MedPAC to take a closer look at Medicare Advantage plans

Medicare Advantage plans could face increased scrutiny as policymakers try to get Medicare spending under control.

The Medicare Payment Advisory Commission, a congressional advisory panel, wants to take a closer look at Medicare Advantage’s effect on federal spending, based on comments made by its members during the commission’s September meeting on Thursday.

“We will not miss an opportunity to price more effectively. That includes MA,” MedPAC Chairman Michael Chernew said.

Spending per beneficiary is growing faster for people on Medicare Advantage and other private plans than it is for people on traditional Medicare and Part D prescription drug plans, according to a MedPAC analysis. While traditional Medicare spending per beneficiary grew at a 4% rate from 2011 to 2019, private coverage like Medicare Advantage and Program of All-Inclusive Care for the Elderly plans grew 6.9% annually.

That has experts worried, as Medicare Advantage enrollment has surged in recent years. More than 26 million people on Medicare are enrolled in private coverage, making up 42% of all Medicare beneficiaries and 46% or $343 billion in federal Medicare spending, according to the Kaiser Family Foundation.

On top of that, the Centers for Medicare and Medicaid Services could overpay Medicare Advantage plans by $200 billion over the next decade because federal policy encourages them to make their beneficiaries seem as sick as possible, according to a Health Affairs article.

Policymakers are starting to run out of patience with the Medicare trust fund headed toward insolvency in 2026.

It’s time for Medicare Advantage plans to be held more accountable for the value they provide, said MedPAC commissioner Marjorie Ginsburg.

“We are getting low-value care by how much we are paying,” she said.


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