The Centers for Medicare & Medicaid Services (CMS) has proposed a 2.2% rise to MA benchmark payments for 2026.
This rate increase reverses the nearly 0.2% decline seen a year ago, reported Reuters.
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On average, the payments would rise by more than $21bn, or 4.33%.
MA plans are Medicare-approved alternatives to Original Medicare offered by private insurers.
This payment rate is a crucial factor influencing insurers’ monthly premiums, benefits offered and profitability margins.
The payment rate adjustment is a key consideration for companies such as UnitedHealth, Humana, Elevance and CVS’ Aetna as they prepare bids for MA plan contracts they intend to sell in 2026.
This proposed increase is part of CMS’ ongoing efforts to implement improvements to the MA risk adjustment model and the calculation of growth rates, including factors related to medical education costs.
In 2023, CMS announced a three-year phase-in plan for these improvements, aiming to provide a smooth transition and predictability for plans and providers.
Over the next decade, the US Government is projected to spend $9.2trn on MA payments, with $1.3tn allocated for MA rebates.
MA offerings including premiums, supplemental benefits and coverage options for individuals with Medicare have remained stable for 2025.
Moreover, MA rebates have been consistent, averaging more than $2,400 annually per person, indicating that the payment rates have been sufficient during the phase-in period.
The proposed rates are currently open for public commentary, with insurers and other stakeholders invited to provide feedback by 10 February.
The final rate announcement is scheduled to be released on or before 7 April 2025, following the review of the feedback.
CMS Administrator Chiquita Brooks-LaSure said: “CMS has worked to ensure that people with Medicare Advantage and Medicare Part D have access to stable and affordable offerings. Today’s Advance Notice continues CMS’ efforts to provide access to affordable, high-quality care in Medicare Advantage while being a good steward of taxpayer dollars.”
