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Taxpayers spend 22% more per patient to support Medicare Advantage

Rather than finding efficiencies and saving money all around, the private companies that administer the Medicare Advantage option to Medicare are profiting at seniors’ – and taxpayers’ – expense.

The current Medicare Advantage payment system, implemented in 2006 and heavily reformed by the Affordable Care Act in 2010, had two policy goals. Instead, they receive a portion of the difference between their spending estimate and the benchmark as a rebate that they are supposed to pass on to their enrollees as extras, like reductions in cost-sharing, lower prescription drug premiums and supplemental benefits. For instance, right now, the average person eligible for Medicare would have to sift through the fine print of dozens of different plans to compare important factors, such as out-of-pocket maximums for medical care, coverage for dental cleanings, cost-sharing for inpatient stays, and provider networks.

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