Dr. Oz’s Expanded Medicare Plan Would Reward Private Insurers

Mehmet Oz, TV personality, heart surgeon, and medical product pitchman, would likely be a colorful, controversial, and conservative leader of the Centers for Medicare & Medicaid Services under President-elect Donald Trump.

But he’s also a man with a plan. And in 2020, he co-authored a stunning proposal to provide universal health coverage through the popular, but costly, Medicare Advantage program.

Trump’s return to the White House and pending Republican control of the House and Senate offer a path forward for the plan that combines Democrats’ long-held desire to protect the uninsured with Republicans’ penchant for market-based health-care solutions.

As the GOP ponders whether to pursue a rare opportunity to deconstruct US health-care policy in their own vision, Oz’s plan to expand the leverage and influence of private Medicare Advantage plans could help shape the debate. But it will face opposition.

The proposal is “100% antithetical to the job of running the Medicare system,” according to Robert Weissman, co-president of the consumer watchdog group Public Citizen, and a “takeover” of traditional Medicare by “an inefficient, care-denying, corporatized private health insurance system.”

The Plan

Unlike traditional fee-for-service Medicare, which pays for each medical service provided, private Medicare Advantage plans receive a flat monthly payment to cover each beneficiary’s cost of care. The plans are a major revenue source for insurers like Humana Inc., UnitedHealth Group Inc., Centene Corp., and CVS Health Corp.

But the MA program, which now covers more than half of all eligible Medicare beneficiaries, has faced scrutiny from lawmakers and regulators over its cost and the quality of care.

This year, MA plans are projected to receive $88 billion—or 23%—more to care for beneficiaries than it would cost in traditional fee-for-service Medicare, according to the Medicare Payment Advisory Commission. Since 2007, the commission estimates MA plans have been paid $613 billion above fee-for-service spending for comparable care—and about half of these payments have occurred since 2020.

While it’s “incredibly difficult” to forecast what Oz will do as head of the CMS, “I do not think this type of coverage expansion is likely in the coming administration,” said a statement from David Grabowski, a professor of health-care policy at Harvard Medical School.

The MA proposal by Oz—fueled by a 20% payroll tax—is consistent with the Trump administration’s “very pro-corporate agenda when it comes to health care,” Weissman added.

But George Halvorson, who co-authored the proposal with Oz, said in an interview the commission’s estimates about MA costs were “total fabrication.”

Halvorson, chair and CEO of the Institute for InterGroup Understanding, said MA-plan bids to provide care are 18% less than the cost of care in fee-for-service Medicare.

The former CEO of Kaiser Permanente, Halvorson said he was “delighted and surprised” by Oz’s nomination. He disputed claims that Oz doesn’t adhere to evidenced-based science, and he called their “Medicare Advantage for All” proposal a “magnificent tool” that remains viable as a policy option.

“I’m sure they will all work together to figure out what the best strategy is,” Halvorson said of Oz, the Trump administration, and Congress. “And the fact that Medicare Advantage has lower cost and better care is going to make it easy.”

David Lipschutz, co-director of the Center for Medicare Advocacy, disagreed.

Oz Opposition

In a statement, Lipschutz, an attorney, said “Dr. Oz’s goals for Medicare would push the program in exactly the wrong direction and harm millions of beneficiaries.”

The “MA for All” proposal is based on the “flawed premises that MA saves the program money and provides better quality outcomes—neither of which is true,” Lipschutz said.

Instead of MA for all, “policymakers should rein in MA overpayments and use them to expand traditional Medicare,” he added.

Like Trump’s selection of Robert F. Kennedy Jr. as secretary of the Department of Health and Human Services, his choice of Oz for CMS administrator continues the president-elect’s affinity for anti-establishment “outsiders, people who have voiced a lot of uncertainty about research, evidence, and facts,” said Mariana Socal, an associate professor at Johns Hopkins Bloomberg School of Public Health.

“Dr. Oz is definitely a person who has expressed support for things without a lot of scientific evidence,” she added. “It’s a very different set of skills to treat patients and to run a system of health-care programs like Medicare, and Medicaid, so that’s a big question mark on what we will be able to expect from his leadership.”

But Oz, others note, at least has a record on the health-care industry and with Medicare.

“While he gets a tremendous amount of mention in the news about some of the odd things that he talks about on his TV show, and the unproven medicines, he actually does have a track record of being supportive of Medicare,” said Fred Ledley, director for the Center for Integration of Science and Industry at Bentley University.

“He hasn’t been a champion of outrageous payment schemes. He’s not talking about abolishing Medicare. He’s not talking about kicking people off Medicare. If anything, his track record has been to simplify, to reduce prices, and to provide coverage.”