More seniors are choosing MA plans, where private insurers contract with the government to manage their care. Watchdogs have long rung alarm bells over high levels of overpayment in the program, which could threaten its long-term viability — and that overpayment is even higher than previously thought, according to the new report.
USC Schaeffer found MA plans were overpaid by 14.4% in 2020 due to the favorable selection of lower-spending beneficiaries alone. Previously, congressional advisory group MedPac had estimated plans were overpaid by 6% for more aggressive coding and quality bonuses, but didn’t take that favorable selection into account.
