The Spotlight Turns on Insurers: Medicare Advantage Faces a Congressional Reckoning

For years, America’s biggest health insurers had a familiar role in Washington: powerful, essential, and largely untouchable. When healthcare costs went up, they blamed hospitals, drugmakers, and doctors. When patients complained about delays or denials, insurers said they were just enforcing rules that would help keep costs down.

That era is hopefully ending.

Insurance executives spent last week testifying before Congress where the political climate has shifted sharply against them. The focus? Medicare Advantage, the crown jewel of private insurance growth. Once seen as efficient and innovative, recent studies suggest the program may be more about boosting profits than improving care. And the twist: this scrutiny is coming from Sen. Chuck Grassley, one of the program’s original architects. When a program founder starts asking hard questions, people pay attention.

From Policy Win to Political Target

Medicare Advantage now covers over half of all Medicare beneficiaries. It’s popular with seniors, profitable for insurers, and deeply woven into the broader insurance market. For years, that made it politically untouchable.

But popularity has a flip side. The program is huge, expensive, and now under a microscope. Investigations from the Department of Health and Human Services, the Wall Street Journal, and STAT all reveal that major insurers — especially UnitedHealth Group — have been using risk adjustment to pull in billions more than expected. Risk adjustment is supposed to pay plans more for sicker patients, but the findings have found that insurers have created a cottage industry to make patients appear sicker, without even going to their physician, so they can get paid more. Further studies have found that patients were subsequently not even treated for these supposed increased illnesses. What??

Grassley’s team went even further. After reviewing more than 50,000 pages of UnitedHealth documents, they concluded that risk adjustment isn’t about better care anymore. It is a highly coordinated, data-driven system designed to maximize payments. Nurses visiting patients’ homes, doctors incentivized to code aggressively, AI tracking diagnoses — all are focused on increasing risk scores and federal payouts.

Even worse, UnitedHealth seems to stay one step ahead of regulators, switching to new codes when old ones are blocked, and even selling these tools and standards to competitors. The question is no longer whether Medicare Advantage saves money. It is whether or not the federal government can figure out if it is paying more for better coding, or better care.

Hospitals Step Into the Spotlight

As insurers face scrutiny, hospitals are piling on with their own testimony about issues over insurer market power. The American Hospital Association points out that a handful of insurers cover roughly two-thirds of Americans, leaving hospitals and patients with little choice. That dominance has led to narrow networks, prior authorization hurdles, delayed payments, and mid-year coverage changes. Each of these can both delay care and frustrate doctors.

According to the AHA, physicians report patients abandoning treatment or suffering harm due to administrative roadblocks. They also note that insurers’ ownership of practices, pharmacy benefit managers, and payment systems have made matters worse, by allowing insurers to steer care to their own entities while tightening controls and costs elsewhere.

For now, hospitals are observers and witnesses, but history suggests Congress rarely stops scrutiny with just one industry segment.

What’s Next?

Insurers have shifted blame back to hospitals too, pointing to hospital consolidation, high service use, and private equity as drivers of rising costs. Lawmakers are listening, especially on hospital pricing and market power. Insurers are first in the hot seat - and rightfully so. Medicare Advantage was supposedly built on trust, with private industry telling Congress they could deliver better care at lower costs than the government. Now, one of its founders and longtime supporters, Grassley, has a report showing why that trust has frayed.

But hospitals are preparing for what may come next by drawing a contrast: the American Hospital Association argues that hospitals provide round-the-clock care, treat the sickest patients, and have kept spending relatively stable while insurer profits and consolidation have soared. Whether Congress will buy that argument remains to be seen, since the truth is that hospitals have also raised their prices significantly and have also done their fair share of consolidating. While they may be the lesser evil today, Congress should still look under their hood. Reforming healthcare is a system-wide initiative.

A Turning Point, Not a Verdict

This isn’t the beginning of the end of Medicare Advantage, and it doesn’t make hospitals heroes either. What it does signal is a shift: insurers are now defending both their business practices AND the legitimacy of a program they helped shape and manipulate. The scale and sophistication of one company’s operations show the problem is structural, not just procedural.

Congress now faces a choice: tighten incentives and rules, risking pushback from powerful insurers, or let Medicare Advantage evolve in ways lawmakers can’t fully control and the American people worse off for it.

Insurers are under the spotlight. Hospitals are watching. And Washington is sending a clear message: if you profit from public programs, we will eventually hold you accountable.