Polls show Americans are angry—and rightly so—over accelerating medical bills. Meanwhile, insurers and hospitals continue to rake in record profits.
UnitedHealthcare reported jumbo profits for 2026, with revenues exceeding $400 billion in 2025 alone. These gains come from the $1.9 trillion in federal healthcare programs.
Two of the largest “nonprofit” hospital chains, Kaiser Permanente and HCA Healthcare, recorded nearly $200 billion in assets at the end of 2024.
House Ways and Means Committee Chair Rep. Jason Smith (R-Mo.) stated: “Hospitals are charging an insane amount. Hospital prices have skyrocketed 300% in just over two decades—more than any other sector of our economy.”
A major driver of costs is fraudulent claims paid by the government to health insurers and hospitals.
Much of this fraud targets the half-trillion-dollar Medicare Advantage program. Here’s how it works:
Medicare payments are based on a patient’s risk factors or diagnosed conditions—not actual healthcare services rendered.
Medicare Advantage enrollees are healthier on average than traditional Medicare beneficiaries, yet insurers consistently inflate patient risk scores to extract more money from taxpayers.
This scheme is known as “upcoding.” By exaggerating patients’ health problems, insurers collect larger payments from the government without providing additional care.
It’s the healthcare equivalent of a driver filing an insurance claim for a fender-bender and seeking reimbursement for much less than the repairs actually cost.
The Medicare Advantage program is designed as a free-market supplement to Medicare. However, the rules are structured to benefit hospital and insurance giants while taxpayers and employers bear the costs.
Some Republican friends argue that Medicare Advantage is a free-market insurance program. The GOP’s Doctors Caucus—comprised of physicians who treat patients firsthand—has increasingly warned that insurers are extracting billions in payments unrelated to patients’ actual medical needs.
The Trump administration has recently ended this blank-check billing scheme. In January, the administration stunned Medicare Advantage insurers by rejecting a “big boost” in payments.
Instead, President Donald Trump is pushing reforms to root out “upcoding” fraud that inflates insurer profits.
A commonsense way to save money: Trump’s Centers for Medicare & Medicaid Services (CMS) has proposed excluding diagnoses added by an insurer who reviews patient records but never sees the patient. CMS projects that eliminating such diagnoses would save taxpayers $7 billion next year alone.
One positive development is that some states are auditing hospital billing practices. Indiana’s House recently passed a “payment of health claims” law pushed by Gov. Mike Braun (R-Ind.) to root out phony reimbursement scams. States like Arkansas, Virginia, and Ohio are now following Indiana’s lead.
The annual savings from curbing Medicare Advantage fraud reach into the high tens of billions—money effectively stolen from taxpayers and employers.
Medicare Advantage now covers more than half of American seniors. For too long, fraudulent medical billing has been treated as a routine cost of doing business in Washington and state capitals.
The victims are patients, employers, doctors, and taxpayers.
President Trump and Gov. Braun should be applauded for demanding that private insurance companies stop bilking taxpayers. If insurers and hospitals continue to profit through deception, they should be excluded from the program.
