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Yes.
The federal Medicare program spends more per beneficiary for a person on Medicare Advantage than if the person were on traditional Medicare.
The difference is projected at 20% higher, or $84 billion, in 2025, compared with 22% and $83 billion in 2024, according to the Medicare Payment Advisory Commission.
The independent congressional agency says a key reason is Medicare Advantage uses a fixed monthly payment per beneficiary, rather than fee-for-service.
Medicare is federal health insurance mainly for people age 65 and over. Medicare Advantage is a private alternative paid for by Medicare. Advantage enrollees can get more benefits, but are restricted on providers they can see.
Advantage enrollment has been increasing, but some enrollees find it difficult to switch to traditional Medicare when they get older and sicker.
Democratic U.S. Rep. Mark Pocan, who represents the Madison area, claimed in April that Medicare Advantage was created to save money but costs more than Medicare.
This fact brief is responsive to conversations such as this one.
Sources
- Medicare Payment Advisory Commission: Medicare Payment Policy 2025
- Medicare Payment Advisory Commission: Medicare Payment Policy 2024
- Healthcare Brew: Medicare Advantage may cost the government $84b more than traditional in 2025
- Social Security Administration: Medicare
- Medicare.gov: Understanding Medicare Advantage Plans
- KFF: What is a Medicare Advantage plan? How does it differ from traditional Medicare?
- KFF Health News: Older Americans say they feel trapped in Medicare Advantage plans
- Rep. Mark Pocan: Rep. Pocan Green County Town Hall
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