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Medicare Trustees Show that Medicare Advantage has Saved Medicare

Medicare Commission 2023 Annual Report

June 7, 2023


The Medicare trustees just published their 2023 annual report. It shows and proves that Medicare Advantage is saving Medicare.

Medicare Advantage costs less, delivers better care, and is using the savings from better care in the plans to save the Medicare Trust Fund.

We know from that report that the Medicare trust fund reserve did not shrink in 2022 after almost two decades of weak performance in that area for the country.

We know that the trust fund will now grow instead of shrink with Medicare Advantage as the primary payment model for Medicare, and we can plan to build on that better performance as a country and a program for care.

We know from that report that Medicare spent $403.3 billion on Medicare Advantage last year.

That amount included every possible expense to Medicare for the program. It should resolve the concern about up coding Medicare payment data, because it’s the total payment from Medicare to the plans, and it’s the total cost of Medicare Advantage to the Medicare program for 2022.

There is nothing that the plans can do to distort those numbers, because they’re paid in dollars — not codes. That number in the 2023 report reflects all of the discounts against the benchmark data that happened for that entire year. It gives us the actual extremely important and relevant cost and number to build on for future expenses for Medicare Advantage members for future years.

We know from the financial results of having the trust fund increase in size for 2022 that it’s a very good number for Medicare to have spent last year. We also know from the trustee report that they now expect the 2023 spending for Medicare Advantage to increase at a significantly better level than other parts of the program.

Those numbers are shown in the yellow boxes on the chart illustrating this information.

It’s very important and very positive and beneficial to not only have Medicare Advantage growing in 2023, but also have over half of the total Medicare membership enrolled in the program.

We know that Medicare Advantage now has slightly over half of the Medicare members enrolled in plans, and we know that their costs will increase at a very positive and beneficial number for Medicare.

It’s important to understand the overall revenue and the costs of the various parts of the Medicare program. The trustees included those extremely important numbers in their current report.

We know from that 2023 Medicare trustee report that Medicare as a program grows in relevant revenue each year by 6.7 percent. And we know that the expenses charged against that growth and income number by the key component parts of the Medicare program shape and create the Medicare trust fund each year.

We know from that 2023 trustee report that Medicare Parts A and B have current expense increases that exceed 7 and 8 percent of the cost for those programs. We know that Medicare currently loses money on both Part A and Part B Medicare members, because those numbers exceed the 6.7 percent overall program revenue increase number.

We know that Medicare Advantage has much lower cost increase numbers than Medicare A and Medicare B. We know from the report that the cost increases per person that the trustees predict for Medicare Advantage will be 4.2 percent of prior expenses for the year, and we know from more recent data from CMS that the cost increase for 2024 will actually be 3.30 percent for the year.

We know that Medicare Advantage builds reserves and Medicare assets from the surpluses and deficits created by the difference between those revenue increases and those expenses for plan members.

We’ve now reached the point with slightly more than half of Medicare members currently enrolled in Medicare Advantage plans where we’ve reversed a 20-year pattern and trend of having the Medicare trust fund losing money overall each year.,

We’re now on the path to having Medicare in the black as a total program. The information and the financial results in this report give us a sense that we have Medicare on the path to be solvent in a comfortable and dependable way for the foreseeable future — if we continue to follow the approaches we’ve been following now to fund and support the Medicare Advantage program.

The new normal for Medicare, with Medicare Advantage being over half of the enrollment, can be projected as having Medicare increase the size of the trust fund reserves every year and not being in danger of the insolvency levels that have been projected by the Medicare trustees in their annual report every year for almost two decades.

The trustee report on page four explains that the Medicare Part A cost levels and reserves were enhanced in 2022 by having some of the highest cost members who have dual eligibility for both Medicare and Medicaid enrolling in the Medicare Advantage Special Needs Plans and thereby removing their high expenses from Medicare A costs for lower plan expenses for that program.

The trustees noted that the fastest growing segment of Medicare Advantage today is the special needs plans — with over 20 percent growth for those members for each of the past two years. The trustees are now keeping track of that program for those members as a separate cost category, because it has such a high impact on Medicare Part A direct expenses.

The Medicare Advantage critics who write consistently inaccurate and distorted thought pieces and attacks on Medicare Advantage plans in various technical and academic settings for upcoding their risk pools have been wrong in their description of the impact of those plan coding approaches.

The critics of the plans’ current reporting systems and operations, who claim the plans succeed by avoiding risk and manipulating data, never mention and carefully avoid discussing or even describing the 5 million extremely low-income and high medical-need members of that program for the people with eligibility for both Medicaid and Medicare, because of their high health needs and the extensive care that exists and happens for those Medicare Advantage members.

The upcoding attacks about the plans, in a number of venues and settings, that described the plans of avoiding risk as their basic business model obviously don’t make sense in the context of those very expensive and high-need special-needs plan members.

The policy journals have allowed the upcoding attacks to be made by those critics without explaining that there’s no possible relevance for those attacks for that entire set of very visible members who have multiple co morbidities, serious diseases, and major health issues that clearly make upcoding issues functionally irrelevant if anyone tried to do them.

The critics and the thought pieces who attack the plans also don’t describe or discuss the fact that those upcoding and cash flow enhancement accusations have no role in the actual cash flow for the Medicare program as it exists today, because the data set for the payment model and process is now based on encounter reporting, rather than on plan coding processes that used to be the core of that program.


CMS completely eliminated the old plan risk coding reporting process in 2020. They replaced that old coding system for risk levels, which had triggered so many concerns from some people with a new and better system that uses encounter reports from every patient encounter as the source of data for the plan risk levels, and as the source of care delivery practices that trigger the payment system for the plans.

The plans provide the diagnostic information of each patient through that encounter reporting process that ties back to the medical records of the patients — and that encourages the plans to have the most accurate diagnosis in their Medical record, but doesn’t allow the plans to generate those sets of reports that used to cause so much concern for the Medicare Advantage critics.

That is a very accurate and safe and effective system.

The diagnosis from the medical records for each patient feeds the data base for the capitation system for the plans that triggers the actuarial levels for the capitation payments being made today for Medicare Advantage.

Capitation as a system, a process, and as a flow of cash is the key to Medicare solvency and success today, because it gives the plans the money they need to deliver care, enhance benefits, and create the cashflow that’s allowing the Medicare trust fund cash reserve to grow, instead of shrink each year.

The cashflow for the plans is completely and entirely a capitation cash flow system. The plans aren’t paid by the piece for each piece of care. The plans are paid a capitation amount per member and that capitation is based on benchmarks that are created by the average cost of Medicare in every county.

We know that Medicare Advantage costs less than fee-for-service Medicare in every county, because we know what the average costs are, and we know what the plans bid to provide that care. Lower bids are savings for Medicare.


The average cost of fee-for-service Medicare in every county is calculated as a starting point for the capitation building process each year.

We know before the year begins if the plan expenses will be higher or lower than the average cost of Medicare in every county, because that average cost of fee-for-service Medicare in every county functionally starts the process, and it’s easy to see when the plans are paid less than that average cost of fee-for-service Medicare, because it’s a very visual process.

The plans learn the average cost of fee-for-service Medicare in every county each year and that number is calculated with data processes and cost totals that have been time tested for accuracy, consistency, and legitimacy over time, because they do it each year.

They all know what the history is for that Medicare cost number in each setting. The plans get to use that county specific benchmark number to bid their own capitation level for each year, and they directly use that benchmark data as the anchor and starting point for the process.

The plans are paid the capitation levels they bid in that process.

They very consistently bid lower costs than the average cost of Medicare in each county to set their capitation levels. Those lower payments of capitation that are created for each member add up to the $403.3 billion total expense for 2022 that the trustees noted in their 2023 report, and that capitation payment is the only money the plans ever receive from Medicare.

It includes the impact of any and all of the upcoding processes that the critics complain about the plans using, because it’s the actual payment to the plans. It’s not an approximation or an estimate based on some risk-level manipulations or speculations done by the plans.

It's actual dollars paid to the plans and it’s all of the dollars paid to the plans by Medicare. That $403.3 billion is what Medicare Advantage cost for 2022.

The Trustee Report for 2024 will have another number in that line for 2023 costs — and that will be one of the most important lines in that report for next year, because it will include all of the impacts of everything being done in the cashflow for Medicare Advantage plans this year,

It will summarize the amount of money that the plans get in capitation for this year. The plans looked at that average cost of care in every county for fee-for-service Medicare and they set their bids for 2023 based on that number. They discount that benchmark number in every county significantly — and pay less than fee-for-service Medicare in every county as a result.

That’s why and how we know that the $403.3 billion cost for the program is less than Medicare would have spent on those same enrollees if those enrollees had not enrolled in plans and how we will know that the 2024 number will be less than fee for service Medicare would have cost for the year for those members.

We know that to be true because when the people didn’t enroll in any plans, and when they added up the cost of fee-for-service Medicare in each county a year later for all of the people who did not join plans, those numbers and expenses are very close to the prior year costs for those settings every year.


When they do enroll in plans, the expenses for those members change significantly. They drop to lower levels. MedPac agrees in their current report that the Plans spend 17 percent less for those same benefits for those same people than fee-for-service Medicare spends and that creates a lower total cost for Medicare Advantage that equaled $403.3 billion for 2022.

The plan average bid discount this year from the average benchmark fee-for-service costs in every county is 18 percent.

The plans bid those discounts because care is much better and much less expensive in the plans. It isn’t a marketing approach or a sales technique. It’s based on the actual lower costs created by better care.

We have some of the highest rates of diabetic blindness in the world for our low-income populations — and the people who designed the Medicare Advantage quality programs knew that you can reduce diabetic blindness by more than 60 percent by managing the blood sugar of those patients.

The first Medicare Advantage quality target in the five-star quality program is to manage the blood sugar level for the patients.

Almost 90 percent of the plans now achieve the five-star plan higher ratings and goals, and the blood sugar management goals and performance levels for the plans with those patients even improved during Covid.

Those numbers are all very visible to everyone, because the goals of the Medicare Advantage quality and service goals are all part of a very visible process for everyone to see.

Diabetic blindness is very expensive for Medicare — and the high cost of that failed care for so many people increases the average cost of fee-for-service care in each county and that cost sets the benchmark for the plans to bid against.

It isn’t upcoding that creates those bids. It’s much better care.

We have some of the highest amputation rates in the industrialized world and the impact of that procedure is particularly high for our low-income people. Medicare spends billions of dollars on amputations each year and they now cost over $100,000 per patient to remove a leg.

The plans know that 90 percent of the amputations are caused by foot ulcers on diabetic patients. That is basic medical science. The plans also know that you can reduce foot ulcers by over 40 percent with just dry feet and clean socks. The plans are all capitated, so they have a strong financial incentive not to have those amputations happen for their members and they can use their capitation money to pay people to help people with that basic care.

Fee-for-service Medicare doesn’t pay caregivers for some of those services.

Over 90 percent of the Special Needs Plans manage that situation and less than 30 percent of the fee-for-service Medicare patients in low-income settings have that same approach.

Those high costs of amputation are included in the average cost of fee-for-service Medicare that sets the benchmark numbers for each county for the plans to use.

The people who designed the Medicare Advantage program set up a process that keeps track of whether the plans make a profit or a surplus in costs when they provide care. The surpluses created by better care are used by plans to increase the benefits offered by each plan to their members.

The plans offer dental benefits, vision benefits, hearing benefits, and a variety of social and service benefits that fee-for-service Medicare does not provide. The plans pay for those benefits entirely with the surplus they create from the discounted bids. There’s no additional cost to Medicare from those additional benefits.


One of the more significant additional benefits that some plans pay for is to buy Medicare Part D drug coverage for their members. Many Medicare Advantage members get Part D coverage for free because they’re in plans that pay that premium.

Some plans even pay the actual Part B basic enrollment premium for their members from their profits and surpluses. That shows up as a revenue line against the Part B trust fund report and it isn’t an additional cost for Medicare.

Traditional Medicare is obviously an inept, ineffective, ineffectual, marginally incompetent, and very weak user of the Medicare dollar in too many ways. Traditional Medicare is far better than not having any coverage at all, but the basic benefit package is clearly suboptimal and inferior in a couple of areas. We know what those numbers are.

The fee-for-service Medicare members now have an average out of pocket personal cost of care every year of more than $5000.

Five-thousand dollars per person on average is a lot of money.

The Medicare Advantage critics don’t mention those dollars from traditional fee-for-service Medicare in their attack pieces on the plans and on Medicare Advantage.

Wealthier Medicare members who don’t want to join plans often buy supplemental coverage from insurance companies to make up that benefit weakness for fee-for-service Medicare coverage. Lower income people tend to join plans because the benefits are so much better, more complete, and usually free.

The Medicare Advantage critics never mention those enrollment patterns in their attacks on the plans.


Two out of three of the lowest income members have now joined plans. African American members also now have two thirds of the members in plans and the Hispanic population with Medicare coverage currently have over 71 percent of the members in plans.

The average net worth of the people who buy supplemental insurance coverage is over $200,000. The average net worth of the Hispanic members who have joined the plans is $14,000 — and that asset level might have gone down during Covid.

The Medicare Advantage plans are clearly a much better use of the Medicare dollar for everyone with low levels of financial assets who wouldn’t be able to purchase many of those services if they weren’t in the plans.

The total relevant financial reserve level for Medicare was at $409 billion at the end of 2022. That reserve level increased by $83 billion based on some Covid related lower utilization levels in hospitals and having some of the highest cost members moving from Part A coverage to Medicare Advantage Special needs plans during the year.

The reserve levels didn’t drop in 2022 as the result of those expense patterns, and we should be able to maintain both that reserve stability and those high levels of expanded benefits if we continue on the paths that we’ve been on for the past several years with Medicare Advantage.

Those expense patterns and surplus levels should be what we’ll see for the rest of this decade if we stay on this path for those programs.

That isn’t the official current projection from the trustees and the Medicare Commission, and we need to get them to change that position and approach for the years directly in front of us.

The trustees indicated with a high level of caution in their 2023 report that they’re concerned and that they’re warning again that if the cost levels for Medicare A and Medicare B return to their prior expense levels — and if the Medicare C cost increases for those years then also increase from current levels, and rise to those same levels as Medicare A and B, then the reserve levels for the overall program might be inadequate within the decade, and that amount of money might not be enough to pay future claims for those people and maintain the solvency of the program.

That is the wrong path for us to be on, and we need to change it now. If we have the costs of Medicare Parts A and B as the only costs charged against the trust fund, and if Medicare C cost increases for the next years somehow rise to the same levels as the Medicare A and Medicare B costs, then the trust fund reserve won’t last a decade as it now stands, and those gloomy projections from the trustees would be accurate.

That is actually not the path that we’re on, and we need to stay with the trajectory that works now to achieve the current results for the members.

Adding to the Medicare trust fund reserves every year with Medicare Advantage as a majority of the enrollees should be the new normal for that expense and for those reserves.

We need the annual report from the Medicare trustee commission for next year to more accurately reflect what is actually happening and what should be happening.

The best trajectory for Medicare is to continue to increase enrollment in Medicare Advantage and to have the money created by that enrollment fund the reserves we need to survive and thrive.

The current politically influenced and created projection in the report is to say that Medicare Advantage costs will somehow change and increase for 2024 and subsequent years to match the exact cost increases of Medicare Parts A and B for those years. That projection will make those cost increases at 8 percent instead of 4 percent for those members.

They somewhat vaguely currently predict in a politically safe way that some combination of risk-level issues that aren’t determined or defined or described in any way will cause the 8 percent number that clones Medicare A and B expenses to happen for the people who are enrolled in Medicare Advantage.

The people writing that piece of the trustee report seem to be very cautious, and maybe even afraid at some levels, of the high negative energy that exists today from the Medicare Advantage upcoding attack group.

Instead of simply projecting that the current costs that exist today for the Medicare Advantage plans will continue into 2025 and subsequent years, they officially say that Medicare Advantage costs will directly echo and clone the Medicare Parts A and B costs after next year, and the overall trust fund will be insolvent in about seven years if those higher costs for those members happen for those years.

The upcoding attack team political clout and highly skilled and effective negative communication approaches that they’ve been using in all of those policy and political settings seem to have diverted the projection process for the trustee team away in that key area from what we’ll clearly be doing in the real world with both Medicare Advantage prices and costs.

We need the people doing the projections for the trustees to look at the real numbers that we’re seeing today and use them to plot out the future for the program.

So, what’s true? And what can we count on now?


What’s true is that we’ll keep Medicare Advantage cost increases per member at 4 percent or less every year, and we’ll base the Medicare trust fund reserve contribution numbers on the current actual dollars being spent on those members by Medicare. That will make care better and it will save the trust fund.

The arithmetic works.

We can simply have the Medicare Advantage costs increase at less than 4 percent each year and that will offset the losses from Medicare Parts A and B, with 7 and 8 percent total cost increases for those programs.

We’ll make that reserve solvency goal happen for the entire program as a blend of the two financial trajectories and from the cost realities that exist from that approach.

It actually doesn’t matter for the success of that approach if we miss on our cost projections for Medicare A and B for those years, because the Medicare Part C system is a rock-solid capitation payment level, and we have huge control over that number because it is capitation.

The right number for the program is to do what we’re now doing, and have a number each year from Medicare Advantage that is guaranteed, appropriate, safe, and a very good use of the Medicare dollar, and doing that intentionally and well makes us an extremely competent buyer, rather than a payer for that care.

We’ve decided that our capitation number as a system for 2024 will be 3.30 percent, and because we’ve decided that will be the number, it is in fact the number for that year. The numbers at the top of this page have that number in them for next year, and we know it will happen, because CMS has the authority to make that decision and made it.

The Medicare Advantage program was built into the Affordable Care Act in very intentional, deliberate, strategic, tactical, and intentional ways to be the capitated portion of the American health care economy that was created to set up, fund, and reward continuous improvement in care delivery.

Both President Obama and President Biden should be celebrating how well that has worked. Their teams built the Affordable Care Act model, and they’re now running the overall programs well enough to make them financial winners for the long term.


Care is changing rapidly. We should use those changes for optimal effect on Medicare and the nation, and we should use our Medicare Advantage program expectations to facilitate, support, and guide those enhancements as part of the capitation funding for care.

We should make care improvement a national goal and use the capitated plans to and the Medicare Advantage plans to make that happen.

We should be on the cusp of a golden age for care improvement. We should be using better connectivity, better diagnosis, better care information, better care support, and better use of the most effective artificial intelligence tools for making care better in ways that will also make care less expensive if we do it well.

Preventing foot ulcers and with basic direct patient focus has cut amputations by more than half for the plans now. The Medicare Advantage critics write in Health Affairs — and Health Affairs publishes their pieces — to directly and shamelessly say in several settings and publications that the only reason health plans have nurses going into homes “is to harvest diagnosis so they can upcode those patients.”

Those critics and the publications that ran their pieces should apologize to those care sites and to the nurses who they insulted with that accusation. We should change their practices, messages, and data flows to get more people into plans, rather than trying to take away the benefits from plans and reduce the number of people enrolled in places and care settings that transform their lives.

Some of the MedPac people oppose the enriched benefits created by the Medicare Advantage surpluses. The chair of MedPac even published a piece in Health Affairs wondering how much those benefits could be cut and who would even miss them if they were gone. He also thought it wasn’t fair for wealthy people to have to join plans to get those benefits for free, and he suggested in a podcast interview with the editor of Health Affairs last month that particular equity issue for wealthy people should be on the agenda for us to discuss and resolve as a nation.

MedPac also very much wants to cut benefits for Medicare enrollees and they carefully avoid any mention of making care better or enhancing care in any way in any of their plan related documents.

MedPac writes about Medicare Advantage entirely as an insurance related set of issues and they have no materials that look at the huge opportunities that exist to make care better at a time when we should save Medicare by improving care and not improving coding issues.

There isn’t one line in hundreds of pages of MedPac discussions about Medicare Advantage that deals with continuously improving care or care enhancements at any level. They don’t think that the fact we have gone from only 10 percent of plans achieving the top-quality ratings to a much higher number performing at that level. They don’t see the obvious success that we’ve now reached (with 90 percent of the plans performing at that level after years of hard work) as a legitimate topic for either discussion or celebration by anyone at MedPac.

They want to end the five-star plans and they want to replace them with some level of regional quality goals that don’t “confuse” the plans by being too specific about performance. That’s a very bad recommendation, and they continue to repeat it in their reports.

MedPac continues to write its own very strange overpayment report every year that gets quoted often.

That report looks at the data that comes from the plans having 35 percent lower emergency room visits, half as many people with congestive heart failure patients, and half as many people going blind — and they literally say the plans are overpaid because the capitation benchmark average cost data for each county has those patterns of inferior care that don’t exist today for those people.

They say every year that the plans are overpaid because they don’t have those patterns of care when they draw up a fee schedule and a list of procedures showing the care that is there now for the patients.

Unfortunately, that particular report gets quoted fairly often as a proof point for overpayment by the people who are critical of the plans.

They also intentionally and completely ignore the care being received by the 5 million special needs plan patients in their over payment accusation that has many care elements that aren’t on the Medicare fee schedule.

That is a very wrong report about overpayment. But it gets quoted often.

People who read or hear it should say to whoever is using that overpayment report: “Show me the data Show me the actual data that you used for those people. Add to their costs, the 35 percent lower use of emergency room care that wasn’t on the expense list.

Add to their costs 40 percent higher use of congestive heart failure admissions. Add to their costs the 50 percent lower asthma attack admissions. Add to their costs the significantly lower rate of blindness interventions.”

Sharing that accusation and using that report about overpayment without adding back in the actual and clear differences in the patterns of care is a sham, a fraud, a deception, and an intentional misrepresentation of the actual costs of care for those people.

We need people to stop using that report and that declaration of relative cost without adding those actual expenses for those groups of people back into the report.

They have used that fraudulent overpayment assessment and report for over a decade. It should stop.

We know that the total cost number for the year that was actually paid to the plans was based on the 15 percent discounts over the cost of fee-for-service Medicare that we have now in every county.

We know the $403.3 billion is less than we would have paid for those same members without the plans, because that expense and payment had 30 percent fewer hospital days for chronic conditions and 40 percent lower hospital days than we would’ve had as congestive heart failure crises. We know that the resultant underlying expense was an extremely good use of the Medicare dollar.

We also know as a context number that the total income and revenue for Medicare for those patients will go up by 6.7 percent for the total membership and we know from that 2023 report that the Medicare Advantage expenses for the members of the plans will increase by 4.2 percent for this year.


We don’t need to hope or wish or guess about the 2022 number that will exist with Medicare Advantage for those expenses.

We know that the trustee estimate of the actual expense per plan member is pretty accurate, because the actual capitation increase payment number has been set by CMS for the capitation amount for the year.

We know that will be right on point for that trustee estimate at 4 percent for the year.

We also know that CMS has decided to raise the capitation paid to the plans for 2024 by 3.30 percent for the plans.

Those are excellent numbers for the next two years. They tell us and prove to us beyond simple speculation or supposition or theory that the program is succeeding far beyond what the critics say is happening or could happen with the plans.

Their upcoding myths and accusations are highly energized, highly politicized, and completely wrong, because we know what the real dollars are that are being spent on the plans. The program runs on dollars and not on risk codes.

We need everyone to understand and appreciate what the financial and performance situation for Medicare actually is.

We have some people who hate Medicare Advantage and who seem to be so deeply opposed to people having better benefits than fee-for-service Medicare that those people are willing to damage and even destroy Medicare Advantage to promote and protect those suboptimal benefits and care approaches and to damage plans and their care sites to keep the lower benefits in place.

Those critics are actual threats at some unexpected levels for our members and we need to keep those people from doing the huge damage to people and to plans that some clearly want to do and that they’re trying to do — for absolutely inexplicable reasons.

The people at CMS understand, appreciate and even love the special needs plans for what they do and the lead people at CMS manage the five-star program with increasing competency every year in continuously improving ways that is very good for the members. The CMS people aren’t the problem.

But the people with long political memories and fierce ideological zealotry who opposed Obama Care when it passed (because it had what they perceived to be ideological flaws about payment approaches instead of care delivery issues) have not gone away.

They’re still trying to create damage on political and economic levels to the plans and the have some audiences for their messages.

The 2023 trustee report showing that the plans actually have saved Medicare might have them defused a bit, but the most intense critics have not been swayed by either facts or compassion in the past and they probably won’t switch to those relevancy perspectives now.

So we need everyone else to hold the fort.


The future data flow will completely reinforce the direction we’re on now — but that might take a year for the next trustee report to give comfort to everyone, and there are people, and strangely malevolent and destructive people, who can and will destroy other people’s benefits if they’re allowed to influence that process in any way.

The 2024 Medicare trustee report will show that Medicare Advantage is using real dollars at an increasingly affordable level to take care of people and that the trust fund has been strengthened by holding its own at $400 billion for the fourth straight year.

If we do some other things right, we might have Medicare Parts A and B with slightly better risk levels and increasing support from the Accountable Care Organizations that are springing up in multiple settings to make care better for the people who enroll in them.

The cost savings for those accountable care organizations will be relatively small but very real and the care for those members will be infinitely better than the worst-case Medicare fee-for-service programs are creating in their worst settings today.

There’s a good chance that Medicare Parts A and B will be less of a loss than they would be without those people being given that care.

If we somehow got half of the current remaining fee-for-service enrollees into Accountable Care Organizations or the equivalent of improved care settings, we should be very happy for the significant good that will do to millions of people.

And if we doubled the number of enrollees in the special-needs plans, we could be extremely happy and proud with that outcome and people would have much better lives and we would save money at the same time.

Medicare should be a servant of America. That path of helping everyone on each of those trajectories would qualify for that designation of being a servant to the nation.

For now, we need to defuse the critics who hate better benefits for the members and keep them from damaging our lowest income and highest need members with lower benefits just because they hate those benefits so much, and because the Medicare Advantage critics still have influence over the process with a number of influential people.

It’s a bit like the people who believe the last election was stolen. We probably can’t get them to change their minds, because it’s a belief and a conviction rather than an intellectual construct or functional reality.

However, we can have other people looking at what actually happened for our elections. We need the people who know what is real to keep those people from damaging the election process with what they believe.

We’ll see if progress is being made if MedPac has even one mention of systematic and continuous care improvement, and use of diagnostic data to enhance care instead of increase coding levels is included in their next MedPac annual report.

It could happen.

But we don’t absolutely need it to happen, because Medicare has been saved. We didn’t need their help up to now to make that happen.

Enjoy the 2023 CMS directions for the plans for spending levels for the year. Note that they acknowledge in their report that they killed the old coding system that allowed upcoding to happen in the past.

Note how much Medicare Advantage will be raising costs per member for both 2023 and 2024.

That absolutely gets us to where we need to be for Medicare as a country, and as a trust fund that serves us all.

This report will need to be studied and appreciated after we do 3.30 percent increases for 2024 and create the context that those numbers support and enable.

These numbers anchor both where we were for 2022, and where we will be for 2023. They set us up for major success for 2024. This is a very good place to be and it's the right path to be on.

Medicare Advantage is pulling its own weight and we have the information to prove that is true.

Let’s protect and celebrate that trajectory for the country and the program, because it's setting us up for continuous improvement in some very important areas where we should be leading the world in the best and most affordable care if we stay on this path in intentional ways and make it happen.


We know from the annual CMS report, that totals up all health care costs for the country, that we’ve now crossed the $4 trillion cost level for care.

The total national health expense for last year was $4.3 trillion. It takes up 18.3 percent of our GDP.

That has happened because we buy almost all care in that $4 trillion cashflow completely by the piece, and because everyone who is a provider of care has a direct incentive for that care to happen, because it generates wealth and creates revenue for the caregiver.

That model too often financially rewards bad care because when care fails, then more care is often required and more care creates more payments, and that payment flow creates income and even wealth for the care givers.

The only part of our health care economy today that doesn’t have that financial reward system built in is our capitated care. When a $100,000 amputation is avoided and not needed because the care team put dry and clean socks on the patient, that doesn’t make the $4.3 trillion expense bigger. It shrinks it.

It’s the only way of buying care that shrinks the cost of care and rewards the care team when it happens.

We need to extend that payment model broadly to more people, and we need to do it now because $4 trillion needs something flowing in the opposite direction in the universe of care.

That’s why the Affordable Care Act very strategically and intentionally built capitation into Medicare Advantage as our Medicare purchasing tool.

It seems to be working.