Medicare Advantage has long been this nation’s most successful public-private partnership and now boasts 34 million enrollees – a majority of the seniors who are eligible for Medicare. The program has been forced to face unfair and misleading attacks which, unfortunately, are all too common in Washington these days. The latest example of this is the recently released Medicare Payment Advisory Commission (MedPAC) report to Congress, which included its annual status report on the Medicare Advantage program. It makes claims based on faulty assumptions, and now is the time to set the record straight. 

MedPAC’s MA status report included an analysis comparing payments to MA plans with those to traditional, fee-for-service Medicare spending. Of course, this is an important figure, as the promise of Medicare Advantage has always been its cost savings through private-sector efficiency. MedPAC’s analysis claims that MA is overpaid by around 20% compared to traditional Medicare. It points to coding differences and “favorable selection” as the main drivers of this discrepancy.

That figure would normally be deeply concerning, but a close examination of the report shows it to be both faulty in its methodology and in its data. Consider first the inclusion of “favorable selection” in the analysis. Favorable selection is a metric added just last year to MedPAC’s methodology. It’s based on an unproven assumption that healthier-than-average beneficiaries disproportionately enroll in MA, and that this results in federal “overpayments” to MA plans. 

A just-released report from FTI Consulting found serious problems with MedPAC’s report. The whitepaper points out, for example, that MedPAC’s analysis estimated favorable selection using only data from fee-for-service Medicare. This means they ignored the growing contingent of seniors (more than 40%) who bypass traditional Medicare and go directly into MA when they become eligible. A serious analysis would not simply extrapolate based on those who switch from FFS to MA and expect to get accurate results. 

The assumption made by MedPAC that fee-for-service Medicare enrollees are sicker on average than those in MA is also flawed. If anything, evidence shows that MA enrolls sicker, higher-need beneficiaries, including more enrollees who are dual-eligible. Another problem with MedPAC’s report: it assumes that enrollee’s spending patterns remain the same after switching from FFS to MA. However, since MA plans tend to have lower out-of-pocket costs, it’s entirely likely many of these seniors have delayed their expensive care until switching to MA. All this, along with the fact that providers are less likely to accurately code with traditional Medicare, makes MedPAC’s report far from a true “apples-to-apples” comparison. 

Americans should care about costs and think about how we can get the most bang for taxpayers’ “bucks.” And we have to make sure such accountings hold up to basic scrutiny, which this MedPAC report does not. There is plenty of research that directly contradicts the idea that MA is more expensive. One report from October found the growth in MA enrollment had saved the federal government $144 billion over a decade. As for waste, fraud and abuse, in April the Government Accountability Office found improper payments to providers in FFS programs were nearly double the improper payments in MA. 

With all this in mind, Congress should hold off on making policy decisions based on MedPAC’s faulty report. After all, the 34 million American seniors who rely on Medicare Advantage deserve that any such analysis of the program is done right. 

Aiden Buzzetti is the president of the Bull Moose Project.