Medicare Advantage plans this year will receive $11.4 billion in extra payments above the cost of traditional fee-for-service Medicare, a 34% increase over 2008, according to a report released by the Commonwealth Fund.
Since Medicare Advantage plans became available in 2004, the federal government has made $43 billion in supplemental payments to private health insurers administering these plans, according to the study by Brian Biles, professor of health policy at George Washington University, and colleagues. Extra payments this year averaged $1,138 per member, or 13% above Medicare fee-for-service costs, for the total 10 million Medicare Advantage members.
The 34% year-over-year increase was because of higher payment rates and increasing enrollment in Medicare Advantage plans, according to the study, which used Medicare and Commonwealth Fund data. “We have to ask ourselves whether this is the best use of our healthcare dollars,” Biles said in a written statement.
