Medicare Advantage was first introduced as a way to save money on healthcare by letting private insurance companies manage benefits for people who joined. It was supposed to cut down the cost burden on Medicare itself. Over the years, though, the list of extra benefits offered by these plans has grown in unexpected and even surprising ways.
Now, some plans are even covering golf fees, ski passes, pet food, and social club memberships — all under the idea that these help improve health. But while these benefits may look exciting, experts warn they may be pushing the program in the opposite direction of what it was created for.
What Is Medicare Advantage?
Medicare Advantage (MA) is a private version of the original Medicare program in the United States. Instead of the government paying for your care directly, private insurers handle your health coverage. This setup is meant to save taxpayer money and offer more flexible health plans.
At first, Medicare Advantage only offered basic health services, including dental and vision. However, starting in 2018, changes allowed insurance providers to add extra benefits if they could be linked to improving a person’s health — even if indirectly.
New Types of Supplemental Benefits
The meaning of “health benefits” has now become much broader. According to reports, some supplemental benefits now include:
- Golf course fees and ski passes
- Hunting licenses and club entry fees
- Pet food and pet supplies
As long as these benefits are believed to support a person’s mental or physical well-being, insurance companies can now include them.
Why the Cost Is Rising
While these perks sound great, there’s a catch. The cost of providing these extra benefits is starting to go back to the customers. Since many people on Medicare Advantage have chronic illnesses, more money is being spent on care.
At the same time, a growing number of younger and healthier people have joined the program. The Medicare Payment Advisory Commission (MedPAC) has raised concerns that too much is being paid for people who don’t need much care, and too little for those who need more.
This imbalance is pushing up the cost of Medicare Advantage plans for everyone — including older people who often need it the most.
From Savings to Overspending
From 2015 to 2024, the cost of Medicare Advantage plans rose from 112% to 120% of what the government expected to spend. This means the system is now spending more than planned.
One report even showed that overpayments to insurance companies went up from $18 billion to $77 billion per year. These rising costs are now being passed on to the users, making the plans more expensive overall.
Expert Opinion
Chris Pope, a senior fellow at the Manhattan Institute, explained the issue in simple terms.
He said, “Medicare Advantage was meant to save money, but now it’s costing taxpayers more, with an extra $1 trillion expected to be spent in the next ten years.”
Medicare Advantage started as a smart way to reduce healthcare costs by involving private insurance. While the added benefits like pet food and golf passes may seem helpful or fun, they come at a price. The system is now overspending, and the burden is slowly being placed on the people it was meant to help. What was once a cost-saving solution has now become an expensive plan that may need serious changes in the near future.