Taxpayers spend 22% more per patient to support private alternative to Medicare that promised to cost less | Analysis

Taxpayers spend 22% more per patient to support private alternative to Medicare that promised to cost less.

Medicare Advantage , also known as Part C, was supposed to save the government money.

The competition among private insurance companies, and with traditional Medicare , to manage patient care was meant to give insurance companies an incentive to find efficiencies.

Medicare Advantage benchmark estimates received another layer: “quartile adjustments” These made the benchmark estimates, and therefore payments to Medicare Advantage companies, higher in areas with low traditional Medicare spending.

Medicare studies traditional Medicare diagnoses, such as diabetes, depression and arthritis, to understand which have higher treatment costs.

Medicare uses this information to adjust its payments for Medicare Advantage plans.

There is a long-running debate over what type of coverage should be required under both traditional Medicare and Medicare Advantage .

Means-testing in Medicare can be controversial.

There is also debate over how much Medicare Advantage plans should be allowed to vary.

The challenge is figuring out how to standardize without unduly reducing consumers’ options.