A recent report commissioned by America’s Health Insurance Plans (AHIP) challenges the findings of the Medicare Payment Advisory Commission (MedPAC) in its March 2024 report to Congress. In its’ March 2024 report MedPAC concluded that Medicare Advantage (MA) plans were paid 22% more in 2021 than what Medicare would have spent had those beneficiaries were enrolled in Fee-for-Service (FFS) Medicare, however, AHIP argues that this conclusion is based on flawed methodology and excludes key data.
Specifically, in the March 2024 report, MedPAC identified “favorable selection” – when healthier individuals choosing MA over traditional Medicare – as a factor contributing to MA’s higher cost, along with coding intensity. However, AHIP’s analysis, found that MedPAC’s conclusions were extrapolated from fee-for-service (FFS) Medicare data without examining them against actual MA experiences. The report also argues that MedPAC overlooks consumer behavior, such as beneficiaries delaying costly procedures until they switch to MA for lower out-of-pocket costs.
As policymakers seek to reduce the deficit, Congress may consider addressing Medicare Advantage overpayments. Read AHIP’s report here. Read MedPAC’s March 2024 analysis here.
Last Updated on March 18, 2025 by Aimed Alliance
