By Steve Wishnia

If Project 2025—the blueprint for a second Donald Trump administration drawn up by the Heritage Foundation think tank—gets the green light, people signing up for Medicare would be automatically put into a profit-driven “Medicare Advantage” health insurance plan unless they made a special effort to sign up for regular, non-privatized Medicare coverage. 

The Heritage Foundation’s “Mandate for Leadership” plan, released last year, says that Medicare Advantage “provides beneficiaries with a wide range of competitive health plan choices—a richer set of benefits than traditional Medicare provides and at a reasonable cost.” Therefore, the federal government should enact legislation to make it “the default enrollment option” and “remove burdensome policies that micromanage Medicare Advantage plans.”

The Trump campaign has tried to disavow Project 2025, with two top advisers saying in a statement July 30 that it “should not be associated with the campaign or the President in any way.” But most of the authors listed are former Trump administration officials, including several of Cabinet rank. The health-policy section’s author, Roger Severino, is a longtime anti-abortion activist who headed the Department of Health and Human Services’ Office for Civil Rights during Trump’s term in office.

Project 2025’s proposals for Medicare and Medicaid are intended to “turn over as much money as possible to profit-seeking intermediaries who want to siphon as much money out of the government as possible,” Dr. Stephen Kemble, chair of the policy committee at Physicians for a National Health Program, told Work-Bites. “That isn’t going to help health care.”

Instead, he says, they would “accelerate bankrupting the Medicare trust fund” and create “a giant opportunity to rip off the system.”

An analysis released in March by the centrist-Democrat Center for American Progress estimated that Medicare Advantage, in which the government pays the private plans a set amount per patient, costs between 22% and 39% more per patient than traditional Medicare. The overpayments, it said, are largely due to the plans enrolling healthier patients who need less care and then “upcoding” their diagnoses to make them look sicker than they really are.

Blaming Medicare for the deficit

Project 2025’s health policy proposals are most emphatic in insisting that the free market is the best way to run health care, and opposing abortion, transgender people, and vaccine mandates. It blames Medicare and Medicaid for the entire federal deficit since they were established in 1966, and calls the Department of Health and Human Services “the belly of the massive behemoth that is the modern administrative state.”

While Severino concedes that Medicare and Medicaid “help many,” he immediately segues into saying that “they operate as runaway entitlements that stifle medical innovation, encourage fraud, and impede cost containment, in addition to which their fiscal future is in peril.”

Project 2025 proposes that Congress enact legislation to “reconfigure the current risk-adjustment model” for Medicare Advantage and, for traditional Medicare, to “replace the bureaucrat-driven fee-for-service system with value-based payments.”

Risk adjustment involves paying Medicare Advantage plans more for customers who are sicker, an attempt to counteract their preference for healthier people, who are more profitable because they use less care. Project 2025 wants to return the 2023 Risk Adjustment Data Validation rule to the Trump administration’s 2018 proposal, which limited audits intended to detect upcoding.

“Risk adjustment is impossible to do accurately,” Kemble says, and it can’t stop insurers from picking healthier customers. “They’re really talking about making it weaker.”

“Value-based medicine,” he explains, basically means capitation, paying health-care providers a specific amount per patient rather than fees for services performed. But fee-for-service isn’t what’s driving up costs, he argues: “Once you get non-medical owners, they’ll abuse fee-for-service.” In a for-profit system, capitation creates incentives for upcoding and denying people care.

Project 2025 also advocates repealing the Inflation Reduction Act’s enabling Medicare to negotiate the prices of a handful of drugs with pharmaceutical companies, calling it “government price controls” that “will limit access to medication.”

For Medicaid, it would “reform financing” by capping the amount that states receive to pay for care,

Are Trump’s objections believable?

The Trump campaign’s objections to Project 2025 are likely intended to deflect criticism of its proposals away from him. Unlike Republicans since Ronald Reagan who obsessed about “reforming entitlements,” Trump has to at least appear to oppose cutting Social Security and Medicare.

This might parallel his stances on abortion. As a candidate, he pledged to appoint Supreme Court justices who would overrule Roe v. Wade. Since the Court did that in 2022, he has bragged about picking those judges. But with draconian state bans provoking fierce opposition, he’s now ducking the issue. In the June 27 presidential debate, he claimed that all the Court did was return power to elected state officials, and that killing Roe v. Wade was “something everybody wanted”—a statement as grotesquely ignorant of American history as saying there were no disputes over slavery or the Vietnam War.

But Trump, who is famously indifferent to the details of policy, needs people in his administration who actually know those details, who know what “risk adjustment” means. His previous administration relied heavily on the Heritage Foundation for personnel, and both he and Project 2025 call for replacing career civil servants with political appointees. The Washington Post reported July 30 that Project 2025 would continue running its database of resumes from more than 10,000 people seeking posts in a possible Trump administration.

In any case, one shouldn’t expect a coherent, thought-out policy. The Trump movement’s roots are in people like the Tea Party protester at a Democratic Congressman’s town meeting on Long Island in 2009 who carried a sign that read “Keep the Government Out of My Medicare.”

‘This isn’t health care’

Marianne Pizzitola, president of the New York City Organization of Public Service Retirees and the FDNY EMS Retirees Association, says the prospect of having Medicare Advantage be the default option for people signing up for Medicare “scares the bejeezus out of me.”

But her larger concern, she told Work-Bites, is the lack of support for protecting Medicare among most politicians.

“I couldn’t get a bill passed in the city. I couldn’t get a bill passed in the state,” she says, speaking of legislation that would prevent governments from switching their retired employees to Medicare Advantage.

Senate Majority Leader Charles Schumer, she notes, was one of the 61 senators who in January signed a letter to the Center for Medicare and Medicaid Services (CMS) “to express our bipartisan support for the Medicare Advantage program.” The list, about two-thirds Republicans, also included swing-state Democrats, among them Mark Kelly of Arizona, and Democrats-turned-independents Joe Manchin of West Virginia and Kyrsten Sinema of Arizona, who in 2021 blocked legislation to have Medicare cover dental, vision, and hearing care.

That letter was sent the day after one from Senators Elizabeth Warren (D-Mass.) and Pramila Jayapal (D-Wash.), who called on CMS to curb overpayments to Medicare Advantage and strengthen enforcement against insurance companies that illegally deny care.

Warren and Jayapal said that the Medicare Payment Advisory Commission had estimated that CMS pays Medicare Advantage plans 6% more per enrollee than what it would cost in traditional, non-privatized Medicare, while they spend up to 25% less on health care. It said annual overpayments amount to around $140 billion a year, driving up premiums for all Medicare beneficiaries.

Medicare Advantage now covers slightly more than half of the 60 million people on Medicare. The hook is that it’s cheaper—full Medicare coverage can cost around $500 a month, more than 25% of the average Social Security benefit—and it often provides services that regular Medicare doesn’t, such as dental coverage. The catch is that Medicare Advantage plans often deny services for people when they’re seriously ill, as well as severely limit the doctors and hospitals they can visit. 

Pizzitola says she regularly hears stories from the retirees she represents who bear this out. One of those stories involving a man whose wife had a brain tumor, but her Aetna Medicare Advantage plan refused to pay for her to be admitted to a skilled nursing home when she was discharged from the hospital, is typical of the nightmare scenarios encountered.  

A 2019 report by HHS’s inspector general found that among requests that Medicare Advantage plans denied—13% of those they refused to authorize in advance and 18% of those they refused to pay for—were actually valid under Medicare regulations. The number of denials appealed has grown by more than half since then, Warren and Jayapal said, as insurers use artificial intelligence to deny requests for care.

“This is what we’re fighting,” Pizzitola says. “This isn’t health care.”

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