The Journal: Medicare, Inc. Part 1 – How Insurers Make Billions From Medicare

Released on June 6, 2025 | Hosted by Ryan Knutson and Jessica Mendoza | Produced by The Wall Street Journal & Gimlet

Introduction to Medicare Advantage

Jessica Mendoza opens the episode by explaining the foundational elements of Medicare, America's government-run healthcare program for those aged 65 and over, as well as some individuals with disabilities. She highlights that a significant portion of Medicare beneficiaries are enrolled in Medicare Advantage plans, which are government-funded but managed by private insurance companies.

“Medicare Advantage is sort of dominated by these huge insurance companies like UnitedHealth Group, Humana, Aetna and Elevance.”
[00:37]

Chris Weaver, an investigative reporter, adds that over 60 million people are enrolled in Medicare, with more than half opting for Medicare Advantage plans.

“Medicare Advantage insurers were basically gaming the system to get paid billions of dollars more and at the same time creating barriers to.”
[01:17]

Investigative Journey

Jessica Mendoza introduces Ana Wilde Matthews and Chris Weaver, who have been delving into the intricacies of Medicare Advantage for over a year. Their investigation uncovered that insurers manipulate the system to secure additional billions in payments by adding unnecessary diagnoses to patient records.

“Medicare Advantage insurers over a three year period had got paid $50 billion for diagnoses that they alone added to patients records.”
[01:50]

The team accessed a decade’s worth of Medicare data, encompassing service charges and records, which laid the groundwork for their extensive analysis.

“Once you sort of have the data in your hands, that's just really only the beginning of the process.”
[03:58]

Mechanics of Medicare Advantage Payments

In Medicare Advantage, private insurers receive monthly lump sums from the federal government to cover all patient care, with payments increasing based on patient health conditions. This creates an incentive for insurers to portray beneficiaries as sicker to receive higher payments.

“The federal government pays insurers essentially monthly lump sums to cover all of their care. And those lump sums go up when people are sicker.”
[04:44]

The investigation revealed that insurers were exploiting this system by artificially inflating patient diagnoses, thereby maximizing their payouts.

Case Study: Kristin Bell and UnitedHealth’s House Calls Program

Kristin Bell, a nurse practitioner from Maine who worked for UnitedHealth from 2017 to 2024, shares her firsthand experience with the House Calls program—a UnitedHealth initiative under Medicare Advantage aimed at improving patient care through home visits.

“I liked the customer service aspect of it. You know, the reason that it was good is because the people didn't have primary care provider or intermittent primary care, especially in the rural areas.”
[07:05]

Initially, Kristin found the program meaningful, conducting comprehensive assessments, including tests like urine strip analysis to monitor patients' health. However, she began noticing that the UnitedHealth software suggested diagnoses based on her input, even when patients showed no symptoms.

“The quantaflow wasn’t very specific, basically at a relatively high rate of false positives...”
[15:59]

Kristin recounts how, under managerial pressure, she was directed to perform additional tests and record diagnoses regardless of clinical necessity. This practice led to her team receiving raises, raising red flags about the ethical implications of their actions.

“After working at the house calls program for about a year, Kristin told us that she eventually began doing the tests she was asked to do. And after that, she got a raise.”
[09:51]

Questionable Diagnoses and Financial Implications

The investigation uncovered that Medicare Advantage insurers, particularly UnitedHealth, added diagnoses that were often unsubstantiated, resulting in substantial federal payouts without corresponding medical treatments.

Diabetic Cataracts

One notable example is the diagnosis of diabetic cataracts, a rare condition compared to regular cataracts. Data showed that UnitedHealth’s Medicare Advantage members were 15 times more likely to be diagnosed with diabetic cataracts than traditional Medicare patients, without corresponding treatments.

“According to the data seen by the journal team, UnitedHealth Medicare Advantage members were about 15 times as likely to have a diagnosis of diabetic cataracts compared to the average patient in traditional Medicare.”
[12:51]

Eye doctors consulted by the team confirmed the improbability of such high diagnosis rates, suggesting systemic manipulation.

Peripheral Artery Disease (PAD)

Another critical area was Peripheral Artery Disease (PAD). Nurse practitioners were instructed to use devices like the Quantaflow to diagnose PAD based on limited data points, leading to a high rate of false positives.

“The quantaflow wasn’t very specific, basically at a relatively high rate of false positives...”
[15:59]

UnitedHealth received nearly $1.4 billion from PAD diagnoses between 2019 and 2021. The manufacturer of Quantaflow, Semler Scientific, faced a Justice Department investigation for potential fraud, culminating in a tentative $30 million settlement.

HIV Diagnoses

The team also found that thousands of patients were incorrectly diagnosed with HIV, leading to additional payments without appropriate treatment, as evidenced by the lack of prescribed antiretroviral therapy.

“Those questionable diagnoses weren't just for rare diseases like diabetic cataracts or peripheral artery disease. They were also for HIV, the virus that causes AIDS.”
[16:32]

Experts consulted by the Journal overwhelmingly believed these HIV diagnoses were unfounded, likely stemming from misinterpretations of screening exams.

Insurer Responses and Rebuttals

UnitedHealth defended their practices, stating that added diagnoses facilitate early treatment and lead to better patient outcomes, ultimately reducing costs compared to traditional Medicare.

“Insurers have defended their practices. You know, they've argued that some of their practices lead to diagnosing patients with serious conditions sooner so they can get the treatment that they need.”
[05:27]

However, the Journal's data contradicted these claims, showing that many added diagnoses did not result in any subsequent medical intervention, highlighting inefficiencies and fraud within the system.

Economic and Systemic Implications

The investigation highlighted that over a three-year period, Medicare Advantage insurers received an additional $50 billion from dubious diagnoses. This influx of funds from a taxpayer-funded program underscores significant systemic flaws.

“The problem here is that insurers are layering diagnoses on patients, generating billions and billions and billions of dollars more in taxpayer funded reimbursement.”
[19:33]

Moreover, the misuse of funds contributes to escalating healthcare costs in the United States, as Medicare Advantage continues to drive growth in the health insurance sector through such exploitative practices.

Withholding Care and Beneficiary Exodus

Another troubling finding discussed by Ana Wilde Matthews is the higher-than-average rate at which beneficiaries in their final year of life leave Medicare Advantage for traditional Medicare. This trend suggests that severely ill patients may face barriers in accessing necessary care within Medicare Advantage plans.

“We found that people in their last year of life left Medicare Advantage and went back to traditional Medicare at double the rates of other enrollees.”
[20:38]

Conclusion and Looking Ahead

Jessica Mendoza wraps up Part 1 of the series by emphasizing the critical nature of these findings and hints at further exploration in subsequent episodes. The investigative team plans to delve deeper into how Medicare Advantage plans not only inflate diagnoses but also potentially withhold essential care from those who need it most.

“Another strategy is withholding care from patients who actually need it. The Journal reported on this, too.”
[20:38]

Final Thoughts

The first part of the "Medicare, Inc." series unveils a complex web of financial manipulation and ethical breaches within the Medicare Advantage program. By artificially inflating patient diagnoses, private insurers are siphoning billions from a taxpayer-funded system, raising critical questions about the integrity and sustainability of Medicare Advantage.

Stay tuned for Part 2, where Ana Wilde Matthews will further investigate the implications of withholding care and the broader impact on beneficiaries.

Notable Quotes with Timestamps:

• “Medicare Advantage is sort of dominated by these huge insurance companies like UnitedHealth Group, Humana, Aetna and Elevance.”
  [00:37]

• “What we found was that Medicare Advantage insurers were basically gaming the system to get paid billions of dollars more and at the same time creating barriers to.”
  [01:17]

• “So, for example, somebody who's obese might generate, like, a 30% higher payment for the insurer than the same person who's not.”
  [04:58]

• “After working at the house calls program for about a year, Kristin told us that she eventually began doing the tests she was asked to do. And after that, she got a raise.”
  [09:51]

• “The problem here is that insurers are layering diagnoses on patients, generating billions and billions and billions of dollars more in taxpayer funded reimbursement.”
  [19:33]

Key Takeaways:

• Medicare Advantage plans are a significant component of Medicare, managed by private insurers who receive government payments based on patient health conditions.
• Investigative reporting revealed that insurers manipulate patient diagnoses to secure additional federal funds, leading to an extra $50 billion over three years.
• UnitedHealth emerged as a primary offender, utilizing questionable practices like diagnosing rare conditions without substantiated evidence.
• Case studies, including that of nurse practitioner Kristin Bell, highlighted ethical dilemmas and systemic pressures to inflate diagnoses.
• The misuse of Medicare Advantage funds contributes to the escalating costs of the U.S. healthcare system, with taxpayers bearing the financial burden.

For more insights and detailed reporting, tune into "Medicare, Inc. Part 1: How Insurers Make Billions From Medicare" on The Journal, available on Spotify and The Wall Street Journal.