CMS Raises FY 27 Medicare Advantage Payment Rates 5%

Senators Elizabeth 'Pocahontas' Warren, 'Da Nang Dick' Blumenthal, Champagne Socialist 'Crazy Bernie' Sanders, and five other Blue State Democratic Senators are demanding that CMS stop enrolling seniors in the hugely popular Medicare Advantage plans.

Medicare Advantage was established as part of the Balanced Budget Act of 1997 passed by the 105th United States Congress and signed into law by then President Clinton.  It was originally named Medicare+Choice, and was renamed Medicare Advantage in 2003.  There are approximately 1,000 Medicare Advantage plans which enrolled 37 million people in 2025; about half of all Medicare recipients:

https://rollcall.com/2026/04/02/senate-democrats-call-on-cms-to-rein-in-medicare-advantage-abuses/

Senate Democrats call on CMS to rein in Medicare Advantage abuses
Senators urge CMS to shore up the program, rather than enroll more individuals in it
By Ariel Cohen - April 2, 2026

A group of Democratic senators led by Elizabeth Warren is pushing the Centers for Medicare and Medicaid Services to rein in abuses from Medicare Advantage insurers as the Trump administration considers a policy that would enroll more seniors in the program.

The senators allege that Medicare Advantage is rife with waste, fraud and abuse, and CMS should focus on shoring up the program, rather than enrolling more individuals in it. They argue CMS should do so by adopting the congressional Medicare advisers’ recommendations to rein in the program.

“CMS must do more to preserve the Medicare program’s mission of providing older adults and people with disabilities with affordable, high-quality health care,” the senators wrote in a Wednesday letter to CMS Administrator Mehmet Oz, referring to the 2027 proposed payment rate for Medicare Advantage plans.

Lawmakers signing the letter in addition to Warren, D-Mass., include Cory Booker, D-N.J., Richard Blumenthal, D-Conn., Richard J. Durbin, D-Ill., Edward J. Markey, D-Mass., Jeff Merkley, D-Ore., Bernie Sanders, I-Vt., and Tina Smith, D-Minn.

The Medicare Payment Advisory Commission, often referred to as MedPAC, offered recommendations that included excluding diagnoses from all chart reviews and health risk assessments from risk scores and addressing the favorable selection of healthier patients that leads to overpayments.

The Democrats also say that CMS should protect patients from Medicare Advantage prior-authorization denials, strengthen network adequacy requirements and examine whether plans are evading medical-loss ratio requirements by buying up providers.

They say that changes are essential in light of the Trump administration’s floated policy to enroll more Americans in Medicare Advantage. Last month, Stat reported that Medicare Director Chris Klomp said that CMS is considering models that would automatically enroll beneficiaries into Medicare Advantage, and individuals could opt into a different service arrangement.

“Aside from the numerous financial problems and patient care concerns such a proposal raises, it also very likely violates the requirements for any Centers for Medicare and Medicaid Services Innovation Center models to reduce taxpayer spending,” the Democrats wrote of Klomp’s proposal.

Shifting all seniors to Medicare Advantage as a default option was first proposed in The Heritage Foundation’s Project 2025 as part of a larger effort to encourage more competition between Medicare Advantage and private plans.

But Republicans on Capitol Hill also support some changes to the program. Senate Health, Education, Labor and Pensions Chair Bill Cassidy, R-La., last year introduced legislation aimed at reducing overpayments on care in the program.

Medicare Advantage enrollees face more delays when seeking care compared to seniors on traditional Medicare because of more prior-authorization requirements and restricted physician networks. The average enrollee has access to “just under half of all physicians available to traditional Medicare beneficiaries in their area,” according to KFF, and Medicare Advantage insurers denied around 4.1 million prior-authorization requests in 2024.

Medicare Advantage insurers received nearly 53 million prior-authorization requests in 2025. By contrast, traditional Medicare beneficiaries submitted just 625,000 prior-authorization requests that year, according to KFF.

The lawmakers say CMS should take more steps to strengthen network adequacy requirements and penalize insurers who are out of compliance, as well as protect Medicare Advantage enrollees from inappropriate delays to care.

MedPAC estimates that overpayments to Medicare Advantage could reach $76 billion in 2026 and $1.3 trillion over the next decade, all while seniors enrolled in the program receive worse care compared to traditional Medicare. The Democrats say that by overlooking the fact that Medicare Advantage enrollees are typically healthier than the average Medicare enrollee, the federal government systematically overpredicts the program’s spending, leading to overpayment.

Medicare Advantage insurers are increasingly owned by large health care conglomerates that also own medical providers, and critics say that when the same entity both pays for and provides care, it creates anti-competitive behavior.

In their letter, the Democrats also allege that many Medicare Advantage insurers might be using profit-shifting strategies to evade the caps on what percentage of patients’ premium dollars they can spend on profits and administrative costs.

They want CMS to crack down on these profit-shifting practices by collecting better ownership data of plans and providers, as well as establishing benchmarks for common health care services.

“As Americans struggle to keep up with rising health care costs, [Medicare Advantage] insurers continue to rake in billions in overpayments, abusing taxpayer dollars, while inappropriately obstructing enrollees from accessing medical care,” they wrote. “We urge CMS to turn its focus to the legitimate fraud, waste, and abuse in [Medicare Advantage] and address the program’s longstanding problems that prevent seniors and people with disabilities from receiving medically necessary care.”