Medicare Advantage Veteran Plans: Medicare Pays the Plan While the VA Provides Care

Medicare Advantage veteran plans receive monthly Medicare payments even when the Department of Veterans Affairs pays for an enrollee’s health care. For someone working on plan products, enrollment forecasts or care coordination, the question reaches straight into the business model. What did the plan promise to provide, how much care did it expect the VA to finance, and where did members actually receive their care?

Medicare buys coverage from private plans through a monthly payment called capitation. The Veterans Health Administration can also finance health care for a veteran enrolled in one of those plans. A VA-hosted policy brief from October 2025 describes the resulting concern: the plan receives full capitation while the VHA receives no payment for the Medicare-covered services it provides.

The brief comes from the Partnered Evidence-based Policy Resource Center. Its evaluators describe duplicative federal spending. We see a payment question that deserves an answer: how much of the care behind the plan’s revenue did another public program finance?

What the Numbers Show About VA Care Payments

Veterans can remain enrolled in Medicare Advantage while receiving their care through Veterans Affairs. The center’s brief reports that dual-system use grew by 63% between 2011 and 2020, accounting for an estimated $78 billion in VHA spending over that period.

One evaluation summarized in the brief examined plans with high veteran enrollment. In 2020, 21% of veterans in those plans used no Medicare-financed services, compared with 10% of veterans in other Medicare Advantage plans and under 4% of the general Medicare Advantage population. The Centers for Medicare & Medicaid Services still paid plans $1.3 billion for veteran non-users, with a portion going to the high-veteran plans. We call that a generous deal for the plan: Medicare pays for coverage, while the veterans’ health system pays for the care.

Those findings put a specific question inside the broader discussion of Medicare Advantage overpayments. Understanding the federal cost of a plan’s members’ care also means finding the care the VA financed. A low claims total can leave a great deal of publicly funded treatment outside the picture.

Veteran Plan Benefits Reveal the Enrollment Strategy

Veteran-oriented plans can attract people who already rely on VA services through the benefits they offer and the coverage they leave out. In a separate evaluation of benefit design in 2022, the center identified veteran plans through military-associated plan names and checked their marketing online. Nearly 60% of their enrollees were veterans also covered through the VHA.

The gap is clearest in prescription coverage. Among the veteran-oriented plans, 99% excluded Part D drug coverage, compared with 4% of other Medicare Advantage plans. Part B premium reductions appeared in 75% of veteran plans and 9% of other plans.

The evaluators suggested that this design could attract veterans who get prescriptions and other care through the VHA, making them financially attractive to the plan. The public package and the internal forecast therefore belong in the same conversation. If you worked on either, we want to understand what the company expected to spend on members and what it expected another government program to provide.

The brief also examined favorable selection in the broader population enrolled in both Medicare Advantage and the VHA. It found lower risk-adjusted costs than among veterans enrolled in traditional Medicare and the VHA. That finding adds another reason to look closely at a product’s enrollment assumptions: the expected cost depends on who joins as well as which system supplies the care.

Why the VA Payment Adjustment Misses the Individual Patient

The VA adjustment in Medicare’s rate method works at the county level. Comparing the payment with an individual veteran’s actual use of VA care requires a different set of records.

The Government Accountability Office’s April 2016 report explains why the adjustment exists. Medicare Advantage benchmarks depend in part on spending in traditional Medicare. When veterans in traditional Medicare get care from the VA, that Medicare spending can be lower, pulling down the benchmark used to pay private plans. GAO explained that the payment effect depends on how much VA care veterans in each Medicare program use.

In its 2027 Advance Notice, CMS described a VA and Department of Defense adjustment based on traditional Medicare data from 2019 through 2023. The American Institutes for Research’s 2026 report, Medicare Advantage Fraud, Waste, and Abuse Policy Options, identifies the unresolved comparison: the county adjustment does not account for actual VA service use by Medicare Advantage enrollees.

For a plan employee, the county-rate calculation and the member-utilization forecast answer different questions. We want to see whether the forecast anticipated substantial VA use and how that assumption shaped the product. The payment method alone cannot show where a member’s care went.

Split Records Can Hide Both Spending and Treatment

Care across systems can leave each provider with an incomplete medication history. A 2018 study in The American Journal of Managed Care, using VA and Medicare data from 2008 and 2009, found dual pharmacy use among 32.3% of Medicare Advantage veterans, compared with 7.0% of veterans in traditional Medicare. Its conclusion puts a clinical consequence beside the payment problem:

For an insider examining a promise of coordinated care, the comparison reaches beyond the sales brochure. We look at what the plan knew about VA treatment, what its encounter and pharmacy files could show, and whether its coordination work connected those records. The same cross-system visibility matters when comparing the care delivered with the care the plan expected to finance.

When a Plan Steers Veterans to VA-Funded Care

The American Institutes for Research identifies a potential abuse: a plan could selectively market to VA users and steer members toward VA-funded services to reduce its own costs. The plan keeps the Medicare payment while another public healthcare system carries the cost.

If you work inside a plan, vendor or Veterans Affairs, you may know who made those decisions and what they expected to save. We can work through that inside knowledge with you: the benefit promises, utilization assumptions and routing instructions that show how the business expected taxpayers to pay for care.

In examining possible Medicare Advantage fraud, we connect those decisions to what the organization represented and the government money involved. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

When You Know What the Plan Expected the VA to Pay

If you know how a veteran plan’s benefit promises compare with its forecasts or care-routing decisions, speak to one of our Whistleblower Experts about what the plan expected the VA to pay. We build your strongest Medicare Advantage whistleblower case from the product design, payment data and internal decisions, and bring in Medicare Advantage whistleblower lawyers who understand plan payment and marketing. You bring knowledge of the business, and we stay with you as your partners through the case.