GAO Eyes Medicare FFS Plan Bids

Managers of most Medicare Advantage plans seem to be shooting for similar profit margins, according to officials at the U.S. Government Accountability Office (GAO).

Even though the plans seem to be aiming for similar profit margins when they bid, Medicare Advantage health maintenance organizations and Medicare Advantage plans in areas where costs are generally high seem to do a do better job of being cheaper than traditional Medicare than other types of Medicare Advantage plans and Medicare Advantage plans in low-cost areas, James Cosgrove, a GAO director, writes in a GAO Medicare Advantage analysis prepared at the request of high-ranking House Democrats.

The private insurers that run Medicare Advantage plans now cover 11 million of the 46 million Medicare enrollees.

Some Democrats argue that the traditional Medicare is cheaper than the Medicare Advantage program, and that the Centers for Medicare and Medicaid Services (CMS), the agency that oversees Medicare, is subsidized the Medicare Advantage plan enrollees at the expense of traditional Medicare enrollees.

Medicare Advantage program defenders argue that the carriers in the program provide better, broader benefits than traditional Medicare.

The GAO researchers looked only at bid amounts,