The switch of seniors to Medicare Advantage plans has resulted in significant overpayments by taxpayers, totaling more than $106 billion from 2010 to 2019, according to research by Richard Kronick. Click here for article.
Medicare Advantage plans have been overpaid due to the way they charge for sicker patients, resulting in nearly $34 billion of excess spending during 2018 and 2019 alone.
Despite arguments from the industry about providing extra benefits, critics maintain that Medicare Advantage plans cost taxpayers too much and have been subject to investigations and lawsuits alleging billing abuse.
Concerns over Medicare Advantage costs have intensified as some Democrats seek ways to finance social spending agendas, while the plans aggressively advertise during the fall open-enrollment period.
The payment method for Medicare Advantage plans relies on a complex coding formula that often results in higher payments for sicker patients, with little oversight to ensure justification for these higher fees.
Despite attempts to address the issue, including a directive to reduce Medicare Advantage risk scores, the coding adjustment has remained at a minimum level since 2018.
Legal challenges and whistleblower complaints have highlighted strategies used by health plans to inflate risk scores, leading to higher payments without corresponding evidence of sicker enrollees.
If the current coding adjustment remains in place, spending on Medicare Advantage is projected to increase significantly, with a substantial portion potentially going toward insurance company profits rather than patient benefits.