STAT+: Medicare Advantage’s supplemental benefits will cost taxpayers $86 billion this year, with little transparency
Taxpayers will send an estimated $86 billion to Medicare Advantage insurers this year to pay for supplemental benefits for their members. But how that money is spent remains a black…
Taxpayers will send an estimated $86 billion to Medicare Advantage insurers this year to pay for supplemental benefits for their members, or 17% of total payments to those plans. But how that money is spent, and how much members actually use those benefits, remains a black hole, according to a new report from a group of Medicare experts.
Medicare pays MA plans in the form of what’s known as rebates to help fund supplemental benefits, and that funding has shot up by more than 300% over the past eight years, according to the Medicare Payment Advisory Commission’s annual report to Congress. Back in 2018, Medicare paid the plans $21 billion. Not only that, a growing proportion of that money goes toward dental, vision, and hearing benefits that are sometimes administered by companies the insurers own, raising questions about how much of the taxpayer dollars are lining insurers’ own pockets.
“When an MA plan contracts with an owned subsidiary to deliver supplemental benefits, or when the benefits are required to be delivered through owned providers, there is also an opportunity for the parent organization to retain a larger fraction of each dollar flowing through the supply chain as profit,” the report said.
