September 28, 2023

At Hearing, Senator Warren Slams Medicare and Social Security Public Trustee Nominee Over “Shocking and Deeply Unethical” Financial Conflicts of Interest

Demetrios Kouzoukas Currently Serves on Board of For-Profit Private Health Insurer Selling Medicare Advantage Plans, Refuses to Step Away from the Role if Confirmed Warren: “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.”

Video of Exchange (YouTube)

Washington, D.C. — At a Senate Finance Committee nomination hearing for Demetrios Kouzoukas, nominee for Public Trustee on the Board of Trustees for the Medicare and Social Security Programs, U.S. Senator Elizabeth Warren (D-Mass.) questioned Mr. Kouzoukas about financial conflicts of interest arising from his position on the Board of Directors of Clover Health, a private health insurer that derives a significant portion of its revenue from Medicare Advantage. Despite these conflicts of interest, Mr. Kouzoukas refused to commit to stepping away from his role at Clover if confirmed.

Ahead of the hearing, Senator Warren sent a letter to Mr. Kouzoukas raising concerns that these conflicts of interest would create personal and financial pressures to downplay the fiscal threat that Medicare Advantage poses to the financial health of the Medicare Trust Funds, and potentially recommend policy changes that would serve to further entrench the program’s hold over Medicare. 

Transcript: Nomination Hearing for Marjorie A. Rollinson, to be Chief Counsel for the Internal Revenue Service, and Demetrios L. Kouzoukas and Patricia Hart Neuman, to be Members of the Board of Trustees of the Federal Supplementary Medical, Hospital Insurance, Old-Age and Survivors Insurance, and Federal Disability Insurance Trust Funds.
U.S. Senate Committee on Finance
Thursday, September 28, 2023

Senator Elizabeth Warren: 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?  

Demetrios L. Kouzoukas, Nominee for Public Trustee on the Board of Trustees for the Medicare and Social Security Programs: Senator, I am paid in accordance with the company’s process for –

Senator Warren: Okay, and what’s the dollar amount? That’s what I’m asking.

Mr. Kouzoukas: Well, there’s a portion of the –

Senator Warren: So you don’t know the amount you’re getting paid from Clover?

Mr. Kouzoukas: I do, Senator.

Senator Warren: Then how about you tell me?

Mr. Kouzoukas: Well, there’s a proportion that relates to the –

Senator Warren: Could I have a dollar amount please?

Mr. Kouzoukas: Well, it also depends on the year and the time.

Senator Warren: 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?

Mr. Kouzoukas: I believe, Senator, as laid out in your letter, you pointed out the payment that was made from Clover with regard to 2022 and the compensation therein being in the category of $100,000.

Senator Warren: 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?

Mr. Kouzoukas: I appreciate the opportunity to address your question. The role –

Senator Warren: It's really easy. You can say yes or you can say no.

Mr. Kouzoukas: Senator, the role of the Trustees of the Social Security –

Senator Warren: Is that a yes or no? Do you plan to quit the job for which you were paid $100,000 a year?

Mr. Kouzoukas: Senator, I'm grateful to the President and his team for the review of my credentials and qualifications –

Senator Warren: 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?

Mr. Kouzoukas: Senator, the review of my current activities and my credentials and qualifications is one that all under nominees undergo. And that's one that led to the president putting my nomination before this body. I'm grateful for that. And if given the opportunity –

Senator Warren: 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?

Mr. Kouzoukas: Senator, the role of the Trustees –

Senator Warren: 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.

Mr. Kouzoukas: I'm not sure I understood the question.

Senator Warren: 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?

Mr. Kouzoukas: Senator, I think all Americans and I especially would share your attentiveness to the questions of fraud. I don’t think that –

Senator Warren: 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?

Mr. Kouzoukas: Senator, I think that the question you're asking –

Senator Warren: I know the question I’m asking. Could you answer my question, please? 

Mr. Kouzoukas: Yes.

Senator Warren: You want to be a Trustee for the American people? You ought to be able to answer that question.

Mr. Kouzoukas: The question you're asking is one that deserves a greater context about the role of the Trustee. 

Senator Warren: 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?

Mr. Kouzoukas: I think, Senator, that what's important to focus here on –

Senator Warren: 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?

Mr. Kouzoukas: Yes, Senator. I think that, if confirmed, Dr. Neuman and I would be outside set of eyes and ears –

Senator Warren: That is not my question. Can you answer my question or are you just flatly refusing?

Mr. Kouzoukas: Senator, I be delighted to –

Senator Warren: Then answer my question.

Mr. Kouzoukas: And I think that the question is one that is in the context of a –

Senator Warren: 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.


Senator Warren is an outspoken advocate for stronger ethics standards for federal employees – especially those that close the revolving door between public and private employment – to prevent corporate influence over government institutions. She has secured historic ethics commitments from multiple top government officials: 

  • In August 2023, Senator Warren announced that she secured historic ethics commitments from Dr. Monica Bertagnolli, President Biden’s nominee for director of the National Institutes of Health to halt the revolving door between former federal employees and giant pharmaceutical companies.
  • In July 2023, at a hearing of the Senate Armed Services Committee, Senator Warren secured ethics commitments from General Charles Q. Brown, Jr., President Biden’s nominee to be the next Chairman of the Joint Chiefs of Staff. When asked if he would agree not to become a defense industry lobbyist or receive compensation from a defense contractor for four years General Brown said he did not “intend to pursue opportunities in the defense sector or a lobbyist upon retirement from military service.”
  • In June 2023, Senator Warren announced that she secured another historic ethics commitment from Federal Reserve Board nominee Dr. Adrianna Kugler, the same one that she previously secured from Vice Chair for Supervision Michael Barr, Dr. Lisa Jefferson, and Dr. Phillip Cook. These nominees’ ethics commitments – to a four year recusal period from matters which they oversee on the Board of Governors, not to seek a waiver from these recusals, and not to seek employment or compensation from financial services companies for four year after leaving government service – are the strongest ethics standards in the history of the Fed.
  • In May 2022, Senator Warren secured a commitment from then-Federal Reserve Vice Chair for Supervision nominee Michael Barr not to seek employment or compensation – including as a result of board service – from any company that has a matter before the Fed, or any financial services company, for four years after he leaves government service.
  • In February 2022, Senator Warren secured the strongest ethics standards ever agreed to by Federal Reserve Board nominees from Lisa Cook, Phillip Jefferson, and Sarah Bloom Raskin. The nominees agreed to a four year recusal period from matters which they oversee on the Board of Governors, not to seek a waiver from these recusals, and not to seek employment or compensation from financial services companies for four years after leaving government service.
  • In January 2022, Senator Warren secured a commitment from then-FDA Commissioner nominee Dr. Robert Califf to recuse himself from matters involving his former employers and clients for four years, two years longer than what is required in the Biden administration’s Ethics Pledge. He also agreed not to seek employment with or compensation from, including as a result of board service, any pharmaceutical or medical device company that he interacts with during his tenure as FDA Commissioner for four years after completing his government service. 
  • In January 2021, Senator Warren secured ethics commitments from General Lloyd Austin, then-nominee for Secretary of Defense, to extend his recusal from Raytheon Technologies for four years and to not seek a position on the board of a defense contractor or become a lobbyist after his government service.
  • In July 2021, Senator Warren secured commitments from then-Air Force secretary nominee Frank Kendall and then-Under Secretary of Defense for Research and Engineering nominee Heidi Shyu, to recuse themselves from matters on former clients for four years.
  • In July 2021, a bipartisan group of Senate Armed Service Committee members adopted Senator Warren’s amendment to raise the recusal standard for Department of Defense employees. Under her amendment, Pentagon officials are prohibited from participating in matters that affect the financial interests of their former employer, former clients, or former direct competitors for four years. The amendment was included in the National Defense Authorization Act for fiscal year 2022.
    • In January 2022, the Department of Defense issued an advisory interpreting Senator Warren's recusal standard.
  • In May 2019, Senator Warren introduced The Department of Defense Ethics and Anti-Corruption Act, legislation to limit the influence of contractors on the military, constrain foreign influence on retired senior military officers, and assert greater transparency over contractors and their interaction with the Department of Defense.