The Trouble With MedPAC

A federal advisory board tries to undermine Medicare Advantage.

WSJ editorial. Excerpts:

"MedPAC last month estimated the government will spend $76 billion more this year for seniors on Medicare Advantage than if the same seniors were covered by traditional Medicare fee-for-service. It estimated excess payments to Medicare Advantage plans at $84 billion in 2025 and $88 billion in 2024. That’s a lot of money, but its estimates are based on faulty assumptions."

"MedPAC claims that seniors in Medicare Advantage are healthier than those in fee-for-service because they incur less spending. Ergo, insurers must be coding them as being sicker than they are. Maybe, but that’s hard to square with the fact that Medicare Advantage enrollees are also more likely to be low-income and have poor self-reported health status.

A more likely explanation is that plans do a better job of ensuring conditions are diagnosed and treated, thereby reducing unnecessary spending and hospitalizations. In a new study published in Health Affairs Scholar, Centers for Medicare and Medicaid Services officials found excess risk-adjusted payments on the magnitude of 1.5% to 2%, about $5 billion to $6.6 billion a year—far less than MedPAC’s estimates."