The cost of Medicare is going up, especially for those seniors enrolled in Medicare Advantage plans. Why these plans in particular?
Christopher Weaver and Anna Wilde Mathews, writing in The Wall Street Journal, tell us that the average American senior’s Medicare premiums last year were about 10% higher, or more than $200 annually, because of alleged overpayments to private Medicare Advantage plans, congressional investigators found. Medicare Part B premiums that most seniors pay were partly pushed up by controversial health-insurer practices such as adding diagnoses to trigger higher payments, according to the Joint Economic Committee, a bipartisan group of lawmakers that advises Congress on financial matters.
Overpayments to Medicare Advantage insurers increased Part B premiums by $13.4 billion in 2025, the committee said, a cost mostly borne by seniors. Both those enrolled in Medicare Advantage plans and those in standard Medicare faced those additional costs.
This story was first reported by these same authors in 2024 and I posted a blog concerning this called Home Nursing Visits Bilking Medicare for Billions. They discovered that insurance companies were instructing their home nurses who visited Medicare Advantage patients to add diagnoses to the patient record whenever possible to increase payments from the federal government. Later, in early 2025, they also reported similar activity by doctors working for the UnitedHealth Group. They revealed that the insurer had prepared checklists for potential diagnoses even before the patients were examined, as if the doctors needed to be educated!
Why would they encourage adding diagnoses?
More diagnoses make for higher scores—and larger payments. A Wall Street Journal analysis found sickness scores increased when patients moved from traditional Medicare to Medicare Advantage, leading to billions of dollars in extra government payments to insurers.
This latest report from these investigative journalists shows that more diagnoses means more money for insurance companies and higher payments from Medicare and higher premiums from seniors.
Lawmakers and government investigators have been probing how insurers’ billing practices have contributed to Medicare Advantage costs. A congressional watchdog found Medicare Advantage costs the federal government more than traditional Medicare, partly because of insurers’ billing practices. The insurers are paid more to cover enrollees who have more health conditions, and they can boost their reimbursement by recording more diagnoses.
The average Medicare beneficiary paid $212 extra in 2025 due to Medicare Advantage “overpayments,” the committee said. Medicare recipients with higher incomes pay higher premiums, and for those people, the committee said, the extra payments could be as high as $682 a year.
In an interview recently, Medicare agency administrator Mehmet Oz said of Medicare Advantage insurers, “I don’t think they’re as overpaid as has been reported.” Yet, he said, the Medicare Advantage payment system had at times created the wrong incentives and “we should change the rules.”
