In 2003, Congress raised rates to encourage private HMOs to jump into the Medicare program. The idea was that even at higher than they'd budgeted for fee-for-service rates, private HMOs would increase efficiency and lower costs over the long term. Well, a few years later, the evidence suggests otherwise. The move is costing taxpayers $5.2 billion per year, or 12.4 percent more than FFS Medicare, according to a study by the Commonwealth Fund. Right now, the feds pay managed care plans about $800 per beneficiary each month. Patients with FFS Medicare spend $922 less per year, researchers found.