Medicare and Medicaid Service Center recently announced that payments from the government to the Medicare Advantage program will grow by 5.06%, or $25 billion, from 2025 to 2026, which pleases many payer advocates.
This is a significant difference from the 2.23% increase proposed by Biden Administration in January. The growth is mainly due to an increase in the effective growth rate, i.e. 9.04%, while the estimated value in advance notice is 5.93%.
“Every year, the CMS updates growth rates based on the available historical program experience and projected trend assumptions,” the agency said in the fact sheet. “As the CMS incorporates updated data and assumptions, the growth rate changes between the proposed and the final. This year, the change in growth rates from advance notice to exchange rate announcements is mainly attributed to additional additional [Medicare Fee-for-Service] Payment data, including through the fourth quarter of 2024. ”
Better Medicare Alliance, an advocacy group for Medicare Advantage to support payment rates, says it will provide some relief after a series of cuts.
“Cutting down two years of Medicare benefits, this payment rate will provide stability to millions of beneficiaries, who said in a statement. “Today, more than half of Medicare beneficiaries choose Medicare benefits for better care and better health.” Protecting the program has never been more important. We look forward to continuing to work with the Trump administration, CMS administrator Oz and Congress to promote policies that enhance health insurance benefits for older people and taxpayers. ”
The Alliance for Community Health Programs (ACHP), which represents local and nonprofit health programs, also praised the tax rate notice, as well as the three-year phase of the CMS’ decision to complete the updated MA risk adjustment model, which is how CMS pays for the MA plan more accurately based on the health and illness of healthy and sick members.
“The Alliance of Community Health Programs commended the Trump administration for finalizing policy in the 2026 Medicare Advantage and Part D fee notice, which reflects the high cost of care delivery and takes a step towards positive risk adjustment to promote competition,” Ceci Connolly, president and CEO of ACHP, said in a statement. “ACHP has long supported the new MA risk adjustment model and is pleased that CMS finally completes the transition. Seniors deserve affordable evidence-based care with doctors focused on providing care, rather than digging out diagnostics.”
However, not everyone is excited about this increase in payments from the Medicare Advantage program. This includes the American Medical Association, which strives to stop doctors’ Medicare payments this year by 2.8%. Congress failed to stop the cut.
“Increasing salary increases to insurers enjoy record profits while cutting salary for physicians working to maintain our practices shows that this shows an inconsistent priority. Physicians are the foundation of health care. Doctors suffer no matter what health insurance companies,” AMA Bruce Bruce A. Scott A. Scott A. Scott, announced that AMA Bruce A. Scott, has been announced in the AMA Bruce A. Scott, A.
The organization, as well as the Medicare Payment Advisory Committee, also called on Congress to update the Medicare payments practiced by healthcare institutions with the increase in the cost of providing care.
The payment rate comes after the Senate confirmed Dr. Mehmet Oz as CMS administrator last week. Oz, who was a leading advocate of the Medicare Advantage program in the past, has been under scrutiny by some Democrats who questioned whether he could effectively regulate the MA program, which faces criticism for overpaying payments and inappropriate use of previous authorizations.
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