Medicare spends 11% more for beneficiaries in Medicare Advantage plans than for people in fee-for-service Medicare, according to new data released by the Medicare Payment Advisory Commission. In 2004, MedPAC data suggested that MA plans were paid 107% of the cost of care for Medicare fee-for-service. That same year, CMS announced that MA enrollees were healthier than traditional beneficiaries, and that their care cost on average 8% less. The total overpayment was calculated to be 115%. MedPAC, however, found that MA plans are now paid, on average, 111% of what it would cost to care for the same beneficiaries in fee-for-service Medicare. “It is past time for Congress to enact legislation eliminating government overpayments to HMOs,” said U.S. Rep. Pete Stark (D-CA), Ranking Democrat on the Ways and Means Subcommittee on Health, in response to the MedPAC data. “MA plans should be paid the same as traditional Medicare. Republicans in Congress wrote this payment policy for the insurance industry. It should therefore come as no surprise that insurers continue to make huge profits at taxpayers’ expense.”
