What does this research mean for the field?

Medicare Advantage plans systematically underestimate actual patient risk in their bids, generating billions in additional revenue for insurers, with the magnitude of underestimation increasing with plan size. Novelty: ClaimNovelty.INCREMENTAL. Consensus alignment: ConsensusAlignment.NEUTRAL.

What question did this study set out to answer?

To quantify the extent to which Medicare Advantage plans underestimate enrollee risk and calculate the additional Part A and Part B revenue insurers gain as a result.

August 27, 2026Health Services Research

Medicare Advantage Plan Bid Risk Underestimates and Corresponding Insurer Revenues

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Authors

DSDavid Scheinker KSKevin A. Schulman BRBarak D. Richman

Discussion

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Overview

Observational study reveals systematic risk underestimation in Medicare Advantage plan bids, indicating insurers gained billions in surplus revenue.

Key Points

To quantify the extent to which Medicare Advantage plans underestimate enrollee risk and calculate the additional Part A and Part B revenue insurers gain as a result.
Analyzed 34,604 Medicare Advantage plans across 317 insurers from 2008 to 2020 using CMS bid, enrollment, and payment datasets.
Compared projected risk scores submitted in annual plan bids to actual plan-level risk scores subsequently calculated by CMS.
The overall mean ratio of actual to projected risk was 1.01 (95% CI, 1.009–1.011), resulting in $14.6 billion in additional Part A and Part B revenue for insurers.
The proportion of plans underestimating risk (ratio > 1.0) increased with plan size, rising from 45% in the smallest enrollment quintile to 62% in the largest quintile.
Among the 10 largest insurers, Blue Cross Blue Shield Highmark underestimated risk by an average of 3.0% ($272 per member per year), followed by Centene at 2.1% ($202 per member per year).

Cite This Study

Scheinker et al. (2026) studied this question.

synapsesocial.com/papers/6a8fea0110c91c1e92622015 https://doi.org/10.1111/1475-6773.70158

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August 27, 2026Health Services Research

Medicare Advantage Plan Bid Risk Underestimates and Corresponding Insurer Revenues

View Full Paper

Ask AI

Bookmark

Authors

DSDavid Scheinker KSKevin A. Schulman BRBarak D. Richman

Discussion

Member takes

Overview

Observational study reveals systematic risk underestimation in Medicare Advantage plan bids, indicating insurers gained billions in surplus revenue.

Key Points

To quantify the extent to which Medicare Advantage plans underestimate enrollee risk and calculate the additional Part A and Part B revenue insurers gain as a result.
Analyzed 34,604 Medicare Advantage plans across 317 insurers from 2008 to 2020 using CMS bid, enrollment, and payment datasets.
Compared projected risk scores submitted in annual plan bids to actual plan-level risk scores subsequently calculated by CMS.
The overall mean ratio of actual to projected risk was 1.01 (95% CI, 1.009–1.011), resulting in $14.6 billion in additional Part A and Part B revenue for insurers.
The proportion of plans underestimating risk (ratio > 1.0) increased with plan size, rising from 45% in the smallest enrollment quintile to 62% in the largest quintile.
Among the 10 largest insurers, Blue Cross Blue Shield Highmark underestimated risk by an average of 3.0% ($272 per member per year), followed by Centene at 2.1% ($202 per member per year).

Cite This Study

Scheinker et al. (2026) studied this question.

synapsesocial.com/papers/6a8fea0110c91c1e92622015 https://doi.org/10.1111/1475-6773.70158

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