripped out proposed changes to how MA insurers account for their members’ health needs, which would have curbed payments to plans. The CMS has reverted MA’s quality ratings system back to an older and more generous version, a change set to send billions of dollars more to plans.
However, regulators did finalize a policy putting tighter guardrails around how plans adjust for the health risks of their members, which is expected to help combat upcoding. Oz has also stepped up overpayment audits of MA plans.
Medicare open enrollment starts Oct. 15.