Dr Oz Wants to Privatize Medicare

The New Jersey TV doctor Dr Oz has made headlines for his bizarre recent Senate campaign videos. But his proposed scheme to privatize Medicare would hurt seniors while lining insurance companies’ pockets.

Dr Oz visits Outnumbered Overtime with Harris Faulkner at Fox News Channel Studios on March 9, 2020, in New York City. (Roy Rochlin / Getty Images)

New Jersey TV doctor Mehmet Oz has decided to stake his Pennsylvania Senate campaign on vilifying legislation that would help Americans afford to visit a doctor when they get sick. At the same time, Oz is pitching a health care initiative that could force millions of seniors off traditional Medicare and into private health insurance plans cited by government regulators for wrongly denying medical claims.

Those plans were hawked by Oz on his television show — and are now generating big profits for insurers in which Oz holds large financial stakes.

In a new video released Monday, Oz attacked his Democratic opponent, John Fetterman, for supporting “free health care for everyone” and claims that Fetterman wants to “spend more tax dollars.”

The ad appears to be a reference to Fetterman’s longtime support for single-payer health care, or a system in which the government would insure everyone, eliminating the need for private health insurance.

By contrast, Oz bills his own health care plan as “Medicare Advantage for All.” Such a program could move seniors and most Americans into private insurance plans that have been raising premiums and denying roughly one in ten medical claims, according to a recent government report finding that the plans frequently refuse to cover services required by Medicare.

To pay for his privatization plan, Oz has proposed a 20 percent payroll tax, which would ultimately transfer money from workers to the Republican Party’s private insurance donors that have been reporting record profits while jacking up premiums.

In other words, Oz himself wants to increase taxes on lower- and middle-class Americans to fund his own version of a corporate-run, universal health care system — one that could come with high patient costs, continued barriers to care, and a windfall for the health insurance industry.

Oz’s campaign did not respond to our request for comment.

“As a doctor, Oz has seen the inside of the massive health-care industrial complex and knows how they work with lobbyists and powerful special interests to protect it,” notes Oz’s campaign website, which explains that “he’ll expand access to private sector plans expanded by President Trump and beloved by seniors for their low costs and high quality that could be available to all Americans who want them.”

Oz’s plan could boost companies in which he invests: Financial disclosures show Oz and his wife own up to $550,000 worth of stock in UnitedHealth Group and up to $50,000 in CVS Health, which owns Aetna. Both UnitedHealth and Aetna have reported big revenues from Medicare Advantage plans, the privatized Medicare plans operated by corporate health insurers. In all, Oz and his wife have at least $8.5 million in personal investments in the health care sector.

Oz has pushed Medicare Advantage plans on his TV show, The Dr. Oz Show, including in a segment sponsored by MedicareAdvantage.com, an insurance agency. Viewers were encouraged to call a hotline so they could sign up for Medicare Advantage plans right away.

“An Affordable 20 Percent Payroll Tax”

While his campaign website does not offer specifics about his health care plan, Oz coauthored a Forbes column in 2020 entitled, “Medicare Advantage for All Can Save Our Health-Care System.” He wrote the column with George Halvorson, the former CEO of the health insurer and medical provider Kaiser Permanente.

Oz and Halvorson suggested calling the new far-reaching privatized Medicare program “Medical Advantage.” Oz’s campaign has been calling his plan “Medicare Advantage Plus.”

Medicare Advantage has increasingly become a major revenue source for corporate health insurers, in part due to Trump administration efforts to push more Americans than ever into the private plans. Soon, the majority of Medicare beneficiaries are expected to be on Medicare Advantage plans, rather than traditional Medicare coverage.

The Trump and Biden administrations have added to the privatization push with programs that move seniors on traditional Medicare into private plans without their full informed consent.

According to Oz’s own description, his plan would eliminate traditional Medicare coverage entirely and fully privatize the program.

The column Oz and Halvorson wrote called for “every American who is not on Medicaid” to be enrolled in Medicare Advantage.

Halvorson wrote in another 2020 column that, under this plan, “everyone in the country will either be in a Medical Advantage plan or will have Medicaid coverage.”

Oz’s plan would also impose a sizable tax on workers. In the Forbes column, Oz proposed paying for his plan with a new 20 percent payroll tax.

“We could fund this universal coverage entirely with full financial security by using an affordable 20 percent payroll tax, which is close to the amount most employers currently spend to buy insured care,” said the column. “Half would be paid by employers, so individual Americans would pay no more than 10 percent of their income to pay for much better coverage than is currently available to most.”

Last January, Oz similarly said on the Value-Based Health Care Podcast that “you’d probably need 20 percent of the payroll in America to cover” a Medicare Advantage for All program, arguing that it would save everyone money and help reduce administrative costs.

Payroll taxes are regressive, in that low- and middle-income earners end up paying more of their income in payroll tax than wealthier Americans. Workers ultimately bear the brunt of such taxes; businesses pass off the cost of the employer-side portion of these taxes by paying lower wages.

While Oz is now slamming Fetterman for supporting “socialized medicine” and wanting to “spend more tax dollars,” his proposed 20 percent payroll tax is quite steep. The existing federal payroll taxes used to fund Social Security and Medicare total 15.3 percent, which is either split among employers and employees or paid in full by independent contractors.

Oz’s proposed 20 percent payroll tax would also hit workers much harder than the Medicare for All plan proposed by Senator Bernie Sanders (I-VT).

During the 2020 presidential race, Sanders’s campaign said he would pay for his plan in part by “imposing a 7.5 percent income-based premium paid by employers, exempting the first $1 million in payroll to protect small businesses.”

Sanders planned to raise additional revenue by increasing taxes on the wealthy and taxing capital gains on investments at the same rates as normal income. Oz’s Medicare Advantage for All proposal, by contrast, would disproportionately affect low- and middle-income earners.

Raising Costs and Preserving Abuses

Corporate media pundits love asking how progressives could ever pay for Medicare for All — even though such a system could generate as much as $650 billion in federal savings per year, according to the nonpartisan Congressional Budget Office.

Such a system would save money mainly by eliminating the need for private health insurance — and the extreme waste and administrative costs that come from a system centered on such insurance.

Oz’s plan would undoubtedly be vastly more expensive than single-payer, given that Medicare already spends more money per beneficiary in Medicare Advantage plans than on beneficiaries in the traditional program.

There is another disadvantage to enrolling most Americans in Medicare Advantage plans: it would still leave people exposed to abusive insurance industry practices.

An Health and Human Services inspector general report published in April noted that there are “widespread and persistent problems related to inappropriate denials of services and payment” in the Medicare Advantage program.

According to the report, Medicare Advantage plans denied 1.5 million prior authorization requests for services and 56.2 million payment requests in 2018. Given the 20 million Medicare Advantage enrollees at the time, this translates to 2.9 denials per person — a significant bump from the 2.4 denials per enrollee identified in 2016, per a previous HHS report.

The April report notes that the inspector general recommended in 2018 that the Centers for Medicare and Medicaid Services (CMS) “enhance oversight” of Medicare Advantage plans’ appeals data and “provide beneficiaries with clear, easily accessible information about serious violations” by Medicare Advantage plans.

“As of March 2022, CMS had not yet implemented these recommendations,” the report added.