Medicare Advantage Overpaid $123 Billion Since 2004

Medicare Advantage has cost the American taxpayer $282.6 billion beyond traditional Medicare since 1985, a new study has found.

Beginning in 2005, Medicare Advantage added $122.5 billion to Medicare expenditures, representing almost 4 percent of total spending for the program during that period.

The study, published in the latest issue of the International Journal of Health Services, claims to be the first to examine and define the total cost of overpayments to Medicare Advantage and its predecessor programs since 1985.

According to authors Ida Hellander, David U. Himmelstein, and Steffie Woolhandler, private insurers have been “gaming the system” from the beginning by attracting relatively healthy seniors and discouraging seniors with serious illnesses from enrolling. “Medicare adopted a risk-adjustment scheme in 2004, but this has not curbed private plans’ ability to game the payment system,” the authors write, which they have done so to the tune of $122.5 billion.