MedPAC’s Spending Comparison Undercounts the Value of Medicare Advantage

MedPAC reports that the federal government spends more per beneficiary in Medicare Advantage than in Fee-for-Service Medicare. That conclusion is widely cited, and it directly informs federal payment policy.

But conclusions about spending are shaped by the decisions behind them — what counts as a program cost, which populations are compared, and over what time horizon spending is measured. This white paper identifies four such decisions that make Medicare Advantage appear more costly to the federal government than it is.

Medicare Advantage now covers more than half of all Medicare beneficiaries, with more than 35 million people enrolled in 2026. The policy conclusions drawn from spending comparisons will directly shape the coverage available to them.