If Republicans are serious about eliminating government waste and protecting Medicare and Medicaid, they will end Medicare Advantage overpayments; in addition to strengthening Medicare, ending these overpayments would lower premiums for older adults and people with disabilities by $220 billion. Ending these overpayments would also add $550 billion to the Medicare Trust Fund.
Ending government overpayments to Medicare Advantage insurers would put spending in Medicare Advantage on a level playing field with traditional Medicare. Ending overpayments would mean reducing already high MA insurer profits, not Medicare benefits. Reducing overpayments would strengthen the Medicare program.
Here’s the data revealing the excessive costs of Medicare Advantage relative to traditional Medicare as well as the toll it is taking on the out-of-pocket health care costs of older Americans and people with disabilities and the Medicare Trust Fund.
Medicare overpays Medicare Advantage insurers
- “The MA program has been expected to reduce Medicare spending since its inception—under the original incorporation of private plans in Medicare in 1985, payments to private plans were set at 95 percent of FFS payments—but private plans in the aggregate have never produced savings for Medicare, due to policies governing payment rates to MA plans that the Commission has found to be deeply flawed.”
- According to the Medicare Payment Advisory Commission (MedPac), the program’s watchdog agency, Medicare Advantage plans cost taxpayers 20% more than traditional Medicare, amounting to a projected $84 billion in 2025.
- The Committee for a Responsible Federal Budget reports that overpayments to MA plans will total $1.2 trillion dollars over the next decade.
- A report by the Wall Street Journal of roughly 2 billion diagnoses covering 84% of the nation’s MA enrollees from 2018-2021 found that MA insurers collected $50 billion in payments for diseases that doctors never diagnosed or treated.
Medicare Advantage overpayments strips billions from the Medicare Trust Fund
- The Committee for a Responsible Budget reports that eliminating the overpayments would save the Medicare Trust Fund $550 billion.
Older adults and people with disabilities pay higher premiums because of Medicare Advantage
- The Committee for a Responsible Federal Budget reports that eliminating Medicare Advantage overpayments would lower premiums to people with Medicare by $220 billion over the next ten years.
Here’s more from Just Care:
- Senator Grassley takes on UnitedHealth Medicare Advantage overpayments
- 33 experts call on CMS to continue reining in Medicare Advantage overpayments
- What happens when Medicare Advantage overpayments end?
- What are your Medicare premiums and costs in 2025?
- 2025: Programs that lower your costs if you have Medicare
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