• Experts are calling for tighter scrutiny of Medicare Advantage’s $86 billion in supplemental benefits, citing low usage, weak oversight, and taxpayer waste. Congressional watchdogs say the program’s perks often boost insurer profits rather than improve patient care or outcomes.

WASHINGTON, DC (TDR) — As lawmakers weigh competing strategies to restrain federal spending, a growing number of experts and watchdogs are urging Congress to scrutinize the ballooning costs and unchecked perks embedded in the Medicare Advantage program. At the center of concern: an estimated $86 billion in supplemental benefit rebates that remain largely untracked, unverified, and potentially misused.

Billions Spent, Few Results

Medicare Advantage plans receive federal rebate dollars to offer services not covered by traditional Medicare — including dental, vision, hearing, and over-the-counter drugs. But according to a 2024 study by JAMA Network Open, only $3.9 billion of those funds went toward those core benefits.

“This is a recipe for ghost benefits that look good on paper but can’t be accessed due to red tape and high out-of-pocket costs,” said Mark Merritt, a health policy expert.

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Insurers also spent an estimated $16 billion on promotional “Flex Cards” — prepaid cards often advertised as $1,000 perks for new enrollees. While marketed as a healthcare benefit, the cards are frequently used for groceries, utilities, or cable TV, raising questions about their medical value.

Little Oversight, Big Payouts

The Centers for Medicare & Medicaid Services (CMS) currently requires plans to estimate how they will use rebate dollars but does not verify how they are actually spent. Plans are also not obligated to report actual spending on medical versus promotional or administrative uses.

The Medicare Payment Advisory Commission (MedPAC) flagged this as a transparency failure in its June 2025 report, questioning whether these benefits improve care or merely serve to inflate insurer margins.

“There is a fundamental lack of transparency,” the report noted, “around how these dollars are used.”

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From 2018 to 2021, a Wall Street Journal investigation found that over $50 billion in payments were based on diagnoses submitted by insurers themselves — not by physicians — contributing to questionable risk-adjusted payments.

A Fiscal Reckoning Ahead?

Medicare Advantage plans are required to spend at least 85% of revenues on care or quality improvements. Yet the $86 billion in supplemental perks count toward that ratio — even when spent on AI-based denials, prior authorizations, or administrative tools that restrict access to care.

Congress recently cut $9 billion from unrelated programs through a rescission bill. Medicare Advantage’s unverified perks alone total nearly 10 times that amount.

Will Congress finally hold insurers accountable — or keep rewarding profit under the guise of patient care?

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