Medicare Advantage vs Original Medicare: The 2026 Comparison

Published July 2026 · 16 min read

The Numbers at a Glance: 2026

The Enrollment Explosion

Medicare Advantage enrollment has grown explosively over the past two decades. In 2006, just 16% of Medicare beneficiaries chose MA plans. By 2020, it was 39%. In 2024, it crossed the 50% mark for the first time, and in 2026, 54% of all eligible beneficiaries are enrolled in MA.

The growth has been driven by aggressive marketing (Medicare Advantage plans spend over $3 billion annually on advertising), $0-premium plans that bundle dental, vision, and hearing coverage, and the appeal of a single plan replacing the complexity of Original Medicare + Medigap + Part D.

The Overpayment Problem

The Medicare Payment Advisory Commission (MedPAC) has repeatedly flagged that Medicare Advantage costs the government more per beneficiary than Original Medicare — despite MA plans' promise of efficiency through managed care.

The estimated overpayment is 6-8% above what the same beneficiaries would cost under fee-for-service Medicare. For 2024, MedPAC estimated the total overpayment at approximately $83 billion. The primary driver: risk adjustment coding practices.

Risk Adjustment and Upcoding

Medicare pays MA plans a risk-adjusted rate based on the health status of their enrollees — sicker patients generate higher payments. This creates a powerful financial incentive to document more diagnoses, a practice known as "upcoding."

MA plans employ armies of coders and conduct "health risk assessments" — in-home visits specifically designed to identify and document additional diagnoses. A beneficiary who sees three diagnoses recorded in fee-for-service Medicare might have eight or more diagnoses documented by their MA plan.

Our analysis of upcoding patterns is available in the Upcoding Analysis section.

Prior Authorization: The Hidden Cost

One of the most significant differences between MA and Original Medicare is prior authorization. MA plans frequently require pre-approval for services, tests, and specialist referrals. A 2024 HHS OIG report found that 13% of prior authorization denials by MA plans were for services that met Medicare coverage rules — meaning beneficiaries were wrongly denied care they were entitled to.

CMS has implemented new rules requiring MA plans to streamline prior authorization and publish denial rates, but patient advocates argue the reforms don't go far enough.

The Star Ratings System

CMS rates Medicare Advantage plans on a 1-5 star scale based on quality metrics, customer satisfaction, and administrative performance. Plans with 4+ stars receive bonus payments — creating a strong incentive to maintain high ratings. In 2026, 72% of MA enrollees are in plans rated 4 stars or above.

Critics argue the star rating system is gameable — plans can boost scores through targeted interventions on measured metrics while neglecting unmeasured aspects of care. The system also penalizes plans that serve disadvantaged populations, which tend to have lower patient satisfaction scores regardless of care quality.

Network Adequacy Concerns

MA plans restrict beneficiaries to in-network providers, but CMS's network adequacy standards have been criticized as too lenient. A 2025 GAO report found that 15% of MA plans had provider directories with significant inaccuracies — listing providers who had left the network, weren't accepting new patients, or were at incorrect addresses.

For beneficiaries in rural areas, network restrictions can be particularly problematic. If the nearest in-network specialist is 100+ miles away, the MA plan's lower premium is offset by travel costs and access delays.

The Transparency Problem

One underappreciated consequence of the shift to Medicare Advantage is reduced data transparency. CMS publishes detailed provider-level payment data for fee-for-service Medicare — the data that powers OpenMedicare. But MA plan payments to providers are proprietary and not publicly reported.

As MA enrollment grows, the universe of publicly transparent billing data shrinks. In 2026, only 46% of Medicare beneficiaries generate the public claims data that enables accountability, fraud detection, and spending analysis. This is a troubling trend for anyone who believes in healthcare transparency.

What Our Data Shows

OpenMedicare's provider payment data primarily covers fee-for-service (Original) Medicare, which means the $890 billion in payments we track represents only about 46% of Medicare beneficiaries. As MA enrollment grows, the universe of publicly transparent billing data shrinks — a troubling trend for accountability.

Our previous investigation covers the structural comparison: Medicare Advantage vs Traditional Medicare.

The Bottom Line

Medicare Advantage offers real benefits for many beneficiaries — lower out-of-pocket costs, additional benefits, and simplified enrollment. But the program costs taxpayers more per beneficiary than Original Medicare, is plagued by upcoding concerns, and reduces the transparency of healthcare spending data.

As the majority of Medicare beneficiaries now choose MA, the program's cost, quality, and accountability challenges will only grow more consequential. Whether MA represents a better model for Medicare or a more expensive one depends on whose perspective you take — and how you measure value.

The Dual Eligible Challenge

Approximately 12.5 million Americans are "dual eligibles" — enrolled in both Medicare and Medicaid. These beneficiaries tend to be sicker, lower-income, and harder to serve. Medicare Advantage plans have increasingly targeted this population through Dual-Eligible Special Needs Plans (D-SNPs), which now enroll over 5 million people.

The D-SNP market raises unique concerns: these plans receive higher risk-adjusted payments for their sicker populations, but some have been criticized for cherry-picking healthier dual eligibles while leaving the sickest patients in fee-for-service Medicare. CMS has tightened oversight of D-SNPs in 2026, requiring more detailed reporting on care quality and health outcomes.