Dr Oz's Medicare Proposals Face Scrutiny From Democrats

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In a pointed letter to Mehmet Oz, MD, President-elect Donald Trump’s nominee to lead CMS, Sen Elizabeth Warren (D, Massachusetts) and a coalition of Democratic lawmakers have raised serious concerns about his advocacy for Medicare Advantage over traditional Medicare and his financial ties to private insurers poised to benefit from such a move.1

The letter, cosigned by senators Ron Wyden (D, Oregon), Dick Durbin (D, Illinois), and Jeff Merkley (D, Oregon) and Rep Lloyd Doggett (D, Texas), challenges Oz's suitability for a role that oversees Medicare, citing potential conflicts of interest and policies that they say could undermine care for millions of seniors.

Calls to Privatize Medicare Under Scrutiny

The lawmakers critiqued Oz's vision for CMS, outlined in 2020 before his 2022 Senate campaign, which advocated replacing traditional Medicare with private Medicare Advantage plans.1,2 A Forbes article articulated the plan of Oz and George Halvorson, former CEO of Kaiser Permanente, which proposed the expansion of Medicare Advantage on the basis that it offers better care than traditional Medicare through competing plans.2 Oz and Halvorson argued that this model could rapidly be expanded to cover all Americans not on Medicaid by implementing a payroll tax of approximately 20%, which would be split between employers and employees.

The article also noted that the purchase of Medicare Advantage plans for each member would result in plans being paid monthly, not per care service, which “would free the plans and caregivers from the perverse consequences of being paid fees for each piece of care and from being dependent on individual pieces of care for their cash flows.” They suggested that this would incentivize plans to keep members healthier, aligned with the principles of value-based care.

However, the letter from the lawmakers references nonpartisan estimates projecting that Medicare Advantage insurers overcharged CMS by $88 billion in 2024 alone.1 The practice of "upcoding," where insurers exaggerate enrollee health conditions to secure higher payments, has been central to these allegations. Just last year, Cigna was ordered to pay $172 million to settle claims of wrongful reimbursement in Medicare Advantage plans.3

“Private insurers running Medicare Advantage drastically overcharge for care, undermining the program's sustainability and fairness,” the lawmakers wrote, emphasizing the need for stricter oversight.1

Financial Ties Present Possible Conflicts

Oz’s financial ties to UnitedHealth Group, the largest Medicare Advantage provider, have also drawn criticism. Disclosure documents from his 2022 Senate campaign revealed investments of over $550,000 in the company. Under his proposed Medicare policies, the Democratic lawmakers write, UnitedHealth’s Medicare Advantage revenue could double to $274 billion annually, raising ethical concerns.

“As CMS Administrator, you would be tasked with overseeing Medicare and ensuring that the tens of millions of seniors that rely on the program receive the care they deserve, including cracking down on abuses by private insurers in Medicare Advantage,” the letter stated. “The consequences of failure on your part would be grave. Billions of federal health care dollars – and millions of lives – are at stake.”

The lawmakers questioned whether Oz could impartially lead CMS given his financial interests and past statements labeling traditional Medicare as “highly dysfunctional.”

In his 2020 article, Oz claimed the “Medicare Advantage for all” idea would facilitate more equitable access to health care, particularly for underserved communities, while addressing the systemic issues highlighted by the COVID-19 pandemic. However, recent studies have demonstrated the complexity of this claim; addressing long-standing, systemic inequities demands a multifaceted approach, not a uniform action item.4,5

Research has shown that Medicare Advantage fails to offer cost savings when examining the nuances of patients' needs across a national spectrum,4 while other investigators write that strides in mitigating racial and income-based disparities should entail a specifically targeted approach.5

“Among near-poor Black and Hispanic Medicare beneficiaries, MA was associated with greater use of vision care and narrowing of some disparities in cost-related access barriers vs [traditional Medicare],” researchers wrote recently in The American Journal of Managed Care®. "However, MA did not uniformly narrow racial/ethnic disparities in access and use. These findings highlight the importance of maintaining and enhancing features of Medicare coverage that may promote equitable access to care, including additional benefits and lower cost sharing."

What's Next for CMS?

The letter demands answers from the nominee regarding his stance on Medicare and potential conflicts of interest before his nomination to lead CMS proceeds to the Senate. Lawmakers call for clarity on whether he still views traditional Medicare as “highly dysfunctional” and whether he continues to support policies that would eliminate it. They also seek his commitment to opposing any privatization or cuts to Medicare if confirmed. Additionally, the letter presses him to reconcile his support for Medicare privatization with evidence of overcharges and care denials by private insurers and to fully divest from any insurance industry holdings.

Finally, the lawmakers ask if he will recuse himself from decisions involving insurers in which he currently holds financial interests, signaling the challenges he will face from Democratic lawmakers determined to scrutinize his vision for Medicare and his ability to manage a program serving millions of Americans.

References

1. Warren, lawmakers blast Dr. Oz for proposal to end traditional Medicare, call out glaring conflicts of interest. News release. Elizabeth Warren. December 10, 2024. Accessed December 10, 2024. https://www.warren.senate.gov/newsroom/press-releases/warren-lawmakers-blast-dr-oz-for-proposal-to-end-traditional-medicare-call-out-glaring-conflicts-of-interest

2. Halvorson G, Oz M. Medicare Advantage for all can save our health-care system. Forbes. June 11, 2020. Accessed December 9, 2024. https://www.forbes.com/sites/steveforbes/2020/06/11/medicare-advantage-for-all-can-save-our-health-care-system/?sh=7d3194b24d12

3. Payerchin R. Cigna to pay $172M to settle claims of wrongful reimbursement by Medicare Advantage. Medical Economics. October 7, 2023. Accessed December 9, 2024. https://www.medicaleconomics.com/view/cigna-to-pay-172m-to-settle-claims-of-wrongful-reimbursement-by-medicare-advantage

4. Joszt L. Medicare Advantage plans provide no substantial cost savings over traditional Medicare. AJMC®. June 24, 2024. Accessed December 9, 2024. https://www.ajmc.com/view/medicare-advantage-plans-provide-no-substantial-cost-savings-over-traditional-medicare

5. Hames AG, Tipirneni R, Switzer GE, et al. Racial/ethnic disparities in cost-related barriers to care among near-poor beneficiaries in Medicare Advantage vs traditional Medicare. Am J Manag Care. 2024;30(10):e297-e304. doi:10.37765/ajmc.2024.89622