White House Task Force Targets Unauthorized Obamacare Enrollments
A task force headed by Vice President JD Vance has revealed that the Trump Administration plans to remove around 315,000 unauthorized enrollments from Obamacare, which is expected to save about $2.2 billion in government funds.
However, if the administration and Congress are serious about tackling government waste to further reduce spending, they might not have to look very far for their next target: Medicare Advantage.
Medicare Advantage offers a popular alternative to traditional Medicare, allowing participants to select from various competing private plans. While many users appreciate the flexibility, the program is a significant drain on taxpayer money. The payment structures incentivize insurers to make patients appear more ill than they actually are by adding or exaggerating diagnoses, which results in inflated reimbursements that don’t accurately reflect the actual care provided. This tendency to inflate medical conditions for higher risk scores is projected to cost taxpayers roughly $22 billion by 2026—nearly ten times the savings from the recent Obamacare cleanup.
If the White House is intent on expanding its efforts to combat government waste beyond Obamacare, a practical two-pronged strategy for reforming Medicare Advantage should be considered. First, it could prioritize fraudulent coding within Medicare Advantage through the Departments of Justice and Health and Human Services, building on enforcement actions against fraud related to Obamacare brokers. Second, Congress should support initiatives like the No UPCODE Act to reform the program’s incentive structures. Implementing both measures would not only cut expenses for taxpayers but also ensure the long-term viability of Medicare Advantage.
It’s important to recognize that reducing healthcare spending meaningfully requires addressing the incentives within Medicare Advantage responsible for excess payments. Since insurers earn more money for managing sicker patients, they often resort to practices that inflate medical coding. For instance, some insurers conduct health risk assessments where nurses and other healthcare professionals visit patients at home to add diagnoses purely to boost reimbursements.
These kinds of practices have led to billions wasted in unnecessary spending. An Inspector General report indicated that $7.5 billion in Medicare Advantage payments in 2023 were linked to diagnoses from 2022 that had no accompanying follow-up visits, procedures, or tests. Additionally, two recent reports highlighted that Humana and UnitedHealthcare had overcharged the government by nearly $180 million without sufficient medical evidence supporting those claims.
The flawed incentives associated with Medicare Advantage go beyond fiscal issues; they also impact the sustainability of the Medicare hospital insurance trust fund. This fund is crucial for financing hospital and skilled nursing care under Medicare. According to program trustees, the trust fund could become insolvent as early as 2033. Without intervention from Congress, depleting the fund could lead to an estimated 11% reduction in Medicare Part A payments, potentially disrupting patients’ access to hospital services.
Taxpayers and patients alike deserve prompt measures to address fraud and waste. On the administration side, Vice President Vance’s task force could leverage artificial intelligence to proactively pinpoint improper coding in Medicare Advantage, thereby aiding the DOJ and HHS’s enforcement drives. Meanwhile, Congress should act quickly to pass the No UPCODE Act, which aims to curb poor incentives in Medicare Advantage by prohibiting diagnoses added during health risk assessments and improving oversight of reimbursement practices.
If Vice President Vance is seeking a logical next step to capitalize on his task force’s momentum, targeting Medicare Advantage makes perfect sense. There’s no need to formulate a new strategy; the groundwork has already been laid by both Congress and the White House.
