A little Medicare Advantage history lesson… Medicare Advantage did not begin as Medicare Advantage. It began as Medicare+Choice, created under the Balanced Budget Act of 1997, which authorized private HMOs, PPOs, and other coordinated care plans to contract with Medicare and enroll beneficiaries in place of traditional fee for service coverage. The design rationale at the time was managed care efficiency. HMOs were already displacing fee for service in the commercial market, and lawmakers wanted Medicare to capture the same purported savings. Medicare+Choice underperformed almost immediately. Plan withdrawals were frequent through the late 1990s and early 2000s as insurers found payment rates too low relative to their costs, and enrollment stayed well under 20 percent of the Medicare population for most of that period. Congress rebuilt the program with the Medicare Modernization Act of 2003, renaming it Medicare Advantage and restructuring payment around competitive bidding, risk adjustment tied to diagnosis codes, and more generous benchmark payments designed to attract insurer participation. The 2003 law also introduced Medicare Part D alongside these changes, but the MA payment redesign is what set the trajectory the program is still on today. Benchmarks were explicitly set above fee for service spending in many counties to induce plans to enter the market, on the theory that competition would eventually bring costs down. It did not work that way. By 2009, MedPAC found Medicare Advantage payments already running roughly 14 percent above what the same beneficiaries would have cost in traditional Medicare, driven substantially by diagnosis coding that made enrollees look sicker on paper than they were in practice. That payment gap and its primary cause, identified within six years of the 2003 redesign, is functionally the same gap and cause CBO and MedPAC are still measuring today. The structural problem was present at the onset, not something the program drifted into later. At the end of the day, Congress built a payment structure with the overpayment mechanism embedded in its design, and insurers happily took advantage. Their advantage has led to substantial market consolidation for physicians, insurers, and hospitals in response to market forces. Congressional inaction has contributed significantly to the exponential rise in the cost of healthcare today.