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Medicare Advantage

Medicare's Congressional Advisor Estimates Medicare Advantage Cost the Government 14 Percent More Per Enrollee Than Traditional Medicare in 2026

A Medicare Rights Center analysis published August 27 draws on a MedPAC estimate and a Congressional Budget Office literature review to argue that evidence of a systematic Medicare Advantage payment gap is accumulating, even as the program's share of total Medicare enrollment grows.

By the Goodsurance editorial teamSeptember 1, 2026

The Medicare Rights Center published an analysis on August 27 drawing on recent estimates from the Medicare Payment Advisory Commission and other sources to argue that a systematic gap between what the government pays for Medicare Advantage enrollees and what it would pay for the same people in traditional Medicare has grown more costly and is better documented than before.

The most prominent figure in the analysis comes from MedPAC, the independent advisory body that reviews Medicare payment policy for Congress each year. MedPAC estimated that Medicare Advantage costs the federal government approximately 14 percent more per enrolled beneficiary than traditional Medicare does for a comparable person in 2026.

Medicare's own congressional advisory panel estimates Medicare Advantage cost the federal program 14 percent more per enrollee than traditional Medicare in 2026.

The analysis also references a Congressional Budget Office literature review that found all available published studies on the topic consistently show that risk-score adjustments CMS applies to Medicare Advantage payments do not fully correct for coding differences between the two programs, leaving a residual payment gap.

The Medicare Rights Center noted that Medicare Advantage enrollment stood at roughly 51 percent of all Medicare beneficiaries in 2026 and is projected to grow to 57 percent by 2036. As the program covers a larger share of total beneficiaries, any per-person payment gap becomes a proportionally larger driver of overall Medicare spending.

The analysis does not call for reducing enrollee benefits. It argues the gap warrants closer scrutiny of how the government sets Medicare Advantage payment rates.

In plain words

A consumer group published a report saying Medicare Advantage plans cost the government more money per person than regular Medicare does. Medicare's own advisory panel for Congress estimated the difference is 14 percent per person in 2026.

The reason this gap exists, according to the report, is that Medicare Advantage patients tend to be recorded as sicker than they actually are. The government tries to adjust for this, but a review by the Congressional Budget Office found that all studies on the topic agree: the adjustment does not close the gap all the way.

About half of all Medicare users are now in Medicare Advantage, and that share is expected to keep growing. The bigger the program gets, the more this cost difference matters for the total Medicare budget.

The report is not asking for cuts to patient benefits. It is asking the government to take a closer look at how it sets payment rates for private plans.

Understand the basics first

Source: Medicare Rights Center
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