Sachin H. Jain
After months of speculation and controversy, the Biden administration finalized implementation of the revised formula by which it will reimburse Medicare Advantage health plans for providing coverage to seniors. The new framework is a response to critics who say that because the federal government gives higher payments to insurers who cover sicker policyholders, the system provides insurers with an incentive to log more risk codes and inflate payments.
Of course, there are other reasons MA plans may cost more than Medicare fee for service plans. Most notably, there’s the fact that MA insurers provide richer benefits than traditional Medicare does. Put another way, Medicare Advantage costs more because it provides more to beneficiaries—including dental, vision, and hearing benefits—many of whom are low-income patients who need the richer coverage.
That said, I think members of both systems would be better served if we stopped making impossible “apples to oranges” comparisons between them. The challenge for …