Medicare Advantage has continued to grow so much now, that over half of the Medicare population has selected a Medicare Advantage plan over a traditional Medicare plan. Medicare Advantage is privatized Medicare, the program is owned and operated by private insurers with United, Humana, and Aetna maintaining most enrollees. Why are people moving to Medicare Advantage? There are two simple reasons why there has been so much adoption of MA over the last few decades: 1- The monthly cost of the program is substantially lower. The monthly premium for traditional Medicare is higher and that alone is the single biggest reason people, especially those on a fixed income, select Medicare Advantage plans. 2- Insurance agents and brokers are paid large commissions to sell MA plans as they have been the most profitable book of business for insurers. The broker can also provide other incentives along with the lower premium like gym memberships, vision coverage, and dental coverage in their plan.

This sounds great, lower premiums and better benefits, why would someone not choose a Medicare Advantage plan? As with any government program, the devil is in the details. The OIG has been reporting for years now, the Medicare Advantage insurers are denying services that meet medical necessity at alarming rates.

The denial of care, especially at the most vulnerable (and expensive) time in a senior’s life has become standard practice for many of these large insurers. In 2024 a senate report on Medicare Advantage ended with the following statement: “Although the Subcommittee’s recommendations in this report are targeted at regulators, this should not distract from the fact that it is insurers who are using prior authorization to protect billions in profits while forcing vulnerable patients into impossible choices. This is particularly troubling when recent analyses indicate that Medicare Advantage is more expensive than Traditional Medicare, with one assessment concluding that, in 2024, the government spent 22 percent more to fund Medicare Advantage plans than it would have had beneficiaries been enrolled in Traditional Medicare. There is a role for the free market to improve the delivery of healthcare to America’s seniors, but there is nothing inevitable about the harms done by the current arrangement. Insurers can and must do better, for the sake of the American healthcare system and the patients that government entrusts to them.”

The fiscal conservative wants to move government programs to the private sector, which was the rationale for Medicare Advantage. The belief that private insurers could provide the coverage more efficiently and effectively. The criticism from the program comes from both sides of the aisle. More recently, many republicans including our president have been changing their tone to an adversarial one with the private insurance industry. Senator Charles Grassley was one of the senators who helped sign Medicare Advantage into law. He recently penned a letter addressed to United Healthcare about this program. In this letter he stated: “I have repeatedly advocated for the program….Despite these oversight efforts, Medicare Advantage Organizations (MAOs) continue to defraud the American taxpayer, costing them billions of dollars a year.”

The Administrative Burden that has been placed on our healthcare providers from the Medicare Advantage industry has been devastating to the organizations providing healthcare. Many health systems have decided to no longer accept Medicare Advantage plans. The Mayo Clinic, and Scripps Health System in California were the two systems that made the biggest headlines as they came out first as the two major health care systems that will not accept these plans. In 2023, Becker’s Hospital Review published an article titled “Hospitals are dropping Medicare Advantage plans left and right.” They update the number of health systems no longer accepting MA plans monthly to show this trend is continuing.

In summary, the Medicare Advantage plans have done the following to the public: 1- Denied medically necessary care. 2- Up-coding medical charts to receive higher payments from the federal government. 3- According to the Congressional Budget Office, cost the taxpayers 22% more than traditional Medicare. 4- Increased the administrative burden and expense that healthcare systems must comply with, thereby increasing costs. The issues with Medicare Advantage are so widespread and substantial, it will be difficult to right the course with a few legislative adjustments. Elimination of the Medicare Advantage plan, placing all Medicare beneficiaries back on traditional Medicare, and starting over is the appropriate action in this situation. The intentions of utilizing private insurance to help save Medicare have not only clearly failed, but they have also cost the taxpayers billions more annually. ($83 billion to be exact)