The Centers for Medicare and Medicaid Services just announced the final rule regarding Medicare Advantage payments in 2026. Notwithstanding $83 billion in overpayments to MA insurers last year and this year as well, the Trump Administration opted to increase insurer payments by $25+ billion in 2026.
The payment increase of 5.06 percent is more than double the proposed increase of 2.23 percent in the Biden administration’s Advance Notice for MA payments in 2026. To be clear, increases in payments to Medicare Advantage insurers end up largely in the form of profits for the insurers, but they also allow the insurers to market “additional benefits” to people with Medicare.
Beware: If you are enrolled in a Medicare Advantage plan and you are diagnosed with a complex and costly condition, you might not be able to see the specialists you want to see or use the hospitals you want to use. Moreover, you may face inappropriate delays and denials of care. If you want easy access to care, you should enroll in traditional Medicare.
The serious problem with any payment increase is that the Medicare Advantage insurers are expected to be overpaid more than $1 trillion in the next 10 years. The result is that people with Medicare will be forced to pay $220 billion more in Medicare premiums over the next ten years. Medicare premiums are calculated based on program costs.
What’s equally concerning is that the Medicare Trust Fund is projected to lose $550 billion over the next ten years as a result of government overpayments to insurers.
The Centers for Medicare and Medicaid Services claims that the additional boost to MA insurers stems from higher costs in the last quarter of 2024.
On a happier note, CMS is finalizing the third and last year of the proposed change to the Medicare Advantage “risk-adjustment model” for paying insurers that the Biden administration launched in 2024. The changes are intended to eliminate some of the gaming that insurers engage in to collect more from the government for their services than appropriate.
Here’s more from Just Care:
- 2025: Government finalizes new Medicare Advantage policies
- Medicare Advantage costs and prior authorization rules impede access to care
- Republicans look to end Medicare Advantage overpayments
- Congressional Budget Office finds $1 trillion in Medicare Advantage overpayments
- Medicare Advantage inappropriate denials of care abound
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