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Medicare Advantage's cost to taxpayers has soared in recent years, research finds

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.

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