Medicare Advantage overpayments: $76 billion this year, $1.2 trillion over the next decade
Summary
MedPAC estimates the federal government will overpay Medicare Advantage plans by $76 billion in 2026 alone — and $1.2 trillion over the next decade if nothing changes. In May 2025, CMS responded by expanding its fraud audits from 60 health plans to more than 550, growing its review staff from 40 to 2,000.
Follow the overpayment
The Medicare Payment Advisory Commission (MedPAC), Congress's own advisory body on Medicare, estimates what the government pays Medicare Advantage plans against what it would have cost to cover the same beneficiaries in traditional Medicare. The gap has stayed enormous even as the tools meant to shrink it have started to work.
View data as table
| 2026 (single year) | $76B | MedPAC estimate |
|---|---|---|
| Projected, through 2035 | $1.2T | cumulative, if trend continues |
For 2026, MedPAC estimates the program will be overpaid by $76 billion — down from $84 billion in 2025, as a new risk-adjustment formula ('s "V28" model, now fully phased in) narrows how much plans can gain by documenting patients as sicker than they are. Left uncorrected at even today's reduced rate, MedPAC projects the overpayment would total $1.2 trillion through 2035 — roughly 14% of everything the program is projected to spend. Of the 2026 figure, "upcoding" specifically — billing codes that inflate a patient's documented risk — accounts for about $22 billion, down from a 10% share of spending in both 2022 and 2025 to 4% this year, entirely because of the V28 phase-in.
The same system, counted in auditors
A projection is only as good as somebody's willingness to check it against reality. For most of the program's history, that checking was thin. In May 2025, decided it wasn't thin enough to leave alone.
View data as table
| Before (through April 2025) | 40 | coding/review staff |
|---|---|---|
| After May 2025 expansion | 2,000 | coding/review staff |
Before May 2025, employed about 40 people reviewing Medicare Advantage risk-adjustment records, auditing roughly 60 of the program's health plans, and pulling about 35 patient records per plan. After the announcement, committed to auditing every eligible Medicare Advantage contract — more than 550 of them — for payment years 2018 through 2024, with sample sizes up to 200 records per plan per year and a review staff that grew fiftyfold, to 2,000. says it intends to finish auditing that entire backlog by early 2026. The scale of what's being reviewed is large by any measure: Medicare Advantage covered more than 33.1 million beneficiaries in 2024 and the program paid plans over $453 billion in 2023.
The takeaway
- The fix is already working, on paper. A new risk-adjustment model cut MedPAC's overpayment estimate from $84 billion to $76 billion in a single year and cut the upcoding-specific share from 10% to 4% — real progress, still leaving tens of billions on the table.
- Enforcement went from a spot-check to a full audit. didn't tighten its Medicare Advantage reviews incrementally — it went from 60 plans and 40 reviewers to every eligible contract and 2,000 reviewers, a fundamentally different scale of scrutiny.
- A trillion-dollar decade is still the baseline case. Even after the reforms credited with narrowing the 2026 gap, MedPAC's own arithmetic says the program is on pace for $1.2 trillion in cumulative overpayments if nothing further changes.
Overpayment figures are MedPAC's own estimates and are subject to revision as newer claims and risk-adjustment data become available. audit-scale figures reflect the program announced in May 2025 and may change as audits for payment years 2018-2024 are completed.
Sources
- Center for Medicare Advocacy — MedPAC's $76 billion 2026 Medicare Advantage overpayment estimate, down from $84 billion in 2025. medicareadvocacy.org
- Committee for a Responsible Federal Budget — the $1.2 trillion 10-year (through 2035) cumulative overpayment projection. crfb.org
- Healthcare Dive — MedPAC's $76 billion figure and context on the V28 risk-adjustment model's phase-in. healthcaredive.com
- USC Schaeffer Center — analysis of upcoding's declining share of overpayments (10% to 4%) as the V28 model phased in. schaeffer.usc.edu
- Healthcare Dive — 's May 2025 RADV audit expansion: scope, reviewer count, and sample-size changes. healthcaredive.com
- Committee for a Responsible Federal Budget — 's commitment to complete PY2018-2024 audits by early 2026. crfb.org
Comments
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Medicare Advantage plans get paid more when they document their members as sicker. That single mechanic — called risk adjustment — is meant to compensate plans fairly for covering people with real health needs. It's also the reason the program has spent years costing the government more than the same people would cost in traditional Medicare.