Send us Fan Mail

How the Medicare Modernization Act Fueled Medicare Advantage Overpayments and Rebates

Mike Roth and Bill Kadereit discuss how the 2003 Medicare Modernization Act (MMA), following the failure of Medicare Choice, rebranded the program as Medicare Advantage and used risk adjustments and subsidies that raised MA payments above traditional fee-for-service, averaging about 14% higher from 2005–2009. They cite Inspector General reports in 2008–2009 criticizing excessive and improper payments, which they say were later recast as “rebates” under the 2010 Affordable Care Act, driving overpayments to roughly 16–17% and persisting through projected 2025 levels. They report MA enrollment growth (11.7M to 17.5M from 2010–2015; 34.4M and 55% market share by 2025) and rebate totals (about $89B in 2025, projected over $94B), arguing rebates subsidize extra benefits and insurer overhead/profit while traditional Medicare enrollees receive none, and urging policymakers to end rebates while protecting current beneficiaries.

Chapters
00:00 Podcast Introduction
00:57 MMA And Medicare Advantage
03:37 Risk Adjustment Explained
05:18 Overpayments And Rebates
07:18 Charts Show Rising Costs
09:31 Enrollment Growth And Market Share
10:39 Rebates Fund Extra Perks
12:43 Trillion Dollar Forecast
14:51 Fairness And Reform Ideas
15:59 Next Episode Preview

Send us Fan Mail

History of Medicare (1965–2003), Part 1: Fee-for-Service, Managed Care, and the Road to Medicare Advantage

Mike Roth and Bill Kadareit introduce the first of three episodes on Medicare’s history from 1965 to 2003, aiming to highlight key turning points behind Medicare’s financial strain and possible solutions. Bill credits research support from the American Retiree Education Foundation and the National Retiree Legislative Network, asks listeners to donate, and explains demographic shifts: slower population growth, more beneficiaries living past 80, and a small share of older enrollees consuming most Medicare payments, with all baby boomers expected to be on Medicare by 2027. He argues Medicare and Social Security reserves are evaporating due to insufficient funding, rising average age, lack of productivity gains, and congressional interest in privatization. The episode contrasts Medicare’s traditional fee-for-service model and low overhead with insurers’ capitation/managed-care approach, then reviews policy milestones including the 1972 HMO amendment, TEFRA (1982), the Balanced Budget Act and Medicare Part C (1997), and sets up deeper discussion of changes after 2003.

00:00 Welcome and Topic
00:35 Series Roadmap
01:11 Support the Foundation
02:54 Demographics Driving Costs
04:51 Funding Risks and Politics
06:37 Medicare Fee for Service Basics
10:55 Why Insurers Want Control
11:34 1972 Shift to Managed Care
12:43 Capitation Explained Simply
14:15 1972 to 2003 Policy Timeline
19:48 Medicare Advantage Teaser
21:20 Wrap Up and Next Episode

Send us Fan Mail

Medicare Prescription Drug Costs: Part D, Advantage Plan Squeezes, and Canada Importation

Mike Roth and Bill Kadereit discuss how retirees on Original Medicare buy standalone Part D plans from private insurers and how rising prescription costs have driven a 2026 “plan squeeze,” with 2.6 million Medicare Advantage plans discontinued and only 360 plans nationwide (down 29% from 2025). They cite premium shocks (e.g., Cigna rising from $37 to $91) and an IBM retiree example where a bundled plan was replaced by a separate $160 drug premium. They review Inflation Reduction Act provisions including a $2,100 Part D out-of-pocket cap, limited Medicare drug price negotiations (10 drugs, with 15 more for 2027), and a $35/month insulin cap. They note FDA enforcement discretion allowing personal importation from Canada up to 90 days, plus Florida’s 2024 authorization, and highlight pending bills such as S 641 and the Stop Stalling Act, while pointing to NRLN resources and upcoming episodes on enrollment and “guarantee issue” rights after plan terminations.

00:00 Prescription Costs Overview
01:05 Part D Plans and 2026 Squeeze
02:33 Premium Shock Stories
03:37 IRA Cap and Negotiations
04:30 Buying Drugs in Canada
06:44 Most Favored Nation Pricing
08:04 Rebates and Middlemen
09:35 Discount Cards and Import Rules
11:45 Drug Price Hikes and Bills
16:11 NLRN Resources and Action Alerts
17:08 Next Episode Enrollment Rights
20:24 Wrap Up and Where to Listen