Medicare’s costs will jump by $7.43 billion next year – the equivalent of $149 for each of the nearly 50 million beneficiaries in the program – due to an unprecedented intervention last week by the Obama administration in the way privately run, for-profit Medicare Advantage (MA) plans, which are also known as Medicare HMOs, are paid by the government.

That’s according to a report from Physicians for a National Health Program (PNHP).

The traditional Medicare program allocates only one percent of total spending to overhead compared with six percent when the privatized portion of Medicare, known as Medicare Advantage, is included, according to a study in the June 2013 issue of the Journal of Health Politics, Policy and Law.

The one percent figure includes all types of non-medical spending by the Centers for Medicare and Medicaid Services plus other federal agencies, such as the IRS, that support the Medicare program, and is based on data contained in the latest report of the Medicare trustees.