Put Patients First and Fix Medicare Advantage

Medicare Advantage (MA)—a popular system of competitive private health plans—can be greatly improved. Congress can do so by expanding benefit options for patients and enhancing the quality of patient care. Working closely with the White House and foregoing partisan bickering, bipartisan cooperation can make that happen.

Most Medicare patients are enrolled in MA for obvious reasons: it is convenient; patients pay only one premium for comprehensive coverage, including drug benefits; and there is a hard cap on their out-of-pocket costs.

But the program, though popular, is far from perfect; but it is marred by flaws that are easily fixable. At the Heritage Foundation, we have identified 14 specific policy changes that could greatly improve the program. Working closely with the White House, there is no reason why Congress cannot remedy MA’s problems, many of which are amenable to bipartisan solutions. For example:

Broaden Benefit Options. There are gaps in MA coverage that make no sense. For example, the program includes a small number of Medical Savings Account (MSA) plans, a close equivalent to health savings account plans in the private sector.

The plans deposit funds into a beneficiary’s account, and beneficiaries draw upon this account to meet their medical expenses. The problem: they cannot offer prescription drug coverage like all other MA plans, forcing Medicare patients to enroll in a separate Medicare Part D drug plan and pay an additional premium. Beyond being anti-competitive, such a restriction is just silly.

Likewise, under current law, beneficiaries in MA patients needing end of life care can only get hospice coverage under the traditional Medicare program. MA insurers, who have excelled at case management and coordinated care, today often provide palliative care for patients with serious illnesses that require extended recovery, but not hospice care. This makes no sense.

Congress should not impose a hospice benefit mandate, of course; but if health plans wish to extend palliative care—which many offer today—into hospice coverage for the full continuum of patient care, they should be allowed to do so. And MA patients should be permitted to take advantage of this option in their chosen plans.  

Fix Prior Authorization. In traditional Medicare, there is virtually no prior authorization, the equivalent of an insurer’s permission slip, to provide medical services. Instead, doctors are simply reimbursed on a fee-for-service (FFS) schedule for providing a covered service.

Medicare doctors, laboring under a flawed administrative payment system, thus have a strong incentive to increase their revenues by jacking up their service volume, but volume increases do not necessarily translate into value for Medicare patients. Not surprisingly, overpayments, inappropriate, unnecessary, or “improper” payments are a big problem in Medicare FFS. The Centers for Medicare and Medicaid Services, reported “improper” FFS payments totaling $31. 7 billion. in Fiscal Year 2024 alone.

With MA, the problem is the reverse.

Virtually all MA plans require prior authorization for medical treatments or procedures, though this varies widely among health plans. Using 2023 data, Kaiser Family Foundation analysts found that the plans made almost 50 million such determinations.

Interestingly, more than nine out of 10 were positive, and only 6.4 percent of the providers’ requests were either “fully or partially” denied by the plans. Even more interesting, more than 8 out of 10 denials were “partially or fully” overturned on appeal.

Nonetheless, as the Kaiser analysts observed: “These requests represent medical care that was ordered by a health care provider and ultimately deemed necessary but was potentially delayed because of the additional step of appealing the initial prior authorization decision. Such delays may have negative effects on a person’s health.”

For doctors and their patients, the prior authorization process itself is often profoundly frustrating, aggravated by outdated paperwork and fax communications, that contribute to care and payment delays. 

The good news is that there is a strong bipartisan consensus that this problem can and should be fixed—permanently. In June 2025, Health and Human Services Secretary Robert F. Kennedy Jr. and Dr. Mehmet Oz, the Centers for Medicare and Medicaid Services administrator, secured a breakthrough agreement with major MA insurers.

The insurers pledged to standardize electronic submissions and provide “real time” decisions, reduce the number of prior authorization requests, and ensure medical professional review any clinical denials. [1]

Kennedy’s efforts should be given time to work. But if they do not, Congress can enact a bipartisan remedy. Sen. Roger Marshall, R-Tenn., is sponsoring the “Improving Seniors’ Timely Access to Care Act (S.1816) that would require an expedited process of electronic prior authorization, rapid determinations, and full transparency of MA plan justifications for their decisions. Rep. Ami Bera, D-Calif., is sponsoring a companion bill in the House of Representatives.

Create a Direct Primary Care Option in MA and Traditional Medicare. More and more patients are joining popular Direct Primary Care (DPC) programs in the private sector. In a DPC arrangement, the patient pays a monthly or quarterly “subscription” fee for the physician’s primary care services, such as annual wellness exams, immunizations, same day appointments, routine office visits and standard lab work. With the 2025 enactment of the “One Big Beautiful Bill,” Congress allows people to use health savings account funds to pay for DPC subscription fees.

Congress should take the next step: allow DPC arrangements in Medicare Advantage and traditional Medicare. Unlike current law, Congress should allow MA plans to be able to prepay a DPC membership fee on behalf of their enrollees.

Moreover, MA plans should also be able to set aside funds in a patient-controlled account to pay for primary care services. In this arrangement, patients would directly control the dollars and engage directly with their primary care doctors in the provision of their care.

Such a revitalized doctor-patient relationship would also likely foster innovation in care delivery. This arrangement is likely to lead to superior medical outcomes for seniors, especially because they require practitioners skilled at providing services for more complex medical conditions that accompany aging.

In the case of Medicare FFS, burdened by an inflexible and flawed administrative payment system plus bizarre statutory and regulatory obstacles to private contracting, the creation of a new DPC alternative would provide doctors and patients with a fresh alternative to the existing system.

Direct payment for services out of an account would be more economically efficient, reduce administrative costs and claims processing, and reduce the incidence of fraud that today plagues Medicare, as well as Medicaid. It would enhance the doctor-patient relationship, where the patients control the flow of dollars and the doctors control the delivery of medical care.

Medicare Advantage has been generally successful, but it is burdened by a few fixable flaws.

While the biggest and most costly problems are in its payment systems, there are gaps in MA benefits and care delivery options. These can be closed easily enough if Democrats and Republicans put aside their differences and work together.

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