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It would appear that the "Hands Off My Medicare" crowd attacking RFK, Jr. and the Trump Administration have been waxing delusional:
https://www.fiercehealthcare.com/payers/cms-finalizes-506-medicare-advantage-benchmark-increase
CMS finalizes 5.06% Medicare Advantage benchmark increase
By Noah Tong - April 7, 2025The Centers for Medicare and Medicaid Services (CMS) finalized an increase of the average benchmark payments to Medicare Advantage (MA) plans by 5.06% on Monday.
It is nearly a three percentage-point increase over the advance notice proposed in the waning days of the Biden administration and will be seen as favorable to payers. CMS said this is due to the effective growth rate increase from 5.93% to 9.04% in the rate announcement.
“This change is primarily due to the inclusion of additional data on fee-for-service (FFS) expenditures, including payment data through the fourth quarter of 2024, which was not included on account of the early Advance Notice publication,” the agency said in a news release.
Rebasing and re-pricing ultimately brought the payments to plans down by approximately a quarter of a percent.
UnitedHealth Group stock increased by 6% in after-hours trading over its day-end closing price, following brutal days for the stock market because of tariff-induced challenges. CVS Health jumped by 9%, Elevance Health by 8% and Humana by 16%. Insurtechs Clover Health Alignment Healthcare increased by 6% and 9% respectively.
CMS will also finish phase-in of the MA risk adjustment model, and continue the phased-in approach for removing medical education costs from expenditures in growth rate calculations. Most insurers asked for the risk adjustment model to be paused.
The rate increase was supported by Medicare Advantage advocate Better Medicare Alliance and the Alliance for Community Health Plans (ACHP). The ACHP was one of the few insurer groups to support the new risk adjustment model and did not want it delayed.
"ACHP commends the Trump administration for finalizing policies in the [rate notice] that reflect higher care delivery costs and for taking another step toward reining in aggressive risk adjustment to boost competition," said President and CEO Ceci Connolly in a statement. "ACHP has long supported the new MA risk adjustment model and is pleased that CMS will finally complete the transition."
In January, CMS released the proposed rate, which would have increased payments by 2.23% and continued implementation of the risk adjustment model. Payments from the federal government would have increased by $21 billion, or 4.33%, the CMS said.
Doctors criticized the proposed rate, arguing insurers were once again receiving preferential treatment from the federal government. Providers and physicians said Congress still hasn't reversed painful doc pay cuts implemented by CMS as required by prior statute—and yet insurers were in line to get a boost.
The physician pay reversal was included in an end-of-the-year healthcare package before the bill failed at the eleventh hour due to other political considerations. It was again rejected in an effectively symbolic introduction by Senators Ron Wyden, D-Oregon and Bernie Sanders, I-Vermont before the Senate agreed to a government funding bill.
The insurance lobby criticized Biden’s health officials during his tenure for enacting tougher rates on plans, so the 2.23% rate was more favorable to payers than initially expected. In 2024, the government finalized a cut of 0.16% to MA plans.
Starting Jan. 1, annual out-of-pocket prescription drug costs were capped at $2,000 for enrollees.
CMS recently released its Contract Year 2026 MA and Part D final rule, choosing to punt on implementing agent and broker marketing requirements, most star ratings changes and imposing new guardrails on AI. The rule also declined to adopt a Biden-supported policy to have Medicare and Medicaid cover anti-obesity drugs, but did include new requirements on prior authorization and Special Supplemental Benefits for the Chronically Ill.
Left of center Morning Brew brings some additional macro market perspective.
https://www.healthcare-brew.com/stories/2025/04/09/cms-hikes-medicare-advantage-payments
CMS hikes Medicare Advantage payments up 5%, over $25b
Government payments to MA plans are set to rise over $25b in 2026—and Wall Street noticed.
By Caroline Catherman | April 9, 2025The federal government is going to pay Medicare Advantage (MA) plans a lot more in 2026.
In payment policy updates released on Monday evening, the Centers for Medicare and Medicaid Services (CMS) said MA plans will receive average payment increases of 5.06%—or more than $25 billion—from 2025 to 2026. This is 2.83 percentage points higher than CMS had predicted in its January advance notice of these changes, and more than double the 2.33% increase it had estimated from 2024 to 2025.
“This was the administration’s first chance to pump the brakes on MA, and there was some uncertainty going into the release. The rate notice indicates a desire to drive on—and maybe accelerate,” Luke Hansen, chief medical officer at Arcadia, a healthcare data platform for payers and providers, told Healthcare Brew.
For 2025, the Medicare Payment and Advisory Commission predicted the federal government will pay MA plans $538 billion. (In 2024, it paid $494 billion, per the commission.)
Though the stock market is largely a burning dumpster fire right now, MA providers’ shares are soaring after the news.
The largest MA provider, UnitedHealthcare, saw its stock jump from $524.70 at market close on Monday to $582.17 at market open on Tuesday, though the stock came down to around $553.08 by the day’s end.
Why so high? CMS said on April 7 that the rate increase is “largely attributable” to an increase in the effective growth rate. This rate represents the average expected change in MA benchmarks, which is the maximum amount the government will pay each Medicare Advantage plan, according to independent research nonprofit the Commonwealth Fund.
Benchmarks are calculated using the average spending in traditional fee-for-service Medicare in each county. That data wasn’t complete for 2024 when CMS estimated a 5.93% effective growth rate in its 2026 advance notice. Now, with the data complete, the effective growth rate is 9.04%, CMS said.
Zooming out. The rate updates and 2026 guidance were released just days after Congress approved Mehmet Oz as the new CMS director on April 3.
The New York Times reported in February that Oz has financial ties to Medicare Advantage companies, like TZ Insurance, sparking concerns about potential conflicts of interest. But during congressional confirmation hearings, Oz addressed bipartisan concerns about prior authorization and overpayment.
CMS will also in 2026 complete reforms to the MA risk adjustment model, which is intended to reduce overpayments, and finalize guidance on the Inflation Reduction Act’s Part D changes, including the Medicare Drug Price Negotiation Program.
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