Medicare Advantage or disadvantage? Lawmakers hear about the good, the bad, and the prior authorizations

Witnesses testify during The House of Representatives Ways & Means Committee's “Joint Health and Oversight Subcommittee Hearing on Medicare Advantage: Past Lessons, Present Insights, Future Opportunities,” held July 24, 2025. The image was taken from the committee's webcast of the hearing.

Medicare Advantage is a popular program with patients, but prior authorizations and delayed payments remain problematic, congressional leaders and expert witnesses said this week.

The House of Representatives’ Ways & Means Committee convened the “Joint Health and Oversight Subcommittee Hearing on Medicare Advantage: Past Lessons, Present Insights, Future Opportunities.” Lawmakers and witnesses spent at least 2 ½ hours reviewing the good and bad about the program.

Medicare Advantage (MA) has surpassed traditional Medicare, also referred to as fee-for-service (FFS), with 54% of beneficiaries choosing it nationally. That figure rises to 60% in Florida, home state of Health Subcommittee Chair Rep. Vern Buchanan (R-Florida), he said.

Beneficiaries have plans with options including lower out-of-pocket costs and coverage for vision, dental and hearing services, along with prescription drugs and preventive services, Buchanan said. There is access to fitness memberships, wearable health technologies and healthy meals, and 95% of MA beneficiaries are satisfied with the care they receive, he said.

“It's important to examine the program to ensure ma continues to deliver for patients,” Buchanan said. “For example, we have heard many stories access prior authorization and payment delays that negatively impact patients. Outdated financial incentives may also contribute to some of the unjustifiable payments in the MA program.

“Fortunately, we have the ability to modernize the benefits to ensure patients receive the best care, reduce burden on providers, and better manage overall health care costs,” he said. “Transparency is crucial for maintaining the trust in the system and ensuring efficient use of taxpayer dollars. I believe we can protect the integrity of MA while ensuring it remains a strong option for beneficiaries.”

'What are consumers getting?'

Rep. Lloyd Doggett (D-Texas) said he was pleased legislators would address some genuine waste, fraud and abuse, instead of cutting coverage. It was an apparent reference to the Medicaid cuts in the One Big Beautiful Bill Act, the financial plan supported by House Republicans and President Donald J. Trump. In the hearing, other Democrats openly criticized that bill and its effects on health care.

“Medicare Advantage was sold as a program to save taxpayer dollars and improve the quality of care, but I found that is largely disadvantage, never saving taxpayers a penny and vastly outspending traditional Medicare,” Doggett said. “While some of us have differing views concerning MA and its position in the future of health care for seniors and individuals with disabilities, I know we are all concerned with wasteful overpayments and assuring the long-term promise of Medicare for future generations.”

Doggett cited the Medicare Payment Advisory Commission, which estimated taxpayers will pay 20% more for coverage for beneficiaries, than if beneficiaries were in traditional Medicare. “That amounts to $84 billion this year alone,” he said. Meanwhile, enrollees will pay an average of $198 in premiums this year due to overpayments to MA insurers.

“What are consumers getting for all of this money? Well, outrageously, many are just facing care delays and denials, Fewer and fewer provider options, and poor consumer service for providers. MA is becoming more trouble than it's worth,” Doggett said. He used the example of a Texas surgeon who had a conflict with an insurer, then used a GoFundMe online fundraiser to keep her practice afloat.

What are the priorities?

During the hearing, other representatives echoed similar sentiments and pointed out various elements that were fiscally responsible and beneficial to patients, or not.

Oversight Subcommittee Chair Rep. David Schweikert (R-Arizona) said he is a fan of managed care that uses incentives for organizations to help people get healthier. In MA, incentives are misaligned and the program is more expensive than traditional Medicare.

“If our culture really is the moment where we understand the power to society of having a healthier society, can we work with the insurers, work with CMS, work with MedPAC, work with my Democrat brothers and sisters, my Republican brothers and sisters, get the incentives aligned?” Schweikart said, referring to the Medicare Payment Advisory Commission. “This isn't a game. This is one of the biggest things in our government. Let's get this right.”

Oversight Committee Ranking Member Terri Sewell (D-Alabama) echoed criticisms of the Trump administration and Congress for cutting Medicaid benefits. She also listed a catalog of problems within MA.

“I agree that we must examine troubling practices in Medicare Advantage program, which have created financial nightmares for health systems and providers across this country,” she said. “Many health systems and providers have continued to voice concerns regarding abuse of prior authorization, denial rates that are sky high, payment delays, overpayment in programs, increasing administrative burdens and a lack of transparency, to name a few.”

Another significant concern is the lack of oversight within Medicare Advantage. In 2024 Medicare spent $83 billion on rebates for some form of supplemental benefits, representing more money than Medicare spent on the entire the entire Physician Fee Schedule. Yet the committee did not have any systemic records or data on supplemental benefits, cost or utilization, Sewell said.

Witnesses share their views

MA Insurer Alignment Health started when its founder watched the experience of his mother fall through the cracks of a fragment health care system, said CEO Dawn Maroney. That experience was not unique, and it was unacceptable, she said.

Alignment Health doctors and staff believe in the power of seeing the whole person, Maroney said. One example was a high-risk senior flagged for abnormally low blood sugar detected by Alignment Health’s data system. The technology helped, then a home visit gave another insight: the patient’s refrigerator was empty. The patient had not engaged with Alignment Health because he did not trust a health plan to do the right thing, Maroney said. But a $30 pizza dinner and healthy meal delivery avoided an unnecessary $20,000 emergency department visit and hospitalization, she said.

“This is what Alignment does and how we operate. We put the senior first, we support the doctor. We enable it all with smart technology and a culture of being on being an organization that has a serving heart,” Maroney said. A virtual cycle with artificial intelligence identifies the sickest beneficiaries that drive 80% of health care costs.

“We identify these individuals and we surround them with a home-based, preventive, personalized care plan that provides more care to the beneficiaries who need it most often, preventing costly interventions before they need it,” Maroney said. “It's how we do well, by doing good caring for those who can't care for themselves, reducing overall cost and reinvest reinvesting in those savings into richer benefits that let us serve even more seniors.”

Alignment Health has grown to support more than 200,000 seniors in Arizona, California, North Carolina, Nevada and Texas.

‘Crush the fax machine lobby’

Brian Miller, MD, MBA, MPH, contrasted FFS Medicare and MA, describing the former as a program for the financially secure, and MA as fundamentally a safety net program.

To improve the program, seniors should have more choices for care. They need better tools to filter choices in the plan finder, Miller said.

Physicians and other clinicians also make up an important stakeholder group in MA. Improvement is easy: reform prior authorization that started under the administration of President Joe Biden and continues under guidance of Health and Human Services Secretary Robert F. Kennedy, Jr.

“We must crush the fax machine lobby together,” Miller said. “It's not a partisan issue. We should make it easy to submit data as part of routine clinical care, and we should automate approval, not denial.”

The Stark Law governs hospital ownership by physicians, and Congress should consider a Stark Law waiver in the setting of managed care to support private practice and physician-owned enterprises to compete against big hospital monopolies, Miller said.

Congress and health care sector analysts also need to examine per component benefit costs, the costs of a holistic health benefits package, and statutory program spending. “All three measures matter. Currently we only do the last one when we compare the programs,” he said.

Miller, a hospitalist, noted his testimony did not necessarily represent views of Johns Hopkins University, the American Enterprise Institute, the Medicare Payment Advisory Commission, or the North Carolina State Health Plan, which are organizations he works with.

Administrative burdens are growing

Avera Health, based in Sioux Falls, South Dakota, has grown to become a leading rural health care delivery network, with 37 acute hospitals, 200 clinics, 40 long-term care and assisted living facilities, with home care and hospice services. It also manages an insurance division, said David Basel, MD, an internal medicine and pediatric specialist and Avera Health vice president of clinical quality and population health officer.

“Avera’s dual role as both payer and care provider allows for more effective management of patient care and quality outcomes,” he said.

“From a population health perspective, MA plans have the potential to support a broader definition of health as opposed to just paying for sick care,” Basel said. “However, on the health care delivery side, we are seeing issues such as payment denials, authorization delays and nonpayment by MA plans that are hitting our rural facilities and their patients particularly hard.”

On the care delivery side, care denials have more than doubled in volume since 2022; more than 70% of those are denied, but it is an increased administrative burden, Basel said. MA plans are refusing payment for longer patient stays or readmissions, even when a hospital readmission is unrelated to an initial episode for a patient.

“In conclusion, the administrative burden and volume of appeals associated with MA plan denials continues to grow,” Basel said. “These discrepancies compromise timely access to care, increased physician burnout, increased member costs and penalize hospitals unfairly as you look to possible solutions, we emphasize that consistency, stability and transparency are all important with the well-being of the patient as the top priority.”

Serving patients, not Wall Street

SCAN, the Senior Care Action Network Health Plans, was created in 1977 by “12 angry seniors” fedd up with a fragmented health care system that did not meet their needs, said CEO Sachin Jain, MD, MBA. Now SCAN serves more than 300,000 MA beneficiaries in Arizona, California, Nevada, New Mexico and Texas.

“What sets SCAN apart? We are proudly nonprofit,” Jain said. “This matters. This means that we can prioritize the long term well-being of our members over the short-term financial returns that shareholders expect. We serve the people who trust us with their care, not Wall Street.”

SCAN’s plans consistently have earned high quality ratings, Jain said, and his own in-laws are members.

When Medicare started in 1965, it was a noble effort and program that brought healing miracles of modern medicine to people. It literally changed the face of the country, Jain said.

But the program has gaps, with no dental, vision or hearing benefits, and with little focus on prevention or coordinating services. Medicare Advantage brings those and can dramatically reduce cost-sharing with beneficiaries. It absolutely has problems that need addressing, “but let’s not miss the forest for the trees,” Jain said.

He cited examples of a patient with diabetes traveling to a doctor’s appointment through provided transportation; a man managing hypertension with a health coach, dietitian and remote blood pressure monitoring; and a patient discharged from the hospital with needed medical equipment and follow-up all arranged.

“These types of services and benefits are not luxuries as they're often represented,” Jain said. “They protect health, they protect independence, and they protect dignity, and are all uniquely available because Congress, in its wisdom, gave plans the flexibility to innovate service and benefit design.

“Too often, we debate Medicare Advantage in abstract terms. We talk about payment rates, we talk about benchmarks and coding intensity,” he said. The program certainly needs reform of risk adjustment, utilization management and the stars program that measures quality.

“But the real test is this: What does life look like for older adults with these plans, and what does it look like without them?” Jain said. “For too many older adults, it means the difference between stability and insecurity, prevention and crisis, dignity and decline.”

Paying for value?

MA costs an estimated 20% more than covering a beneficiary under traditional Medicare, said Matthew Fiedler, a health economics and senior fellow at the Brookings Institution. That cost is covered by taxpayers and Medicare Part B premiums.

Fiedler talked about risk adjustment and how MA plans tend to overstate the needs of enrollees, reporting more health conditions than if the beneficiaries were in FFS Medicare, where there is no incentive to record every possible diagnosis.

“Research shows that paying an MA plan an additional dollar delivers much less than $1 of value to enrollees,” Fiedler said. “When policy makers make the MA payment system more generous, insurers respond by raising the prices they charge to deliver the basic Medicare benefit. As a result, only part of the higher payments to plans, evidence suggests around 50 cents on the dollar, finances extra benefits such as reduced premiums, reduced cost sharing, or coverage for services that Medicare does not cover.

“It's unclear how insurers use the remaining amount that is not passed through to beneficiaries, but at least part is likely captured as profits and spent on marketing, because $1 paid to an MA plan delivers much less than $1 value to beneficiaries,” he said.

There are potential solutions, such as reforming MA payment to align it with the cost of covering comparable enrollees under traditional Medicare, Fiedler said. A worthwhile step would be for lawmakers to more clearly specify how the Centers for Medicare & Medicaid Services should calculate the coding intensity adjustment it uses to offset MA plans more intensive diagnosis coding. That adjustment currently is much too small, he said.