Some of the major health insurance companies that offer Medicare Advantage programs are being investigated by the U.S. Department of Justice for fraud, after multiple whistleblower complaints. The New York Times first reported this on Oct. 8 in an article entitled, “The Cash Monster Was Insatiable: How Some Insurers Exploited Medicare for Billions.” The large insurance companies United Health (27% of Medicare Advantage market share), Humana (17%), Kaiser (6%) and Cigna (2%) have been accused of fraud by either insider whistleblowers or the Department of Justice directly. Optima Medicare Advantage has not been involved in these allegations.

This is how Medicare Advantage programs work. Medicare pays the insurance company a set amount, averaging $11,500 per year, to manage and pay for all the care for each person who enrolls with the company. If the company can do this for less than $11,500, it makes money on that person. There are incentives such as free gym memberships to enroll healthy people who will not use health services much, leading to more profit.

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