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Plans Oppose Flat 2027 MA Rates

In comments on the proposed 2027 Advance Notice of rates, Medicare Advantage (MA) plans say a flat rate will mean reduced benefits and services and increased out-of-pocket costs for seniors. UnitedHealth Group estimates the proposed rate increase would lead insurers to reduce benefits by more than $600 a year. AHIP says its actuary Wakely determined no-premium plans could face a 50% cut to supplemental benefits and increased out-of-pocket costs by $1,000. Premiums could increase $23 per month, resulting in a jump of more than $550 for a couple each year.

The plans also argue rising utilization and costs are being ignored.

In addition, Humana, insurer trade group AHIP, and the Blue Cross Blue Shield Association want the proposed changes to risk adjustment regarding chart reviews not linked to encounters to be delayed until 2028. UnitedHealth Group and the Better Medicare Alliance recommend that CMS implement this change gradually rather than all at once next year. AHIP and the Alliance of Community Health Plans say plans should be able to use chart reviews to score new members.

I expect final rates to increase by between 2% and 3%.

Additional article: https://www.beckerspayer.com/research-analysis/benefits-coverage-for-no-premium-plans-could-drop-50-under-2027-ma-rule-ahip/

(Some articles may require a subscription.)

#medicareadvantage #rates #riskadjustment

https://www.modernhealthcare.com/politics-regulation/mh-cms-2027-medicare-advantage-proposal-unitedhealth

Regional MA Plans Surged In Open Enrollment

Becker’s Payer interviewed several executives at regional plans that grew tremendously during the Medicare Advantage (MA) open enrollment season as most big national plans contracted and shed lives. Medicare Advantage enrollment grew less than 1% for open enrollment, but regional plans grew by 443K while national plans dropped by 328K. Seniors benefited from the continued commitment of the regional plans.

Health Alliance Plan in Michigan added more than 37,000 new enrollees in open enrollment, a 58% increase. Priority Health added more than 35,000 new members in open enrollment. SCAN Group added 127,000 new members during open enrollment. The growth pushed SCAN into the top 10 nationally among MA plans. Alignment Healthcare grew 31% year over year in 2025 to roughly 276,000 total members. Network Health grew 37% during open enrollment to 126,000 total MA members.

#medicareadvantage #enrollment

https://www.beckerspayer.com/payer/medicare-advantage/were-running-in-when-others-are-running-out-stability-drives-record-growth-for-regional-medicare-advantage-plans/

Independent Physicians Embrace PE

A good article discussing the plight of independent physician practices. With about half of physicians now owned by health systems and many of the remainder owned by public equity and health plans, standalone practices are suffering. Medicare rates have increased just 10% since 2001, yet costs are up for practices by 63% in that time. Medicare rates drive commercial rates. Independent practices are getting creative to survive, including teaming up with public equity firms that own medical service organizations and tapping into their services and capital, while remaining free-standing.

(Article may require a subscription.)

#physicians #independentpractices

https://www.modernhealthcare.com/providers/mh-independent-physicians-private-equity-partnerships/

MA Plans Object To Flat 2027 Rates

The Medicare Advantage (MA) community was shocked by the near-flat rates that the Centers for Medicare and Medicaid Services (CMS) proposed for 2027. MA plans are now laying out the potential impacts in comments on the proposed regulation.

The rate hike was computed at just 0.09% due to two new risk adjustment reforms – one embedded in the new v28 model and another that bars risk scoring unless diagnoses also appear on submitted provider encounters. The changes wiped out the economic growth increase.

Various MA plan trade groups were unanimous in saying that the rate as is could undermine the program yet again. Major health plan trade group AHIP said in comments to the proposed rule that the flat rate “risks undermining CMS’ goal of providing beneficiaries with stable, affordable choices during the annual enrollment period.” It noted sharply rising medical costs and high utilization in the program. It cited an analysis from actuarial and consulting firm Wakely that member premiums could increase by $23 per month if insurers maintain existing benefits — $550 per year for a couple. Wakely said benefits might have to be cut by 50% to maintain $0 premiums, including important vision and dental benefits, and out-of-pocket costs could surge by $1,000.

The Blue Cross Blue Shield Association said that smaller, regional Blues plans have fewer avenues to absorb revenue losses in MA compared to the big MA plans. The Better Medicare Alliance, which advocates for consumers, said the disruption that occurred in the 2026 open enrollment, including record forced plan changes, would worsen.

I do not think CMS will back off of the risk adjustment proposals, but I do expect the final economic growth numbers to grow by between 2 and 3 percent, which will give some relief. But it will still mean major reductions again in 2027.

#medicareadvantage #rates

https://www.fiercehealthcare.com/regulatory/insurance-groups-say-proposed-flat-medicare-advantage-rates-fail-meet-moment

SOTU Has Little On Healthcare

President Trump touted his accomplishments in his State of the Union address Tuesday but spent little time on affordability in healthcare. In the speech he did hit two main topics, but just for a total of five minutes of the marathon speech.

• The Great American Health Plan announcement – Trump doubled down on his desire to shift subsidy and support dollars from insurers to individuals to pick their own healthcare. In the speech and his original announcement, few details have been given about exact mechanisms for the proposal. It is more of an outline than a real plan. He shied away from mentioning the expired enhanced Exchange subsidies.
• Lower prescription drug prices – He also championed the work he has done on prescription drug prices. Here he has amassed a more comprehensive record, with a series of executive orders, most-favored-nation (MFN) model proposals for Medicaid and Medicare, and price negotiations with drug makers to lower prices.

I was not impressed with the vagueness of his health insurance coverage proposal but have given Trump a great deal of credit on moving the drug price needle. No one has been able to really do the latter before.

#trump #healthcare #coverage #drugpricing

https://www.healthcaredive.com/news/trump-state-of-the-union-healthcare-2026/812962

CBO: Medicare Part A Trust Fund Bust in 2040

The Congressional Budget Office (CBO) has updated its estimates around the solvency of the Medicare Part A Trust Fund and now expects the fund to go bust in 2040. The balance will grow each year through 2031, but then spending will begin to overtake revenue until it eventually runs out in 2040. This is 12 years less than the last estimate.

The culprits are:

• Lower taxes in the One Big Beautiful Bill Act (OBBBA).
• Accelerating medical cost and spending in both traditional Medicare and Medicare Advantage (MA).

The CBO’s projection is better than the Medicare’s trustees’ last projection, which said the fund would be depleted by 2033.

Additional article: https://www.fiercehealthcare.com/regulatory/cbo-estimates-medicare-trust-fund-will-run-out-2040

#medicare #spending #insolvency

https://www.healthcaredive.com/news/medicare-trust-fund-expire-2040-cbo-gop-obbb/812937

Exchange Enrollment Expected To Drop

While actual enrollment during the open enrollment season in the Exchanges did not drop a great deal, the cost of not extended enhanced subsidies is now appearing to take hold. State Exchanges as well as health plans are reporting cancellations as well as lack of premium payments, which could send rolls dropping dramatically throughout the year. As one example, the biggest Exchange plan nationwide, Centene, says it expects its rolls to drop over one-third this quarter. Cigna, Elevance Health, Molina Healthcare, and UnitedHealthcare anticipate collectively losing approximately 3.4 million exchange members by the end of 2026. 

(Article may require a subscription.)

#exchanges #enrollment #healthplans #coverage

https://www.modernhealthcare.com/insurance/mh-aca-exchanges-membership-premium-payments

Congress Inches Toward Site Neutral Payments

Congress didn’t pass site neutral payments in Medicare but did make some incremental progress toward the reform in the FFY 2026 appropriations bill that was recently passed. This could lead to cuts to the tune of billions of dollars in hospital reimbursements in the future.

The bill requires health systems to obtain unique National Provider Identifiers, or NPIs, for their outpatient departments by 2028. This will have the effect of giving the government detailed information about outpatient care provided at hospital-owned facilities — and its cost — to support broader site-neutral policies.

The Trump administration did implement site neutral payments for drug administration via regulation this year. That follows some other modest reforms several years ago. Site neutrality pays the same rate to provider regardless of the site the service is performed at – physician office, ambulatory surgery center, off-campus hospital outpatient department, or on-campus hospital outpatient department.

(Article may require a subscription.)

#hospitals #siteneutral #medicare

https://www.modernhealthcare.com/politics-regulation/mh-congress-outpatient-pay-site-neutral-reform/

— Marc S. Ryan

SNPs Up; Major Plan Terminations In MA

Two new articles on the 2026 open enrollment season in Medicare Advantage (MA).

A Modern Healthcare analysis says membership in Special Needs Plans, or SNPs, is now 8.2 million as of Feb. 1, up 12.2% from a year before. While enrollment growth overall slowed from 2025 to 2026, SNP growth actually went up. SNP growth was 10.1% in 2025. About a quarter of all enrollees are now in SNPs.

A study in JAMA examined the major contraction in MA and rates of forced moves. It found that one in 10 MA enrollees were forced to disenroll from their current product choice heading into 2026 due to insurer exits or contractions. That is a ten-fold increase from historic averages and is up from 6.9% in 2025. Among the 28.6 million MA enrollees that were part of the study sample, 2.9 million were forced to find new coverage for 2026, with an estimated 25.8 million able to retain their current plan.

Smaller insurers accounted for 48.8% of forced disenrollments. Twelve states had more than 20% of their MA enrollees facing forced disenrollment.

The 2.9 million figure is similar to other studies, including one that estimated an impact to 2.6 million.

You can read my analysis on the 2026 enrollment season here: https://www.healthcarelabyrinth.com/2026-medicare-advantage-enrollment-season-good-news-bad-news/

Additional article: https://www.modernhealthcare.com/insurance/mh-medicare-special-needs-plan-enrollment-2026/

(Some articles may require a subscription.)

#medicareadvantage #enrollment

https://www.beckerspayer.com/payer/medicare-advantage/10-of-medicare-advantage-enrollees-forced-to-switch-plans-for-2026-study/?origin=PayerE&utm_source=PayerE&utm_medium=email&utm_content=newsletter&oly_enc_id=1115F9468978C5V

— Marc S. Ryan

More Bad News On Affordability Front

A new Commonwealth Fund report finds that middle-income workers and their families are spending an average of 10.1% of median income on their health premiums and deductibles. The 2024 data from the employer-sponsored insurance market show that premium contributions for family coverage ranged from an average of $5,584 in Oregon to $9,148 in California. In 19 states, the average premium and deductible contribution topped 10% of that state’s median income. Costs varied by region, industry, and employer size. Five states’ costs breached the affordability metric under the Affordable Care Act (ACA), which could trigger coverage in the Exchanges.

The researchers recommend employers adjust out-of-pocket requirements and premiums based on the income of employees. The report also notes one of my key reform recommendations – a shift in the broader trends around healthcare pricing and spending.

#healthcare #coverage #affordability

https://www.fiercehealthcare.com/payers/family-premiums-account-10-income-19-states-commonwealth-fund