Does Medicare Advantage cost more than traditional Medicare?

The federal Medicare program spends more per beneficiary for a person on Medicare Advantage than if the person were on traditional Medicare.

The difference is projected at 20% higher, or $84 billion, in 2025, compared with 22% and $83 billion in 2024, according to the Medicare Payment Advisory Commission.

The independent congressional agency says a key reason is Medicare Advantage uses a fixed monthly payment per beneficiary, rather than fee-for-service. 

Medicare is federal health insurance mainly for people age 65 and over. Medicare Advantage is a private alternative paid for by Medicare. Advantage enrollees can get more benefits, but are restricted on providers they can see.

Advantage enrollment has been increasing, but some enrollees find it difficult to switch to traditional Medicare when they get older and sicker.

Democratic U.S. Rep. Mark Pocan, who represents the Madison area, claimed in April that Medicare Advantage was created to save money but costs more than Medicare.