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The bait and switch of privatization
Kay W.
October 15, 2025
Last year, seniors picking Medicare coverage faced some tough choices. This year might be even worse.
The enrollment period for 2026 Medicare coverage starts Wednesday, and it is likely to be a difficult one for many enrollees. For the second year in a row, big Medicare insurers are getting rid of some plans, trimming popular benefits and increasing out-of-pocket costs such as deductibles.
“This year is a nightmare,” said Marcia Mantell, a retirement-planning consultant. Medicare enrollees “have to know more than they ever have had to know…it’s all the hidden stuff,” she said.
Behind the turmoil are business realities. Medicare insurers have seen their profits squeezed by higher-than-expected medical spending and regulatory changes. Now, some of the biggest are trying to improve their margins by dumping unprofitable products and by controlling costs better.
The moves might make their products less appealing. The industry is projecting that enrollment in private Medicare plans, known as Medicare Advantage, will shrink in 2026. That would be the first time in 15 years, according to the health researcher KFF.
“What many of the companies have talked about is really pricing for profitability rather than for growth,” said Lisa Gill, a senior analyst at J.P. Morgan.
Pricing for profitability rather than growth means insurers offered low prices and perks in order to burrow into the public Medicare program and ensure market share (which they can then use to justify further privatization). Now ow that they’re securely embedded like ticks sucking the money out of the public program, they’ll raise prices and cut benefits.
This is a constant in privatization. Ohio vastly expanded school vouchers - the money goes 90% to the Catholic Church in Ohio- and Catholic schools offered artificially low tuition in order to spike growth (and gut public schools). Now that private schools are assured public money and they have a group of people who don’t want to change their children’s schools again, they’re all raising tuition. Gotcha!
Lots and lots of modern countries privatize some public services. Denmark. for example, has privatized some of the public transportation system, an approach they call “franchising”, and it’s great. It genuinely serves the public - it’s a good deal for the public.
The difference is campaign finance - money in politics. Denmark regulates campaign finance so private entities can’t buy lawmakers, thus the companies that provide public services are properly regulated. When the US privatizes, the private entity benefitting (whether it’s the Catholic Church or an insurer) immediately buy some lawmakers to resist or gut regulation.
We can’t privatize in the US without huge rip offs of the public because we don’t regulate the private contractors properly. We don’t regulate the private contractors properly because we don’t regulate campaign finance, so the contractors buy lawmakers and laws that benefit the contractor, not the public.
The United States will not work for regular people again until we flush out the vast bribes going to lawmakers.
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