By Russell R. Barksdale, Jr.
She gleams. We say it without thinking. The yacht at harbor—she’s a beauty. The sports car idling at the light—look at her lines. Even institutions we build to care for one another inherit the feminine—the healthcare provider that “serves,” that “holds,” that “heals.”
And yet, in American healthcare, the thing most tenderly protected, most richly fed, most carefully shielded, is not the patient, nor the nurse at the bedside, nor the healthcare provider keeping vigil through the night. It is the balance sheet of the insurance company.
If you want to understand the peculiar genius and deep dysfunction of our system, don’t look at outcomes first. Look at incentives. Look at where the money flows when no one is watching or distracted by public headlines.
Earlier this month without fanfare, the Centers for Medicare & Medicaid Services finalized payment rates for Medicare Advantage plans for 2027. The initial proposal—an anemic 0.09% increase—hinting however briefly—at fiscal discipline and accountability. It acknowledged what policymakers across the ideological spectrum have admitted for years—the program is overpaying private insurers.
That moment did not last.
After a predictable and well-funded campaign from industry stakeholders, the final rule emerged with a 2.48% increase—roughly $13 billion in additional taxpayer dollars. And that is before the quiet alchemy of “coding intensity,” the industry’s antiseptic phrase for documenting patients as sicker than they are, thereby justifying higher payments. When that factor is included, the real increase approaches 5%.
The scale is difficult to overstate. The Medicare Payment Advisory Commission estimates that upcoding alone will drive $22 billion in excess payments this year, part of a broader overpayment problem nearing $76 billion annually. Over a decade, the tab may exceed $1.3 trillion.
This is purely a corporate subsidy by both political parties.
The largest insurers are not fragile wards of the state. They are among the most profitable enterprises in the American economy. In 2025, UnitedHealth Group reported more than $12 billion in profit. Cigna and Elevance Health each cleared billions more. These are sophisticated, disciplined organizations that understand risk, pricing, and leverage. Surely, they need enhanced protection at the expense of providers and taxpayers.
Now turn, for a moment, from the boardroom to the bedside.
Home health agencies—those quiet lifelines that allow frail seniors to remain in their homes—have now endured four consecutive years of reimbursement cuts. The 2026 rule trims another 1.3%, following reductions in each of the prior three years. In isolation, any one cut might be survivable. In sequence, they weaken operating structures.
Ask a home health administrator how to recruit nurses in this environment. Ask how to retain aides when wages in retail or hospitality begin to rival those in caregiving. Ask how to expand access when each additional patient carries the risk of financial loss.
There is no clever accounting maneuver that solves that equation.
Hospitals face a similar arithmetic. Between 2022 and 2024, general inflation rose more than 14%. Medicare inpatient payments rose just over 5%. The gap is not theoretical. It is borne in negative operating margins, in deferred capital projects, in staffing ratios that inch closer to the line of patient safety.
In 2023 alone, hospitals absorbed approximately $130 billion in underpayments from Medicare and Medicaid. More than 700 rural hospitals operated at a loss last year, and hundreds faced margins so thin they could not withstand a modest shock—a bad flu season, a supply disruption, a spike in labor costs.
These are not abstractions. When a hospital closes, an entire community loses its front door to the healthcare system. When a home health agency pulls back, a patient who might have recovered at home finds herself in an emergency department instead—at far greater cost, and often with worse outcomes.
So we arrive at a strange inversion. The entities that assume insurance risk are buffered and rewarded when evidence suggests systematic overpayment. The entities that assume clinical risk—the ones that hire, train, and show up—are asked, year after year, to do more with less.
We have, in effect, socialized the costs of care while privatizing a meaningful share of the profits.
There is a deeper irony still. Medicare Advantage continues to grow rapidly, with seniors enrolling in these plans at accelerating rates. Many are drawn by marketing, supplemental benefits, or their prior company’s coverage plans. These are not irrational choices given a limited knowledge of options.
But those options are shaped by policy. When the government pays a premium to private plans, when it allows aggressive coding practices to persist—it tilts the playing field. It nudges beneficiaries toward a model that is, paradoxically, more expensive for the public program designed to protect them.
None of this is inevitable.
Policymakers could align payments more closely with actual risk. They could tighten oversight of coding practices that inflate costs without improving care. They could rebalance reimbursement so that providers—the ones who cannot offshore a bedside or automate compassion—are not perpetually subsidizing the rest of the system.
What is required is not a revolution, but a reordering of priorities, and the education of our constituents.
If we insist on speaking of our institutions in the feminine, then let us be honest about what we are nurturing. Right now, the system is exquisitely attentive to capital and curiously indifferent to care. It feeds the spreadsheet and starves the bedside.
At some point, the country must decide what it actually values. Because the current arrangement is not an accident. It is a reduction of options and blind, weighted choices—made repeatedly, reinforced annually, and paid for, quietly but relentlessly, by the very people it was meant to serve.
Hook, line, and sinker.
Russell R. Barksdale, Jr., PHD, MPA/MHA, FACHE is President and CEO Waveny LifeCare Network.
