A new report released by the bipartisan Senate Joint Economic Committee (JEC) on Tuesday found that overpaying for Medicare Advantage (MA) plans caused Medicare Part B premiums to rise across the board.
According to the JEC’s report, overpayments to MA plans caused standard monthly Medicare Part B premiums to go from $185 in 2025 to $203 in 2026.
The report defined “overpayments” as the difference between what the federal government government paid for MA plans versus Traditional Medicare (TM) plans. When payments to MA plans exceeds those for TM plans, premiums go up for both groups.
In 2025, MA plans were paid $84 billion more than it would have cost to cover the same amount of beneficiaries with TM plans, an average of 120 percent more.
Medicare Part B covers medically necessary services like doctors visits, supplies and some outpatient prescriptions as well as preventive services. Roughly 63 million people are enrolled in Medicare Part B and a little more than half are on Medicare Advantage, which combines both Part A and Part B.
The JEC further noted that the burden of MA overpayments are spread unevenly across the country as some districts and states have lower rates of MA enrollment. The report gave the example of Wyoming, where only 21 percent of Medicare beneficiaries are enrolled in MA, estimating that payers in the state will pay $25.4 million in excess premiums, with most of that from TM enrollees.
“Let’s be honest about the math, when Medicare Advantage is overpaid, that money doesn’t just disappear, it shows up in the Medicare Part B premiums seniors pay every month, including those paid by traditional Medicare beneficiaries who are not getting extra benefits,” said JEC Chair David Schweikert (R-Ariz.) said in a statement.
“If Congress is serious about affordability, fiscal responsibility, and fairness, we must take a hard look at Medicare Advantage and make sure the rules are the same for everyone,” he continued.
“Today, between aggressive upcoding, questionable quality bonuses, and structural overpayments in Medicare Advantage, seniors who stay in traditional Medicare are effectively subsidizing the system. That’s not sustainable, it’s not fair, and it can be reformed.”