January 22, 2026

Medicare Advantage costs the federal government about $76 billion more per year than traditional Medicare, totaling 114% of fee-for-service Medicare spending despite similar underlying costs. This higher spending is driven by favorable selection (11%) and increased coding intensity, or upcoding (4%); without these factors, MedPAC estimates Medicare Advantage spending would be about 99% of traditional Medicare, raising concerns that taxpayers are overpaying private plans without clear added value.

The White House’s “Great Healthcare Plan” aims to slash prescription drug prices, lower premiums, hold insurers accountable, and expand price transparency. Efforts include shifting ACA subsidies toward consumer health savings accounts, reinstating cost-sharing reduction payments, and requiring insurers and providers to publicly disclose prices, coverage comparisons, claims denial rates, wait times, and spending on care versus profit. While the administration argues the plan would cut premiums by more than 10% and save taxpayers at least $36 billion, experts say the proposal is light on details and that replacing ACA subsidies with HSAs may not increase affordability for many enrollees.

Kaiser Permanente agreed to pay $556 million to settle Justice Department allegations that it pressured doctors to upcode Medicare Advantage patients from 2009 to 2018 to secure higher federal payments, marking the largest MA upcoding settlement to date. Kaiser denied wrongdoing, saying it settled to avoid prolonged litigation, as federal scrutiny of industrywide risk-adjustment practices continues to intensify.

Trinity Health is laying off 10.5% of its revenue cycle management staff and outsourcing that work to cut costs as it faces rising expenses, low reimbursement rates and federal funding cuts. The system, which projects up to $1.5 billion in annual revenue losses from recent policy changes, says the move is necessary to maintain long-term financial sustainability amid mounting industry headwinds.

Physician groups said they welcomed any improvement to Medicare rates, but that doctors’ reimbursement in the federal insurance program for seniors and disabled Americans will continue to be inadequate without meaningful reform.