The Medicare Payment Advisory Commission estimated Medicare Advantage payments will be 14% greater than fee-for-service Medicare in 2026, according to a March 12 report from the congressional agency.
That 14% equates to an extra $76 billion for MA, with the increase attributable to favorable selection and coding intensity.
MedPAC has faced scrutiny in recent months over its methodology and results, though, and CMS leaders released counterfactual estimates on coding patterns earlier this year.
“MedPAC estimates do not accurately reflect Medicare Advantage spending, nor do they even attempt to capture the superior value of the program to beneficiaries and taxpayers. That is a problem,” a statement from insurer-backed Better Medicare Alliance said before the March report went live.
“MedPAC plays an important role in educating Congress about Medicare” the statement continued. “But that role is only valuable when the underlying methodology holds up to scrutiny, and policymakers should be clear-eyed about what today’s report represents: one data point among many, not the definitive last word.”
Here are five things to know from the MedPAC report:
- Fifty-five percent of eligible Medicare beneficiaries are enrolled in MA, more than doubling since 2010. There were about 34.9 million MA enrollees in 2025.
- For supplemental benefits in 2026, Medicare is paying MA plans $2,660 per beneficiary per year on average in rebates, which have more than doubled since 2018. The rebates make up about 15% of the program’s payments to MA plans.
- MA spending correlates to higher Part B premiums across the Medicare population, resulting in $175 more per beneficiary per year. Separately, the Congressional Joint Economic Committee said MA overpayments prompted Part B premiums to rise by $212 per enrollee in 2025.
- In 2024, overall Medicare spending totaled $1.1 trillion, accounting for 21% of national health spending. Contributing factors include greater service intensity and increased drug spending in Part B.
- MedPAC recommended payment cuts across skilled nursing facilities, home health and inpatient rehab. MA plans are paid per member, per month, incentivizing briefer skilled nursing facility stays, utilization of less costly post-acute care and longer hospital stays to keep out of post-acute care altogether.
