U.S. regulators restrict Medicare Advantage extra benefits

The Centers for Medicare & Medicaid Services (CMS) is tightening regulations on Medicare Advantage, a private insurance modality used by approximately 35.5 million Americans. The federal government has rejected requests from insurers to expand extra benefits to include items such as medicinal marijuana, streaming service subscriptions like Netflix, and memberships to wholesale clubs like Costco.

CMS Administrator Mehmet Oz criticized the use of taxpayer-subsidized funds for non-medical items, specifically mentioning leisure equipment like kayaks. While defenders of these benefits argue they encourage healthy and active lifestyles, regulators are pushing back to ensure funds prioritize medications and lower premiums for seniors.

The regulatory shift comes as the sector prepares to receive nearly $615 billion from the U.S. government this year, which is $76 billion more than the estimated cost of traditional Medicare for the same population. New rules will also require plans to clearly disclose eligibility criteria for benefits intended for patients with chronic illnesses.