The Trump administration has made reducing waste, fraud, and abuse a top healthcare priority. In a new RealClearHealth column, Market Institute President Charles Sauer argues that one of the biggest opportunities for reform lies within Medicare Advantage.
While Medicare Advantage provides millions of seniors with greater flexibility and additional benefits compared to traditional Medicare, Sauer explains that the program’s reimbursement structure creates powerful incentives for insurers to inflate patient risk scores in order to secure larger government payments.
As Sauer writes:
“Insurers receive higher reimbursement payments from the government for patients deemed sicker or more medically complex, creating a strong financial incentive to inflate patient ‘risk scores.’ And research has found that insurers routinely assign risk scores that overstate patient risk.”
The result is billions of dollars in improper payments that burden taxpayers without improving patient care. According to Sauer, Medicare Advantage’s improper payment rate exceeded 6 percent in 2025, totaling more than $23.5 billion in taxpayer losses.
Sauer highlights how practices such as health risk assessments and aggressive coding can artificially increase reimbursement rates. He points to reporting that found Medicare Advantage patients were diagnosed with certain conditions at far higher rates than comparable patients in traditional Medicare, generating thousands of dollars in additional government payments per enrollee.
“Patients lose faith in insurers that prioritize reimbursement over care, while taxpayers rightly question where their tax dollars are going,” Sauer writes. “Policymakers must act fast to restore this trust.”
Rather than eliminating Medicare Advantage, Sauer argues that policymakers should focus on fixing the incentives that encourage abuse. He points to legislation such as the NO UPCODE Act, which would strengthen safeguards in the program’s risk-adjustment system and help ensure payments more accurately reflect patient health status.
Sauer concludes that preserving Medicare Advantage’s benefits requires restoring accountability and eliminating opportunities for waste.
“Medicare Advantage works, but only when incentives are properly aligned. Fraud and waste have no place in our healthcare. Congress should join the White House in restoring accountability to the program and protecting patients and taxpayers.”
Read Charles Sauer’s full RealClearHealth article for more on how Congress can strengthen Medicare Advantage while safeguarding both patients and taxpayers.
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