Commonwealth Fund January 26, 2026
TOPLINES
Risk adjustment helps ensure that Medicare Advantage plans are not deterred from enrolling sicker people who need more medical care
Policymakers are exploring reforms to address shortcomings of risk adjustment that inflate payments to Medicare Advantage plans and potentially waste taxpayer dollars
Medicare beneficiaries can receive their benefits either through private plans, known as Medicare Advantage (MA) plans, or traditional Medicare. MA plans now cover more than half of all beneficiaries, and their growth has come with heightened scrutiny over the appropriateness of taxpayer-funded payments they receive from the federal government.
One aspect affecting payments to MA plans that has come under review is risk adjustment. Risk adjustment is a method to calculate payments based on patients’ expected health...
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