From 2018 to 2024, the participation of the eligible beneficiaries of Medicare enrolled in Medicare Advantage (MA) increased from 37 percent to 54 percent. Now, the Medicare Payment Advisory Commission (Medpac) is dealing with the repercussions of the fact that in 2025 Medicare will spend 20 percent more for ma affiliates than it would spend if those beneficiaries were registered in traditional Medicare, a difference that translates into $ 84 billion projected.
Relatively higher payments to MA plans are financed by taxpayers and beneficiaries that finance the Medicare program. “Higher ma spending increases part B premiums for all beneficiaries, including thhue in ffs medicare; the commission estimates that part B premium payments will be advout $ 13 billion Higher in 2025 Best of Higher Medicare Payments to ma plans Medpac report March 2025 states.
The report makes it clear that the initial idea was that Medicare Advantage was going to provide cost savings to taxpayers through greater efficiency and attention management: “When the payment based on the risk for private plans was added for the first time to Medicare in 1985, payments to private plans were established in 95 percent of the FFs payments because the plans were expected to share savings of their efficiencies of their efficiencies to efficiencies of their efficiencies to their efficiencies to efficiencies to efficiencies FFS with imposing taxes on taxes on taxes on taxes.
In fact, the medpac review of private plant payments suggests that for 40 years of history, the many hiring iterations of all the risk with private plans have never thrown added savings for the Medicare program.
The Medpac report in March 2025 argues that several reforms are needed to improve Medicare’s policies to pay and supervise MA plans.
First, reforms are needed to reduce Medicare’s levels to MA plans. The relatively higher payment levels come largely from the coding intensity and the favorable selection, Medpac said.
Medpac defines the «favorable selection» in MA as it happens when the beneficiaries with a lower real expense in relation to their risk score tend to register in MA; It is the extent that the standardized expense by risk of ma affiliates would be less than the FFS average without any intervention of the ma plans. Medpac projects that in 2025, the favorable selection will increase ma payments by approximately 11 percent above what the program would have paid under the FFS Medicare, or $ 44 billion of the $ 84 billion in total payments higher than MA plans.
Medpac also projects that in 2025, MA risk scores will be approximately 16 percent higher than similar service tariff scores. Mechanisms that contribute to coding differences include a greater use of health risk assessments and graphics reviews.
In addition, Medpac calls the program that is used to reward the best quality «administratively» plans, and points out that it adds significantly to the costs of the program and, nevertheless, does not significantly improve quality.
The report also recommends that Medicare addresses the challenges, charges and attention interruptions for beneficiaries that are derived from the process of choosing between plans and changes to supplier networks.
Medpac also pointed out that the data sent by Plan on the health meetings of the beneficiaries are incomplete, so that the Commission lacks information on the use of many complementary benefits of MA. «Without these data, policy formulators cannot completely understand the use of affiliate services, which limits the capacity of policy formulators to supervise the program and evaluate the value that members obtain from the complementary benefits,» the report said.
