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Trump Opens the Door to More Medicare Advantage Fraud The American Prospect
One of the most preposterous narratives about Donald Trump’s second term in office is that his administration is engaged in “cost-cutting.” Elon Musk and his DOGE goons are hacking away randomly at the federal bureaucracy, it’s true, but all the salaries of all federal employees combined come to only about 5 percent of government spending. And many of those layoffs are going to lead to increased spending—for instance, massive cuts to the IRS workforce have already reduced tax revenue by an estimated $500 billion this year, which will require the money to be borrowed instead, thereby automatically increasing spending on interest payments (the fifth-largest category in the federal budget).
Sure enough, as John Green points out, total federal spending has steadily increased this year each month—indeed, faster than it did in 2024. Now it is likely to increase yet more, as Trump has proposed a trillion-dollar military budget, and more importantly, released a new reimbursement schedule for Medicare Advantage (the privatized version of the program). Where the Biden administration had proposed a 2.23 percent increase to that program, Trump officials have proposed more than twice that: 5.06 percent, according to The Wall Street Journal.
The Journal estimates that this change will increase annual Medicare spending by $25 billion. But I strongly suspect it will end up being much more than that, because it’s augmented by the Trump administration’s mass layoffs at the Centers for Medicare & Medicaid Services (CMS). Defrauding Medicare just got easier and much more lucrative.
Under Medicare Advantage—which now covers more than half of the seniors in the program—the government pays private companies to insure Medicare enrollees. As we have covered at the Prospect for years now, the program is, at best, a pointless waste of money, and at worst an outright scam. It was set up back in the 1990s at the height of bipartisan neoliberal hegemony, when virtually everyone in power assumed as a matter of faith that business could always operate more efficiently than government, amen.
Sure enough, as John Green points out, total federal spending has steadily increased this year each month—indeed, faster than it did in 2024. Now it is likely to increase yet more, as Trump has proposed a trillion-dollar military budget, and more importantly, released a new reimbursement schedule for Medicare Advantage (the privatized version of the program). Where the Biden administration had proposed a 2.23 percent increase to that program, Trump officials have proposed more than twice that: 5.06 percent, according to The Wall Street Journal.
The Journal estimates that this change will increase annual Medicare spending by $25 billion. But I strongly suspect it will end up being much more than that, because it’s augmented by the Trump administration’s mass layoffs at the Centers for Medicare & Medicaid Services (CMS). Defrauding Medicare just got easier and much more lucrative.
Under Medicare Advantage—which now covers more than half of the seniors in the program—the government pays private companies to insure Medicare enrollees. As we have covered at the Prospect for years now, the program is, at best, a pointless waste of money, and at worst an outright scam. It was set up back in the 1990s at the height of bipartisan neoliberal hegemony, when virtually everyone in power assumed as a matter of faith that business could always operate more efficiently than government, amen.
https://prospect.org/health/2025-04-11-trump-opens-door-more-medicare-advantage-fraud/
