Medicare Advantage Payments Set to Rise 5.06% for 2026

Medicare Advantage payments are projected to rise by 5.06% for the calendar year 2026, as revealed in the recent Rate Announcement from CMS. The increase will allocate about $25 billion more from the federal government to Medicare Advantage plans, with an emphasis on safeguarding against fraud, waste, and abuse. The growth rate has been adjusted based on new fee-for-service expenditure data, resulting in a higher effective growth rate than earlier estimates.

The CY 2026 Rate Announcement also finalizes changes to the Medicare Advantage risk adjustment model, aiming to enhance the representation of Medicare beneficiaries' acuity. This model overhaul will affect the number of diagnosis codes and category weights, amidst criticism from payers regarding the adjustments. Organizations like America’s Health Insurance Plans (AHIP) and Better Medicare Alliance have commented on the implications, highlighting the importance of Medicare Advantage for millions of beneficiaries.

In conjunction with the Rate Announcement, CMS introduced a new out-of-pocket threshold for the Part D Redesign Program, which is set at $2,100 annually. The announcement also saw the rejection of a previous policy intending to include anti-obesity drug coverage in Medicare and Medicaid.

As the healthcare landscape continues to evolve, the support for Medicare Advantage remains crucial, and stakeholders are focusing on improving care for seniors, especially in light of recent policy changes.