02.11.2026 / Press Release

NEW REPORT: Wasteful Spending and Unchecked Growth of Medicare Advantage Threatening the Future of Medicare

WASHINGTON, D.C. — Medicare Advantage costs more than traditional Medicare yet often delivers lower quality care, according to a new report released today by Families USA. Now covering more than 33 million older Americans, the Medicare Advantage program has become a massive driver of wasteful spending and corporate profiteering that undermines Medicare’s promise to seniors and drives up costs for the federal government, taxpayers and health care consumers.  

The report details how the program’s flawed payment system has allowed insurers to inflate their payments from the federal government without following through on the promise of providing better care to seniors. 

“For too long, big health care corporations have been rigging the system so they can bring home the highest possible profits rather than delivering the highest quality care, and our nation’s seniors are paying the price,” said Sophia Tripoli, senior director for health policy at Families USA. “Reducing excessive payments to Medicare Advantage insurance companies would save money that could be used to lower out-of-pocket costs or expand coverage in traditional Medicare for dental, hearing and vision care. It is long overdue for policymakers to take action to stop Medicare Advantage overpayments so that we can improve coverage for people in traditional Medicare.” 

Since 2007, inflated spending in Medicare Advantage has cost the federal government nearly $600 billion. As program enrollment increases, so does the level of overspending. In 2025 alone, Medicare is projected to pay 20% more to cover enrollees in Medicare Advantage than it would spend if those same beneficiaries were enrolled in traditional Medicare — a difference that amounts to $84 billion in extra spending in just one year. This wasteful spending is a direct threat to the sustainability of the Medicare program overall. 

In the report, Families USA identifies six solutions to rein in Medicare Advantage overpayments, stop industry abuses and restore integrity and fairness to the program.  

1. Cracking down on upcoding and corporate gaming through strong risk adjustment reform and full implementation of the bipartisan No UPCODE Act. 
2. Modernizing Medicare Advantage benchmarks and bidding to ensure taxpayer dollars reward efficiency and real quality improvement. 
3. Reforming the quality bonus program to be budget neutral and impose penalties for poor performance. 
4. Tightening oversight of vertically integrated insurers to stop them from hiding profits and violating medical loss ratio protections. 
5. Expanding transparency so the public and policymakers know whether Medicare Advantage plans deliver real value and access to care. 
6. Investing in traditional Medicare by adding dental, vision and hearing benefits and a cap on out-of-pocket costs — promoting healthy competition between Medicare Advantage and traditional Medicare to ensure beneficiaries have meaningful, high-quality choices. 

The full report is available here.  

Families USA experts are available to speak with media on this issue upon request.