With less than a month from the midterm elections, President Trump announced that more than 20 million seniors would get a payment of “nearly $100” to help with their Medicare Part B premiums. The White House later said the actual amount of the one-time payment is $90 and will come from the Medicare Improvement Fund which was created in 2008 to improve traditional Medicare. The White House says it holds about $2 billion.
Congress had been planning to tap the fund later this year to help finance a modest Medicare pay increase for doctors and extend several health programs, including funding for community health centers and bonuses for doctors participating in certain alternative payment models. With the fund now being used for the $90 payments, lawmakers will have to find the money elsewhere or put those plans on hold.
Money is money and I am all for helping American seniors with their medical bills, but $90 won’t cover even half of one month’s premium. After a record increase this year, the standard Part B premium is $202.90
But what’s not in the announcement is far more important than what’s in it: Neither Trump nor CMS Administrator Mehmet Oz has said a word about clawing back the tens of billions of dollars Medicare overpays private insurers every year. Neither did any administration before them, at least not in a way that stuck. In 2026 alone, the Medicare Payment Advisory Commission (MedPAC) estimates Medicare will pay Medicare Advantage plans $76 billion more than it would spend on the same people in traditional Medicare.
So the $2 billion Trump plans to hand out is less than 3% of what insurers will collect in excess payments this year.
If the $76 billion troubles you then the bigger picture is going to be truly startling. The Committee for a Responsible Federal Budget projects that if nothing changes, overpayments will total about $1.2 trillion through 2035. That is all money that big insurance companies like UnitedHealthcare, Aetna and Humana get to keep. And it’s money that they don’t want to give up – again with taxpayers being stuck with the bill.
And seniors themselves pay part of that bill. CRFB estimates Medicare Advantage overpayments will add $230 billion to Part B premiums over the next decade. Those higher premiums are paid by everyone enrolled in Part B, including seniors in traditional Medicare who never signed up for a private Medicare Advantage plan.
