Imagine if Americans could save nearly $2 trillion over the next decade—enough to fund countless schools, roads, or even universal healthcare expansions. But here’s the shocking truth: instead of saving, we’re on track to waste that money due to the privatization of Medicare Advantage and Medicaid. This isn’t just a financial issue; it’s a moral one, as millions of Americans struggle to access affordable healthcare while private insurers rake in massive profits.
Last summer, former President Donald Trump and his Republican allies in Congress launched a fierce attack on Medicaid, slashing funding under the guise of eliminating waste and abuse. Their claims, however, were largely unfounded, as evidenced by fact-checkers who debunked the notion that Medicaid is riddled with fraud. But here’s where it gets controversial: a groundbreaking paper published in Health Affairs argues that if the goal was truly to combat waste, the administration should have targeted Medicare Advantage (MA) and privatized Medicaid instead.
The paper’s authors reveal a staggering statistic: overpayments to Medicare Advantage plans—run by for-profit insurers—and private Medicaid managed care could cost taxpayers a whopping $1.92 trillion over the next decade. To put that in perspective, this amount dwarfs the proposed cuts to Medicaid and food assistance programs. And this is the part most people miss: while these overpayments line the pockets of private insurers’ executives—like the MA CEO who earned $26.3 million last year—they do little to improve patient care.
The authors, Adam Gaffney, Danny McCormick, Steffie Woolhandler, and David Himmelstein, argue that ending this waste would require a bold shift: reversing the decades-long trend of outsourcing healthcare to profit-driven intermediaries and restoring Medicare and Medicaid as publicly administered programs. They point out that even Congress’s trillion-dollar cuts pale in comparison to the potential savings from de-privatization.
Ironically, instead of cracking down on Medicare Advantage fraud, the Trump administration handed MA plans a massive gift earlier this year by approving a 5.1% federal payment increase—more than double the 2.2% proposed by the Biden administration. This move, the authors note, will add $25 billion in waste to the healthcare system next year alone. Here’s the kicker: MA plans are notorious for denying necessary care to maximize profits, yet they continue to receive taxpayer-funded windfalls.
The paper’s authors challenge the administration’s priorities, asking: If curbing waste is the goal, why divert public funds to corporate intermediaries instead of reinvesting in efficient public programs? This question isn’t just rhetorical—it’s a call to action. What do you think? Is privatization the answer to healthcare efficiency, or is it time to reclaim our public programs? Share your thoughts in the comments below.
