A number of Republicans criticized Medicare Advantage during a congressional hearing on Tuesday, suggesting that the privatized Medicare program could be due for an overhaul from Washington.
Calls to reform MA from Democrats are nothing new. But members of the GOP condemning MA is notable given the party’s traditional support for the program, in which the government contracts with private insurers to manage the care of Medicare enrollees.
MA was created with the hope it would save Medicare money while improving outcomes. But critics say the program has spiraled out of control amid growing evidence that MA costs the government significantly more than traditional Medicare, while restricting healthcare for America’s seniors.
“We all recognize that there’s a problem,” said Rep. Mike Kelly, R-Pa., during Tuesday’s joint hearing of the Health and Oversight subcommittees of House Ways and Means. “It’s people’s health and it’s critical.”
During the hearing, lawmakers criticized high rates of care denials and prior authorizations put in place by MA plans. They also aired concerns about inflated spending in MA, much of which stems from a practice called upcoding in which insurers exaggerate their members’ sicknesses to generate higher reimbursement from the government.
The federal government is set to spend $84 billion more on MA enrollees this year than it would if those same patients were enrolled in traditional Medicare, according to congressional advisory group MedPAC.
“Can we work with the insurers, work with CMS, work with MedPAC, work with my Democrat brothers and sisters, my Republican brothers and sisters, to get the incentives aligned?” asked Rep. David Schweikert, R-Ariz., the chairman of the Oversight Subcommittee. “This isn’t a game. This is one of the biggest things in our government.”
MA in lawmakers’ crosshairs
Major MA payers received the brunt of the flak at the hearing, with lawmakers in particular calling out UnitedHealthcare, the largest MA payer with 8.2 million beneficiaries. The UnitedHealth-owned insurer is at the center of concerns about upcoding amid a flurry of media reports detailing how the company may have pocketed billions of dollars from the practice.
Witnesses at the hearing included the CEOs of smaller MA payers Alignment Health Plan and SCAN. Lawmakers praised the companies for focusing on quality and value instead of squeezing out profits from the program like some of their larger peers.
“I applaud y’all for doing it right,” said Rep. Greg Murphy, R-N.C. “What I’d like to see is UnitedHealthcare, Humana and Aetna sitting in front of us because they have bastardized the system.”
Still, Republicans acknowledged that it may be difficult to tweak MA, given its popularity with seniors and the promise of improving quality and saving money at the program’s core.
“I believe we can protect the integrity of MA while ensuring it remains a strong option for beneficiaries,” said Rep. Vern Buchanan, R-Fla., the chair of the Health Subcommittee.
The Better Medicare Alliance, the main lobby for MA payers, told lawmakers to tread carefully in a statement in advance of the hearing.
“As Congress considers the future of the program, we urge policymakers to prioritize thoughtful reforms that strengthen Medicare Advantage while protecting the affordability, benefits, and coordinated care that beneficiaries rely on,” BMA CEO Mary Beth Donahue said.
“If policymakers opted to reform MA payment, a sensible goal would be to align MA payments to plans with the cost of covering similar enrollees under traditional Medicare,” said Matthew Fiedler, a senior fellow at the Brookings Institution’s Center on Health Policy, during the hearing.
The “most important step” would be to fix “MA’s broken risk adjustment program,” he added.
Congress should tackle risk adjustment, health plan witnesses agreed — though, they warned legislators against across-the-board changes that would tamp down on reimbursement for all managed care companies, not just the worst upcoding offenders.
Congress should also focus on streamlining and automating prior authorizations, and improving transparency around care approvals and denials, witnesses said.
The hearing suggests that curbing bad behavior in MA has evolved into a largely bipartisan issue — even though Republicans ignored calls from Democrats to tackle upcoding in the GOP’s so-called “Big Beautiful Bill” that President Donald Trump signed into law earlier this month.
Lawmakers on both sides of the aisle have introduced legislation to reform MA. Most recently, on Monday Rep. Lloyd Doggett, D-Texas, joined Murphy in introducing a bill that would require MA plans to pay providers at least as much as traditional Medicare does for care.
Still, many Hill watchers don’t expect meaningful healthcare legislation, given the GOP’s recently passed tax and policy law includes upwards of $1 trillion in healthcare cuts from significant changes to Medicaid and the Affordable Care Act.