LUGPA Policy Update - Joint Economic Committee Report on Medicare Advantage Overpayments

April 2026

At-a-Glance Essentials

What’s Changing
A new report from the Joint Economic Committee (JEC) finds that Medicare Advantage (MA) overpayments are increasing Medicare Part B premiums for all beneficiaries, including those in traditional Medicare.

Why It Matters
Because beneficiary premiums fund roughly 25–28% of Part B spending, higher costs driven by MA overpayments directly translate into higher premiums for seniors.

Action Points
LUGPA will continue monitoring MA payment policy and advocating for reforms that support program sustainability and protect access to independent specialty care.

Overview

The JEC report highlights how current Medicare Advantage payment policies are contributing to higher overall Medicare spending—and in turn, higher Part B premiums for all beneficiaries. Drawing on analysis from MedPAC and other sources, the report finds that MA plans are paid significantly more than the cost of covering similar patients in traditional Medicare.

Key Findings

• Higher MA Payments: MA plans receive about 120% of traditional Medicare costs for comparable patients
• Significant Overpayments: Estimated at $76–$84 billion annually, including ~$84 billion in 2025
• Premium Impact: Overpayments increased 2025 Part B premiums by ~$212 per enrollee ($13.4 billion total)
• Long-Term Costs: Since 2016, MA overpayments have added ~$82 billion to beneficiary premiums
• Broad Burden: Traditional Medicare beneficiaries shoulder a significant share of these added costs

The report also projects Part B premiums could rise from approximately $2,440 in 2025 to nearly $5,000 by 2035, with MA overpayments contributing to that growth.

Drivers of Overpayments

The report identifies several structural factors behind higher MA spending:

• Risk adjustment and coding practices that can inflate patient risk scores
• Quality bonus payments that increase plan reimbursement
• Benchmark formulas that may exceed traditional Medicare costs

While MA was intended to reduce spending, these factors have led to persistent overpayments.

Implications for LUGPA Members

Independent urology practices serve a large Medicare population, treating conditions such as prostate cancer, kidney stones, BPH, and urinary incontinence.

Rising Part B premiums may:

• Reduce seniors’ ability to afford care
• Lead to delayed screenings or procedures
• Increase downstream health and cost burdens

At the same time, practices are navigating ongoing reimbursement pressures and administrative complexity, making patient affordability an increasingly important access issue.

LUGPA Perspective

LUGPA supports efforts to strengthen Medicare’s long-term sustainability while preserving patient choice and access to physician-led care.

Key priorities include:

• Addressing MA payment policies that incentivize overpayments
• Maintaining balance between traditional Medicare and MA
• Ensuring premiums and out-of-pocket costs remain affordable

Bottom Line

The JEC report underscores growing concerns that Medicare Advantage overpayments are driving higher costs across the Medicare program. As policymakers consider reforms, LUGPA will continue advocating for balanced solutions that protect patients and support independent specialty practices.