New Report Exposes MedPAC Methodology Flaws
A new report released this week by the Healthcare Leadership Council (HLC) highlights serious flaws in the Medicare Payment Advisory Commission’s (MedPAC) revised methodology for evaluating Medicare Advantage. The changes nearly quadrupled MedPAC’s estimate of Medicare Advantage “overpayments” in 2024 — without any change in the actual program.
This is more than a technical dispute. Policymakers often rely on MedPAC data to make important decisions about Medicare Advantage — but when the numbers are distorted, it changes the conversation and can put millions of seniors’ health care at risk.
What the HLC Report Found
The report underscores how MedPAC’s approach exaggerates Medicare Advantage spending by:
- Ignoring fundamental program differences. Medicare Advantage delivers integrated, value-based care that includes prescription drug coverage, out-of-pocket protections, and supplemental benefits not available in traditional Fee-for-Service Medicare.
- Overstating coding intensity. MedPAC’s methodology conflates differences in health status with differences in coding practices, leading to inflated payment estimates.
- Excluding most beneficiaries. By relying only on a small subset of “switchers” from fee-for-service, the analysis disregards 62% of Medicare Advantage enrollees — including many of the most medically complex and vulnerable
The result is a misleading picture of Medicare Advantage that undervalues its contributions to seniors’ health and affordability.
A Challenging Landscape for Medicare Advantage
Flawed analyses like MedPAC’s have added to misperceptions about the Medicare Advantage at a time when the program is facing significant pressures.
- Rising medical costs and utilization are straining the system. Seniors are living longer and with more complex health needs, while medical costs continue to climb.
- Two consecutive years of cuts under the previous Administration reduced funding, with ripple effects still felt across the program.
- Ongoing policy changes to risk adjustment and star ratings are reshaping incentives while further tightening resources.
Despite these pressures, Medicare Advantage continues to provide lower out-of-pocket costs, critical supplemental benefits like vision and dental, and consistently high satisfaction among beneficiaries.
Why Program Stability Matters
Behind every estimate or policy debate are real seniors whose health and financial security depend on Medicare Advantage. Misleading estimates that overstate costs risk fueling misguided reforms that could undermine access, reduce benefits, and destabilize coverage for millions.
As HLC’s report makes clear, policymakers should ensure that analyses of Medicare Advantage are transparent, accurate, and grounded in the realities of the program — not flawed assumptions. Stability is essential to preserve the affordability, benefits, and choice that seniors overwhelmingly value.
Medicare Advantage works. It saves seniors money, delivers better care, and enjoys broad, bipartisan support. Policymakers should focus on strengthening and safeguarding this vital program — but that important work can only happen with strong, reliable data to inform the conversation.