WASHINGTON (TNND) -- The nomination of celebrity doctor and former Senate candidate Mehmet Oz could bring big changes to the nation's largest and most influential health programs that account for a significant portion of government spending as the Trump administration prepares to take office.
President-elect Donald Trump announced the selection of Oz on Tuesday to lead the Centers for Medicare & Medicaid Services, an agency that oversees about 25% of all government spending and shapes the healthcare coverage of more than 150 million Americans through Medicare, Medicaid and Affordable Care Act plans.
The CMS administrator is not as high-profile as other Senate-confirmed posts but has tremendous influence over $1 trillion in taxpayer funds being spent and set the payment rates for Medicare for hospitals, doctors and other care.
"The administrator of CMS is usually not a household name but has an enormous influence over the everyday lives of many Americans. Over 150 million people are covered by health programs CMS oversees, including Medicare, Medicaid, and the Affordable Care Act. You can think of the CMS administrator as the CEO of the biggest health insurance company in the country," said Larry Levitt, executive vice president for health policy at KFF, a nonprofit health policy research, polling and news organization.
House Speaker Mike Johnson, R-La., has said health care overhauls will be a prominent piece of Trump's agenda in his second term. But it's unclear exactly what that may look like and what kind of support in Congress could be generated for changes to the country's major health programs.
Trump has vowed to protect Medicare, the very popular federal program that provides health coverage for Americans 65 and older and some younger people with qualifying medical conditions. Medicare is facing a looming budget shortfall that would bring automatic benefit cuts without congressional intervention to shore up its financing by a projected deadline of 2036.
He has also said he wants to overhaul the Affordable Care Act, notably saying during a debate that he has "concepts of a plan" and has not offered specifics.
Another possible venue for big changes is Medicaid, which covers over 70 million low-income families. GOP lawmakers have sought ways to reduce the financial burden Medicaid puts on the federal budget and could enact some changes to the program as they search for ways to shrink government spending.
"President-elect Trump has said Medicare and Social Security cuts are off the table, and defense cuts likely are as well. Medicaid is the next biggest program in the federal budget and will have a big target on its back. Republicans have long wanted to reduce spending on Medicaid, and next year could be their opening to do so. But, there will be big pushback against Medicaid cuts from governors, patient groups, hospitals, nursing homes, and insurers," Levitt said.
Oz is a noted supporter of Medicare Advantage, where federal benefits are provided through private insurers, and has pushed for expansion of it. During his unsuccessful Senate campaign, one of his policies was a "Medicare Advantage for All" plan to expand the program. Around 33 million Americans are covered by Medicare Advantage plans, around the same level that are covered by traditional Medicare.
If confirmed as administrator, he would have significant sway over the policy for the program, including the reimbursement for the plans that have been at issue during the Biden administration. Some insurance companies and GOP lawmakers have accused the administration of cutting payments, which could be reversed under an expansion under Trump.
Medicare Advantage plans are becoming more popular, but the program has also been a source of widespread fraud. In his announcement of Oz as the CMS nominee, Trump said he would help cut waste and fraud.
Trump and other congressional Republicans have also been supportive of Medicare Advantage, arguing it provides more benefits than government-run programs. Some GOP lawmakers have proposed making it the default option for Medicare enrollment, though that was not part of Trump's policy platform.
Advocacy groups that support the expansion of Medicare Advantage have been supportive of Oz's nomination.
"Dr. Oz recognizes the value of Medicare Advantage and the high-quality, affordable, and comprehensive health care it provides to more than 34 million seniors and individuals with disabilities," said Mary Beth Donahue, president and CEO of Better Medicare Alliance. "Medicare Advantage delivers better health outcomes at a lower cost than Fee-For-Service Medicare, which is why more than half of Medicare beneficiaries now choose Medicare Advantage."
Another question for the incoming administration is how it will handle Medicare's new ability to negotiate the cost of some prescription drugs. Trump has not announced if he would continue allowing Medicare to negotiate costs, which is expected to save the government billions.
Medicare so far has negotiated prices on 10 drugs treating blood clots, cancer, heart disease and diabetes. Another 30 drugs will be chosen under the next two years if the incoming Republican trifecta keeps the policy in place, which CMS directly oversees.
While Oz does not have experience running a bureaucracy as expansive as CMS, his nomination has received some support from Senate Republicans that will need to confirm him to the post.
Senator Bill Cassidy, R-La., who will chair the Senate committee overseeing healthcare in the next Congress, posted on X that he was glad to hear of Oz's nomination.
"It has been over a decade since a physician has been at the helm of CMS, and I look forward to discussing his priorities," Cassidy said. "This is a great opportunity to help patients and implement conservative health reforms."
Democrats have been more likely to oppose Oz, pointing to his history of promoting questionable medications and treatments and stances on abortion.
"Even putting aside the raft of alarming pseudoscience Dr. Oz has previously endorsed, it is deeply disappointing to see someone with zero qualifications being announced to head up such a critical agency," Sen. Patty Murray, D-Wash., said in a statement. "We need serious leaders when it comes to protecting Americans' health care and bringing down costs -- not TV hosts whose main qualification is their loyalty to Donald Trump."