The document linked below, published by the Medicare Payment Advisory Commission (MedPAC), is often cited as an authoritative explanation of Medicare Advantage (MA). It is important to be clear at the outset about what it does not do.
MedPAC does not assess whether Medicare Advantage serves beneficiaries better than Traditional Medicare.
Nor does it compare the cost-effectiveness of MA versus Traditional Medicare in terms that matter to residents: access to care, continuity of providers, administrative burden, or outcomes when health needs become complex. Those questions are outside MedPAC’s scope—and therefore absent from this document.
What MedPAC does provide is a technically accurate explanation of how the Medicare Advantage payment system operates: bids, benchmarks, risk adjustment, rebates, and quality bonuses
MedPAC_Payment_Basics_25_MA_FIN…
. In other words, it explains how the machine works, not whether the machine lives up to the promise implied by the word “Advantage.”
That distinction matters. A payment system can function smoothly, comply with statute, and still create incentives that do not align with residents’ long-term interests. This document treats Medicare Advantage as an established framework and focuses on refining its mechanics, rather than questioning whether the framework itself delivers superior value to beneficiaries or to taxpayers.
From a resident-advocacy perspective, several critical dimensions are missing:
- how payment incentives shape network breadth and prior authorization practices
- whether “extra benefits” compensate for restricted choice or delayed care
- how plans perform when enrollees become sicker or require specialized services
- whether higher risk scores reflect better care or simply better coding
For these reasons, this document should be read as a reference, not an endorsement. It is useful for understanding why MA plans can offer additional benefits and how public dollars flow to private insurers. It is not evidence that Medicare Advantage provides better care, better value, or greater security for residents than Traditional Medicare.
NaCCRA members are encouraged to read this document critically and to distinguish between payment efficiency and resident outcomes—a distinction that MedPAC’s analysis does not attempt to make.
Richmond Shreve
NaCCRA Board Member & VP
Forum Moderator