UnitedHealthcare’s Medicare Advantage Empire: Profits, Legal Battles, and $22 Million in Lobbying to Protect Its Bottom Line

Medicare Advantage (MA) is a “fast-growing alternative to original Medicare” that covers 32.8 million people—54% of those eligible for Medicare—and has been criticized as a costly “privatized” version of the program that is vulnerable to “billing abuse” by insurers.

Notably, the radical Project 2025 recommended making MA the default option for new Medicare enrollees, which would “‘supercharge the privatization‘” of Medicare.

A 2022 New York Times analysis found that private insurers “exploited” the MA program, with nine out of ten of major insurers accused of fraud or overbilling, and taking billions in overpayments that rival the costs of major federal agencies like the FBI and EPA.

In 2021, former senior Health and Human Services Dept. official Richard Kronick reported that MA plans “cost taxpayers tens of billions of dollars more” than original Medicare, warning federal MA spending could grow by $600 billion by 2031, with two-thirds going straight to insurers’ profits. MedPAC, Congress’ official Medicare advisory office, said “a major overhaul of MA policies is urgently needed” as it reported that Medicare would spend over $83 billion more on MA enrollees in 2024, totaling $591 billion since 2007. MedPAC also warned MA’s growth puts regular Medicare in risk due to remaining enrollees being higher risk. 

An August 2021 Kaiser Family Foundation (KFF) report found Medicare Advantage enrollment had doubled over the previous decade, leading to increased payments that could push up premiums for all Medicare beneficiaries and “contribute to the financing challenges facing the Medicare HI Trust Fund.”

The MA insurer market is “highly concentrated” among just seven firms, with 29% of MA enrollees—over 9 million people—covered by UnitedHealthcare, as of 2024.

In late September 2024, UnitedHealth subsidiaries sued the Centers for Medicare & Medicaid Services (CMS), claiming the agency “arbitrar[ily] and capricious[ly]” downgraded its “star rating” following the evaluation of a customer service call. The complaint, filed in the Eastern District of Texas, is “seek[ing] an injunction by the court requiring the CMS to recalculate their star ratings without considering the disputed call.”

Star ratings can determine if an insurance plan can “receive bonuses and enroll more members,” with poor ratings often leading to “terminated contracts and an inability to market to new customers.” In 2024, CMS paid $11.8 billion in Medicare Advantage plan bonuses, higher than “every year between 2015 and 2022,” despite the “expiration of pandemic-era policies that temporarily increased star ratings for some plans. UnitedHealthcare received $3.4 billion in bonus payments, 29% of all bonus spending and the most of any Medicare Advantage insurer.

The case is before Judge Jeremy D. Kernodle, a Trump appointee and prominent Federalist Society figure who in 2023 took travel, meals, and lodging from the right-wing Federalist Society and the Scalia Law School, which is also closely linked to right-wing court “architect” Leonard Leo and has been seen as a “an easy pass-through” for donors to influence judges.

Now, a new Accountable.US review has found that UnitedHealthcare—which has spent over $22 million while lobbying on MA issues since 2021—disproportionately relies on a relatively small pool of MA beneficiaries for its total revenues. UnitedHealthcare relied on its MA segment, which made up only 15% of its total enrollment, for 46% of its $281 billion in total revenue in 2023. 

• UnitedHealthcare—which covers 29% of MA enrollees—relied on its MA-dominated Medicare & Retirement segment for 46% of its $281 billion in total 2023 revenue, although MA enrollees comprised only 15% of its total enrollment that year. It has also stated that its $31 billion in 2023 revenue growth was “primarily driven” by MA and Medicaid enrollees.

• UnitedHealthcare parent, UnitedHealth Group—which saw $91.5 billion in net income and spent $56.3 billion on shareholder handouts from 2019 through 2023—has complained that MA funding “continues to be pressured” and threatened benefits cuts and cost-cutting.

• UnitedHealth Group—the fourth-largest U.S. company by revenue—has faced widespread criticism of its size, with former Centers for Medicare & Medicaid Services (CMS) Administrator Don Berwick saying it has “‘grown too big for this country’s good.'”

• UnitedHealthcare has faced a class action lawsuit for illegally using an algorithm to deny ill seniors rehabilitation care, and at least three Justice Department lawsuits for illegally mischarging MA—including one complaint alleging the insurer took part in potentially billions of dollars in MA overcharges.

• UnitedHealth Group has spent $22.3 million while lobbying on Medicare Advantage since Q1 2021. UnitedHealth has also been behind “‘astroturf‘” MA industry group the Better Medicare Alliance, which itself has spent $4 million on federal lobbying since Q1 2021 and counts a longtime UnitedHealth executive and current Senior Advisor as a board member.