What Does DOGE Mean for Medicare Beneficiaries?

DOGE – the controversial federal cost-cutting agency headed by Tesla and SpaceX head Elon Musk, stands for Department of Government Efficiency.

And lately, it’s been sinking its teeth into Medicare.

To be sure, there’s a lot of waste and abuse that needs to be cut––and that was known before DOGE came along. A General Accounting Office report from 2024 found that the Medicare and Medicaid programs had issued some $100 billion in “improper payments” in 2023 alone. That is payments that were either made incorrectly or that never should have been paid out at all.

According to the GAO report, Medicare and Medicaid by themselves accounted for an estimated 43 percent of total federal government waste for the year.

Nonetheless, some people are worried that DOGE will overdo the cuts, and wind up cutting essential programs and services along with the waste.

Thus far, though, it appears that legitimate Social Security beneficiaries have nothing to fear. Both Congress and DOGE are focusing their attention on cutting wasteful spending, cracking down on Medicare fraud—especially in Medicare Advantage programs, a few of which have been implicated in overbilling scams that defraud the taxpayer–and stopping improper payments to ineligible or deceased beneficiaries.

While exact figures are still being assessed, the potential savings from addressing these issues could be substantial, benefiting taxpayers and the overall sustainability of the Medicare program.​

The focus has not been on cutting actual benefits going to the seniors who rely on this program. In fact, if DOGE is successful at meaningfully slashing up to $100 billion or more in wasteful spending per year, the projected insolvency date for Medicare programs could be pushed back for years.

In fact, we’re already seeing some progress: The Hospital Insurance (HI) Trust Fund, which finances Medicare Part A, was previously projected to be depleted by 2031. That’s the date at which Medicare revenues from payroll taxes will no longer pay promised benefits. After that point, Congress will have to allocate additional money to keep paying benefits – and pressure to cut benefits would become intense.

But Social Security actuaries have recently pushed back their projected insolvency date five years, to 2036. And that was even before DOGE came on the scene.

This provides a welcome respite for Medicare. And the more Congress and DOGE and the Trump Administration can reduce or eliminate wasteful spending, the longer Medicare can survive paying current benefit levels without additional Congressional spending.

By tackling inefficiencies and reducing improper payments, DOGE’s initiatives may further extend the solvency of the Medicare Trust Fund. 

Implications for Medigap

For those with Medigap plans, which supplement original Medicare by covering out-of-pocket costs, increased efficiency within Medicare could lead to more predictable expenses over time.

That means premiums for Medicare supplement insurance should become more stable as well.

Improving Medicare efficiency across the board should also reduce upward pressure on Medicare Part D premiums as well. 

Implications for Medicare Advantage

Medicare Advantage plans may come under more pressure to account for the benefits they pay out, and submit to more diligent Congressional and Medicare oversight.

In conclusion, DOGE’s focus on enhancing efficiency within Medicare holds the promise of significant benefits for beneficiaries. By addressing waste and fraud, these efforts aim to improve the program’s financial health, ensuring its sustainability and reliability for years to come.​

Naturally, my team and I will be monitoring developments in Medicare, Medigap, and Medicare Advantage. And we’ll be sure to keep you posted, both through this newsletter and our widely-read blog.

And your MediGap Advisors Personal Benefits Manager is also there to help answer any questions or concerns you may have.

Thanks as always for reading, and keep a lookout for next month’s installment of the Health and Wealth Newsletter.

Here’s to your health and wealth,

Wiley P. Long, III
President – MediGap Advisors

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