Dr. Oz is Trump’s pick to oversee Medicare

President-elect Donald Trump’s pick to oversee the Centers for Medicare and Medicaid Services (CMS) has reported owning as much as $600,000 in stock from companies benefiting from private Medicare services.

He owns healthcare stocks that could benefit

Former daytime talk show host Dr. Mehmet Oz made his political debut in 2022, running to represent Pennsylvania in the Senate in an unsuccessful — and scandal-plagued — bid against Democratic rival John Fetterman. At the time, Oz was required to file a financial disclosure, which showed that he owned stock in a number of companies, including Google (GOOGL-1.22%), Apple (AAPL+0.29%), and Visa (V-1.44%).

 

Oz promoted a “Medicare Advantage for All” plan, which advocated for expanding Medicare Advantage, a private option for coverage approved by Medicare. More than half of eligible beneficiaries are enrolled in Medicare Advantage, which is dominated by a handful of firms. In total, some 32.8 million people are enrolled.

“We can expand Medicare Advantage plans,” Oz said in a 2022 candidate questionnaire for AARP. “These plans are popular among seniors, consistently provide quality care and have a needed incentive to keep costs low.”

 

As of August, UnitedHealthcare accounts for 29% of all enrollments, while CVS serves 12% of customers, KFF reported. In almost a third of U.S. countries, UnitedHealthcare and rival Humana (HUM+5.85%) account for at least 75% of Medicare Advantage enrollment.

Other firms participating in Medicare Advantage include Kaiser Permanente, Cigna (CI+0.20%), and more than 170 other companies, according to a March report from Congress’s Medicare Payment Advisory Commission (MedPAC).

“Dr. Oz recognizes the value of Medicare Advantage and the high-quality, affordable, and comprehensive health care it provides to more than 34 million seniors and individuals with disabilities,” Better Medicare Alliance CEO Mary Beth Donahue said in a statement.

In 2020, Oz and former Kaiser Permanente CEO George Halvorson proposed buying healthcare coverage for every eligible American not on Medicaid through Medicare Advantage. That program would be funded through a payroll tax of 20%, they wrote, likening it to the current payroll tax for Social Security.

Oz and Halvorson suggested that Medicare Advantage’s monthly approach to coverage would cause Medicare fraud to effectively disappear “as a government expense” and “significantly reduce” administrative costs.

“The complex array of payers in our hodgepodge payment nonsystem that has created a massive administrative burden would shrink significantly—and once instituted, the universal Medicare Advantage plans should be obligated to reducing excess administrative costs by a third,” they wrote.

Part of Trump’s mandate for Oz as CMS administrator is to cut waste and fraud in the agency, which is responsible for a large amount of the federal budget.

More than $1.48 trillion was spent on Medicare and Medicaid in fiscal year 2024, according to The Congressional Budget Office. That’s roughly 22% of the $6.75 trillion budget. Medicare expenses increased by $78 billion, or 9%, due to increased enrollment and higher payment services, while Medicaid expenses grew by $2 billion.

But Medicare Advantage isn’t likely to be a solid solution to slashing expenses.

A 2013 federal audit released last year found that eight of the ten largest plans had submitted inflated bills to Medicare. In March, MedPAC said it estimates Medicare spends about 22% more for Medicare Advantage enrollees than fee-for-service enrollees, an estimated difference of $83 billion for 2024. Higher spending on Medicare Advantage is also expected to raise Part B premiums by about $13 billion this year.

Plus, the plans regularly deny coverage for necessary care, which can leave rural hospitals grappling with high costs of care and forcing some to close down, NBC News reported in 2023. When the plans do pay, they reimburse providers far less than traditional Medicare plans, rural hospital CEOs and doctors told the outlet.

Oz is expected to work alongside Trump’s pick to lead the Health and Human Services Department, Robert F. Kennedy Jr., in cutting spending. Kennedy, a vaccine-skeptic who wants to remove fluoride from drinking water, has suggested mass layoffs to lower costs.

Including his reported stock in UnitedHealthGroup and CVS, Oz and his wife owned at least $8.5 million in healthcare sector investments as of 2022, Lever News reported. Oz — who was once grilled in Congress over statements made on “The Dr. Oz Show” endorsing pseudoscience treatments — is currently an advisor and shareholder in iHerb Global, an online retailer selling vitamins and nutritional supplements.