At Hearing, Senator Warren Slams Medicare and Social Security Public Trustee Nominee Over "Shocking and Deeply Unethical" Financial Conflicts of Interest
Hearing
"Mr. Kouzoukas, you've been nominated to serve as the Public Trustee of the Medicare and Social Security Trust Funds. I have concerns about your conflicts of interest. This shouldn't be a surprise--I sent you a letter outlining those concerns. Mr. Chairman, I'd like to make that letter part of the hearing record.
The position of public trustee was created in the 1980s to give the public a voice in the Board of Trustees' solvency projections for Medicare and Social Security. A big factor influencing Medicare solvency today is the growth of Medicare Advantage -- a program that allows for-profit insurance companies to sell Medicare coverage that experts say is on target this year to overcharge the government by $75 billion. In other words, Medicare Advantage has a lot to do with threatening the solvency of Medicare.
Mr. Kouzoukas, you sit on the board of Clover Health, a for-profit insurance company that, according to its most recent SEC filing, receives a "substantial portion" of its total revenue from Medicare Advantage premiums. How much are you paid for your work at Clover?
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Okay, and what's the dollar amount? That's what I'm asking.
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So you don't know the amount you're getting paid from Clover?
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Then how about you tell me?
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Could I have a dollar amount please?
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Okay, you did a financial disclosure last year. Would you like to tell me what you said on your financial disclosure, which you signed under oath?
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Okay, so you received $100,000 from Clover for your service. If confirmed as a Public Trustee, do you plan to quit the Clover Board?
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It's really easy. You can say yes or you can say no.
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Is that a yes or no? Do you plan to quit the job for which you were paid $100,000 a year?
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I mean, really. You know you're gonna have to answer this question. Is it yes or no? Are you planning to resign the job that pays you $100,000 a year while you are a trustee for Medicare?
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I'm not gonna get into why the President nominated you. What I want to know is are you going to keep a job where you get paid by a for-profit outfit, somewhere in the neighborhood of $100,000 a year while you keep your government trustee job? Can you answer that question?
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Okay. I'm going to take that as a yes because I'm going to assume that if you were going to quit that job, you would be really happy to tell me that right now before we go into the question of what it means for you to keep this job. Mr. Kouzoukas, as we both know, as a member of the board, corporate law requires you to help Clover maximize its profits. So for example, if you highlighted the amount of fraud that Medicare Advantage undergoes every year and how that fraud is undermining the solvency of Medicare, that could lead to policies that might limit the Medicare Advantage Program. And if that happened, Mr. Kouzoukas, would limiting the Medicare Advantage Program undercut the profitability of Clover, the company that by law you are supposed to be watching out for? That was a question.
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All right, question. So, my question is as you are, if you are on the board of Clover, you are legally obligated to try to help Clover to improve its profitability over time or at least sustain its profits. That's Corporate Law 101, right? So if you are also serving as a Medicare trustee, I just want to be clear here. If the focus in the Medicare program is on the amount of fraud, that is currently in the Medicare Advantage program, I think it's reasonable to assume that could lead to reducing the amount of money that we put into Medicare Advantage, to putting more restrictions on Medicare Advantage, to saying we've got to put a cop on the beat, maybe cut it out altogether. What I'm asking you is, would that injure Clover? That is, would it reduce Clover's profitability?
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I appreciate that, but I asked you a pretty straightforward question. If you're actually going to be a Trustee, on behalf of the American people and people who care about the solvency of Medicare, that I think you ought to be able to answer it. If Medicare currently, as it stands, put more restrictions on Medicare Advantage, would that likely cut into the profitability of Clover, the company from which you receive more than $100,000 in compensation annually?
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I know the question I'm asking. Could you answer my question, please?
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You want to be a Trustee for the American people? You ought to be able to answer that question.
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No, it deserves an answer from you. You want to be the Trustee? Then answer the question. If Medicare cut what goes into Medicare Advantage, would that hurt Clover's profitability? That's not a hard question. And in fact, Clover has already pretty much answered that in its public documents. So could you give an answer to that, please?
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I know what's important to focus on here. That's why I'm here is to ask the questions that are important to focus on. Could you answer my question, please?
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That is not my question. Can you answer my question or are you just flatly refusing?
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Then answer my question.
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No, it's a question that's a straight financial question. You know, Mr. Kouzoukas I think you think you're gonna get away with this by just not answering the question and not having any clip that admits how much money you're taking from a private insurance company that makes its money through Medicare Advantage, at the same moment that you're trying to take a public role that will influence whether we focus on the fraud in Medicare Advantage, or whether we turn a blind eye to it.
Let's be clear. If Mr. Kouzoukas ignores the fraud, he helps Clover. If he focuses on the fraud, he hurts Clover. The conflict of interest here is so big and so pervasive that there is no action that Mr. Kouzoukas can take that doesn't either help or hurt Clover, the company that pays him $100,000 a year to sit on its board and watch out for the company. And there is no waiver that can change that fact.
This kind of conflict is shocking--and it is deeply unethical. Not a single other trustee has ever received compensation from an insurance company while acting as a Medicare trustee.
If you won't step down from the Clover board, then you should withdraw your nomination. And if you do not withdraw, given the clear conflicts posed by your board service, I will strongly oppose your nomination and I will encourage every other senator in this body to do so as well."
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