Experts: Over $1.4 trillion in wasteful, non-medical spending
by Medicare Advantage plans
WASHINGTON, DC – Insurance Watchdog Coalition today submitted a statement for the record to the House Energy and Commerce and Ways and Means committees ahead of their January 22 hearings on health costs, calling on Congress to advance reforms that spotlight wasteful spending in Medicare Advantage that benefits insurers, not patients.
“Insurers are charging more and delivering less than ever before. The costs to patients and taxpayers are huge. Congress could save $1.4 trillion in Medicare—without cutting medical care,” said the Coalition.
The Coalition also highlighted the widening gap between underlying medical costs and what insurers are charging. “Medical costs, including prescription drug prices, are rising by 4 percent. Obamacare premiums are rising 26 perent. You do the math,” the Coalition added.
The Coalition’s filing draws on multiple independent analyses—including findings from the Medicare Payment Advisory Commission (MedPAC), the Congressional Budget Office (CBO) and CMS program integrity reporting—that spotlight wasteful spending in Medicare Advantage as a major component of rising health costs.
Policy actions to improve Medicare Advantage include:
Curb Insurer Upcoding — $124 billion (CBO, 10 years): Strengthen oversight to prevent inflated diagnosis coding that increases taxpayer payments to plans.
Reform Supplemental Rebates — $86 billion (MedPAC, 2025): Medicare will pay MA plans $86 billion in rebates this year, yet plans spend less than 10% on extra benefits like dental, vision, and gym memberships.
Recover Improper Payments — $190 billion (10 years): CMS estimates $19 billion in MA improper payments in FY2024. Congress should strengthen audits, documentation standards, and penalties.
Replace Star Ratings Quality Bonuses — $127 billion (10 years): End inflated payments not tied to meaningful care outcomes; require plans to publicly report rates of denials and prior authorizations.
Target Vertical Integration Self-Dealing — $99 billion (10 years): Prohibit MA plans from paying higher rates to providers they own than to independent physicians and facilities.