Medicare Advantage Organizations: Actual Expenses and Profits Compared to Projections for 2006

House Ways and Means Health Subcommittee Chairman Pete Stark (D-CA) today released a report by the Government Accountability Office (GAO) showing that private Medicare Advantage (MA) plans spent less on health care services than they projected in 2006. As a result, private plans pocketed an extra $1.33 billion in profits – 65 percent more than estimated in their 2006 bids. This is the second year in a row that MA organization profits exceeded their own projections. A June GAO report showed that in 2005, MA plans earned an extra $1.14 billion in profit.