January 18, 2023
Keep Moving. Nothing to See Here. Just Another Double-Digit Increase in Medicare Advantage Spending
I’m starting to run out of clever headlines to tell the same story. Spending on Medicare Advantage plans rose by double digits again in 2021, according to the latest National Health Expenditure data released by CMS in December, and no one seems that interested or willing to do anything about it.
Federal outlays for MA plans rose 14.1 percent in 2021 to about $416.9 billion. That follows:
- A 15.6 percent increase in 2020 (revised downward by CMS from 17.1 percent)
- A 15.2 percent increase in 2019 (revised downward by CMS from 15.3 percent)
- A 12.6 percent increase in 2018
- A 10.1 percent increase in 2017
By comparison, total Medicare spending in 2021 rose 8.4 percent to about $900.8 billion, according to CMS. Total national health spending rose just 2.7 percent to $4.3 trillion.
So, using my rudimentary math skills, MA spending rose nearly twice as fast as all Medicare spending in 2021 and more than five times faster than total healthcare spending. In 2021, MA spending ate up 46.3 percent of all Medicare spending, up from 43.9 percent in 2020.
At what point does runaway MA spending trip the unsustainable alarm, and lawmakers, policymakers and regulators do something drastic to stop it?
I realize that there are lots of audits, lawsuits, reports and recommendations going around. But as CMS’ numbers clearly show, none have had much of an effect. Nothing seems to stop private health plans and providers who are getting into the MA game from exploiting a government program for profit.
Ultimately, the whole thing will come crashing down, and the ones who will get hurt will be seniors who enrolled in an MA plan. Payers and providers will just move on to another government honey hole.
That’s not a headline I want to write. But I will if I have to.
To learn more about this topic, please check out:
- “Unfazed by Unbridled Medicare Advantage Spending”
- “Medicare Advantage Keeps Biting the Hand that Feeds It”
- “Medicare Advantage Bends Cost Curve the Wrong Way”
- “Growing Pains or Warning Signs for Medicare Advantage?”
Thanks for reading.