By selecting Dr. Mehmet Oz for a key healthcare post this week, President-elect Donald Trump didn’t just add one other TV star to his team — he picked a vocal champion for expanding the private sector’s role in Medicare.
On Tuesday, Trump announced that he would tap the daytime talk show host to run the Centers for Medicare and Medicaid Services, the critical agency that oversees health programs covering about 160 million Americans.
It was an unconventional alternative for a job that typically goes to an experienced bureaucrat or policy expert aware of CMS’s sprawling portfolio, which together with Medicare and Medicaid also encompasses the Children’s Health Insurance Program and the Inexpensive Care Act market. During his prior administration, Trump handed the job to Seema Verma, a conservative Obamacare critic who had helped shape several state Medicaid programs as a policy consultant.
Oz is healthier known for his dubious medical advice, similar to claims that dietary supplements may also help prevent cancer, than his views on insurance. Nonetheless, he has long been an eager advocate of Medicare Advantage, the favored but controversial federal program that lets seniors buy private coverage as a substitute for traditional, fee-for-service Medicare.
”Given his past track record, I assume this shall be a reasonably favorable environment for Medicare Advantage,” said Matthew Fiedler, a senior fellow on the Brookings Institution’s Center on Health Policy.
On his hit show, Oz has oftenhostedsegmentssponsored by Medicareadvantage.com, a business website that helps customers shop for the coverage. In a single spot posted to his YouTube channel this August, he told viewers they could possibly be eligible for plans with $0 premiums and advantages like free hearing aids, before bringing out one in all the corporate’s insurance agents to walk through more details.
“Everyone around you is signing up!” he informed the audience, before eventually urging them to call a toll-free number.
Because the COVID pandemic raged in 2020, Oz co-authored a Forbes article outlining a universal medical health insurance proposal they dubbed “Medicare Advantage for All.” It could have essentially moved all Americans who weren’t on Medicaid into private Medicare plans, funded with a 20% payroll tax.
Oz was less specific about his policy vision during his failed 2022 Pennsylvania Senate run. But he did again promise to expand Medicare Advantage. The “plans are popular amongst seniors, consistently provide quality care, and have a needed incentive to maintain costs low,” he told AARP.
Currently, 54% of all Medicare enrollees are signed up for personal Advantage plans. The coverage is appealing to many seniors since it often offers lower premiums and advantages like dental and hearing coverage that traditional Medicare legally can’t, in addition to perks like free gym memberships.
However the plans include downsides, as well: They supply more limited doctors’ networks, which might pose a challenge to aging patients, and require prior authorization for some treatments which might result in denied coverage.
Republicans have long sought to expand Medicare Advantage, arguing that it offers customers more alternative and operates more efficiently than the standard program, partly by limiting unnecessary health spending. But critics argue that insurers earn their profits by cherry-picking healthier seniors and rejecting many legitimate treatment requests, likely “stopping or delaying medically mandatory care,” as a 2022 inspector’s general report put it.
Some conservatives have proposed sweeping changes that will give Medicare Advantage a leg up. In its Project 2025 report, for example, the Heritage Foundation advocated making this system the default insurance option for seniors. Such a change would likely require recent laws, said Brookings’ Fiedler, though the Trump administration could potentially try to make use of its regulatory powers to run a small pilot version of the concept.
For his part, Oz could potentially use his role at CMS to assist expand Medicare Advantage on the margins and potentially boost insurers’ bottom lines.
One lever he could pull could be rules across the promoting that floods seniors’ mailboxes and TV screens each open enrollment period. CMS effectively has veto power over what spots can run, and the Biden administration led an aggressive crackdown against deceptive marketing practices that saw it reject around one-third of proposed ads last yr while putting in stricter regulations. Oz, a pitchman himself, could in theory take a looser approach.
“CMS currently has loads of oversight over how Medicare Advantage plans conduct their marketing activities, and that has vital implications for the continued growth of this system,” Joe Albanese, a senior policy analyst at Paragon Health, told Yahoo Finance.
At CMS, Oz will even oversee the annual rate-setting process that decides how much Advantage plans are paid for every customer they enroll, which he could use to “sweeten the pot” for firms, said Tricia Neuman, executive director for this system on Medicare Policy on the Kaiser Family Foundation.
There are growing concerns in Washington about Medicare Advantage’s cost, due to studies which have found the federal government now spends more per enrollee than it does for similar customers in traditional Medicare, partly as a consequence of how insurers game the payment system. The Committee for a Responsible Federal Budget estimated in 2023 that the federal government could find yourself overpaying insurers in this system by $810 billion to $1.6 trillion over the following 10 years, which is able to put more drain on Medicare’s trust fund and certain result in higher premiums on the standard side of this system.
The Biden administration has taken some modest regulatory steps to attempt to take care of the price issue. This yr it cut the bottom pay rate for Medicare Advantage plans by 0.16% — a move that caused an uproar inside the industry and led congressional Republicans to accuse the president of attempting to “destroy” this system. (The administration noted that insurers would still get a pay increase after adjustments for his or her customers’ health.)
Heart surgeon Mehmet Oz is President-elect Donald Trump’s nominee to guide the agencies overseeing Medicare and other federal health programs. (Photo by Ahmet Serdar Eser/Anadolu via Getty Images) ·Anadolu via Getty Images
In his post on Truth Social announcing Oz’s selection, Trump said Oz would cut “waste and fraud in our costliest government agency.” But healthcare experts said they were skeptical those efforts would touch Medicare Advantage, given Oz’s desire to expand this system and the GOP’s reactions to Biden’s cuts.
“I don’t think there shall be an enormous appetite for Republicans in Congress or the administration to deal with these overpayments,” said Kaiser’s Neuman. “But that comes at a value to Medicare.”
While expanding Medicare Advantage might put a stress on Medicare’s long-term funds, that approach could keep many seniors happier within the short term because it could mean more perks of their plans.
“When plans are paid more, that does appear to end in more generous advantages for Medicare Advantage enrollees,” said Brookings’ Fiedler.
Jordan Weissmann is a senior reporter at Yahoo Finance.