The State of Medicare Under the Second Trump Administration
Under President Donald Trump's administration, Medicare is expected to experience changes that align with Republican priorities. The new approach is unfolding with the recent nomination of TV personnel Dr. Mehmet Oz for Administrator of the Centers for Medicare and Medicaid Services (CMS). The administration has claimed it will protect Medicare from cuts and address financial sustainability issues caused by growing enrollment and rising costs.
Medicare faces challenges of growing enrollment pressures as the baby boomer generation ages, coupled with rising healthcare costs. In response, the administration has put forth several proposals to reshape the program in the coming years. These proposals span various areas, from privatization efforts to efficiency improvements and addressing budgetary shortfalls.
Key proposals include:
1. Privatization and Deregulation:
There is a strong push to make Medicare Advantage the default option for beneficiaries instead of traditional Medicare. Medicare Advantage plans are private insurance options subsidized by the government and have been positioned as a superior alternative to traditional Medicare. Proponents argue that these plans offer beneficiaries greater choice, flexibility, and efficiency. The administration also claims it plans to tackle waste, fraud, and abuse using advanced technologies like artificial intelligence. It also suggests expanding deregulation efforts to enhance efficiency, including making telehealth a more accessible feature(3).
Unfortunately, efforts to privatize government insurance plans lead to private insurance companies trying to save costs, in part through the denial of patient prior authorizations. In an analysis of EviCore’s own data, a private medical review company which uses proprietary computer algorithms to advise insurance companies who cover 1 in 3 Americans, EviCore rejects prior authorization requests 20% of the time, compared to just 7% for Federal Medicare plans(5). This could be a prescribed drug, medical device, or laboratory assessment. Companies use technology, like AI, to make decisions that doctors have already made and deny patients the care they need.
In 2020, Dr. Oz co-authored an article in Forbes titled, Medicare Advantage for All Can Save our Healthcare System(1). See the April 24th MVHCA blog post on Medicare Advantage plans.
Private companies providing Medicare Advantage plans have a long history of overcharging the government compared to Traditional Medicare. According to Physicians for National Health Program estimates, Medicare Advantage plans overcharge the government between 22-35%. This is a difference of $88-140 billion a year(7).
This sentiment is shared in some Medicare Advantage plans decision to remove certain hospitals from their networks, not cover some populations, and patients in some geographic areas. In 2024, over one million former Medicare Advantage beneficiaries lost their Medicare Advantage plans as certain hospitals deemed “unprofitable” were dropped from plans(6). This leaves patients scrambling to find health insurance in a market stripped of options.
2. Budgetary Challenges:
Medicare's Part A Hospital Insurance trust fund is projected to face insolvency by 2036(3), due to many different factors. The aging of the baby boomer generation, expansion of services, and national inflation have all increased Medicare costs. The Medicare Payment Advisory Commission predicts that Medicare will double by 2031(4).
The administration is expected to propose measures to postpone insolvency while maintaining program benefits. However, such measures often involve political and social trade-offs, sparking debate among patients, physicians, and health care advocates about the best path forward.
3. Impact of the Inflation Reduction Act:
A key question is whether the administration will seek to overturn provisions of this act, particularly the ability of Medicare to negotiate drug prices, which began under the previous administration. The future of such measures remains unclear. Recently, at the Gerontological Society of America, Bob Blancato, an Elder Advocate and a member of the AARP board of directors, claimed that “nobody’s going to mess with the $2,000 cap”(1). Meaning, he does not believe that Oz or anyone else will look to repeal this Biden era policy. This statement reflects a broader sentiment that specific popular measures are unlikely to face significant opposition.
While the administration’s rhetoric emphasizes its commitment to protecting Medicare, critics have raised concerns about the potential consequences of its policies. There is apprehension about an over-reliance on privatization, which some fear could lead to reduced access to care for vulnerable populations. Additionally, questions remain about how the proposed cost-containment strategies will affect the quality of care and whether they will adequately address the program’s long-term financial challenges.
Oregon beneficiaries may experience shifts in how their healthcare is delivered, particularly through expanded use of private plans and new cost-containment strategies. As the administration’s plans continue to unfold, we will need to carefully evaluate the potential impacts on Medicare’s future and the well-being of its beneficiaries. I encourage you to read more on the links above and below.