Donald Trump and Kamala Harris understandably avoid talking about Medicare costs, knowing that 67 million beneficiaries are famously wary of any meddling in the program — and highly likely to vote. But both parties also know that eliminating overpayments in privately run Medicare Advantage plans could help fund tax cuts or other spending or reduce the deficit. No matter who wins the presidency, changes are likely coming. There is just too much money at stake.
Reforming Medicare Advantage, which is being overpaid by more than $80 billion — or 22% —this year, can lower federal costs while preserving its additional benefits and its cap on out-of-pocket expenses. Private insurance plans were supposed to save Medicare money by emphasizing primary care, prevention, and reducing low-value services. Instead, the federal government pays Advantage plans an average of $2,329 more per beneficiary than what spending would have been in Traditional Medicare.