The For-Profit Takeover of Medicare Is a Huge Scam
Last year, the federal government spent $20.5 billion overpaying private insurers for Medicare Advantage plans — and the industry’s aggressive lobbying campaign is kneecapping efforts by lawmakers to stop the scheme.
The government’s inability to crack down on Medicare Advantage overpayments is a product of major lobbying campaigns by the industry. (Bill Clark / CQ Roll Call via Getty Images)
The health insurance behemoth Humana enjoyed a banner 2022. The Louisville, Kentucky–based insurer made $2.8 billion in profits last year, while paying out $448 million in dividends to shareholders and more than $17 million in compensation to its CEO.
The main driver of those earnings? The federal government spent $20.5 billion overpaying Humana and other private insurers for the Medicare Advantage plans they manage on behalf of seniors and people with disabilities. If not for those overpayments, Humana could have suffered a nearly $900 million loss in 2022, according to a Lever analysis.
Humana is the most prominent example of how insurers have built a major cash cow out of systematically overbilling Medicare Advantage, the private Medicare program operated by private interests. These overpayments are symptomatic of a broader profit-driven policy agenda that seeks to completely privatize Medicare, one of the nation’s most popular social programs, and lock program recipients into subpar private insurance plans, even when they get sicker and need the best care possible.
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