You may have heard of efforts to root out government waste and fraud, most notably led by Elon Musk’s imaginatively named Department of Government Efficiency (DOGE). While targeting fraud sounds like a noble endeavor, not all government programs are equal offenders. In fact, Social Security—which has often been portrayed as riddled with abuse—has been largely vindicated. Most "suspicious" cases, like people listed as 120 years old, are the result of coding quirks, not fraud. Actual improper payments are under 1%, and most of those are simple administrative mistakes—not schemes to defraud taxpayers.
But if DOGE really wants to find waste, fraud, and abuse, it should turn its attention to Medicare—particularly Medicare Advantage (MA) plans. Fraud in Medicare typically involves providers billing for services never rendered, upcoding procedures for higher payouts, or ordering medically unnecessary tests. Abuse might look less sinister but still costly—like overcharging or unnecessary treatments. Waste, while sometimes unintentional, still adds up when services are misused or resources are over-deployed.
What’s especially alarming is the role of Medicare Advantage in this equation. According to MedPAC, a congressional advisory agency, the government is poised to spend about 20% more per MA enrollee than for someone in traditional Medicare. That translates to a staggering $84 billion in excess payments in 2025. And here’s the kicker—those overpayments cause everyone's Medicare Part B premiums to go up, whether you’re in an MA plan or not. Think of it as a hidden tax on beneficiaries.
Despite these red flags, recent policy decisions under the Trump administration (including CMS leadership under Dr. Oz) have moved in the opposite direction—boosting MA payments while pulling back on proposed reforms meant to increase oversight and limit excessive marketing and prior authorization barriers. The Medicare Rights Center has flagged these choices as concerning, noting they could endanger Medicare’s long-term sustainability while failing to live up to promises of curbing fraud and abuse.
For clients approaching or already on Medicare, this is a reminder to stay informed and ask questions—especially about Medicare Advantage plans. While some options may offer attractive perks, not all are created equal, and the broader system implications can affect everyone. As your advisor, I’m here to help you navigate those decisions thoughtfully and avoid costly missteps in your retirement healthcare planning.
Many thanks to Elaine Floyd at the Horsesmouth for the inspiration for this blog.