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MA Pay Hike Inadequate; Physicians Upset

Health plans stocks did well on the news that Medicare Advantage (MA) rate hikes would improve in 2026, but many are still calling the increase inadequate and hope the incoming Trump administration will offer more relief. Advocates for MA are saying individual plan offerings will still have to decrease in 2026 after a major contraction in 2025. See my blog today digesting the announcement: https://www.healthcarelabyrinth.com/calling-all-plans-advance-notice-released-for-2026-ma-and-part-d-rates-and-other-policies/ .

In related news, physicians are very upset that health plans will see an increase while they will see a fifth year of reductions. Docs feel plans are getting preferential treatment. I see the docs’ point.

In other news, the Centers for Medicare and Medicaid Services (CMS) want to continue a premium stabilization program for standalone Part D (PDP) plans. A spike in premiums would have occurred without the program. Republicans think the program could be extra-legal (as I do). The spikes are related to the misguided and unfunded Medicare Part D cost-sharing reductions pushed through by Democrats in the Inflation Reduction Act (IRA).

(Some articles may require a subscription.)

Additional articles: https://www.fiercehealthcare.com/payers/cms-proposes-increasing-medicare-advantage-benchmark-payments-223-or-21-billion and https://insidehealthpolicy.com/inside-drug-pricing-daily-news/cms-aims-cement-part-d-stabilization-demo-new-admin-hits

#medicareadvantage #rates #physicians #cms #partd #pdp

https://insidehealthpolicy.com/daily-news/cms-projects-433-ma-pay-bump-ma-plans-look-trump-better-deal

2026 MA Proposed Rate Announced

The outgoing Biden administration has released its Advance Notice for 2026 rates and other policy changes. I quickly reviewed the 180-page Advance Notice, the CMS Fact Sheet, and CMS Press Release. Here are some highlights and Healthcare Labyrinth will have more information on rates and Star changes next week.

My summary: The announcement is progress for MA plans and will be a bit of a relief for insurers and investors. But this still is a very skimpy increase given all the MA world is facing. It could mean a third year in MA benefit cuts.

Details:

— CMS says MA rates go up by 4.33%. But plans will take issue with including a risk score trend of 2.1% in the calculation. Plans will say they will get closer to a 2.23% because plans do not count the coding increase as a real revenue increase. They see it as offsetting a rise in risk/costs.
— While this is progress from 2024 and 2025, MA plans ultimately will see this as inadequate. It means MA rates will have gone up just 0.95% over 3 years when the industry is battling a return of utilization, inflation, and increased costs due to new laws and regulations (e.g., PA restrictions and IRA Part D costs).
— With just a real 2.23% increase in 2026, we can expect more contraction of benefits and choice and increases in cost-sharing and premiums. Big, publicly traded plans will have to contract again to hit long-term margins promised to investors.
— CMS said suspending the final year of the risk model phase-in or medical education changes would have added $10.4 billion to costs. The increase alone will cost about $21 billion.
— A much higher growth rate drove most of the hike. This was largely due to growth in costs in the FFS program (5.67%) and MA (7.70%) for non-ESRD populations.
— But this was largely offset by a -0.69% loss of revenue due to poor Star performance and the risk model and normalization changes of -3.01%.
— The minimum statutory coding pattern adjustment stayed at a -5.90%, resulting in no difference from year to year.
— The incoming Trump administration may offer some relief on the risk model.

CMS release and fact sheet: https://www.cms.gov/newsroom/fact-sheets/2026-medicare-advantage-and-part-d-advance-notice-fact-sheet and https://www.cms.gov/newsroom/press-releases/cms-releases-proposed-2026-payment-policy-updates-medicare-advantage-and-part-d-programs

Additional articles: https://www.beckerspayer.com/policy-updates/cms-proposes-21b-payment-increase-for-medicare-advantage-in-2026-10-notes.html

#cms #medicareadvantage #healthplans #rates

https://www.fiercehealthcare.com/payers/cms-proposes-increasing-medicare-advantage-benchmark-payments-223-or-21-billion

Musk Calls Out Goals For DOGE

Tesla CEO Elon Musk, who is co-leader of Donald Trump’s proposed Department of Government Efficiency (DOGE) commission, said that the best-case scenario would be to put together $2 trillion in cuts to federal spending. He said that then DOGE would have a good shot at executing $1 trillion in reductions.

Whether the goal is a real $1 trillion or $2 trillion, it is clear that healthcare program cuts will play a big role in spending reductions.

#doge #government #spending #trump #congress #healthcare

https://thehill.com/homenews/administration/5076095-elon-musk-doge-2t-spending-cut-goal/?tbref=hp

Exchange Enrollment Hits Record

With about a week left of enrollment, the Centers for Medicare and Medicaid Services (CMS) said that the Exchanges have reached yet another record enrollment number after mostly lagging during the enrollment season. More than 23 million people have selected coverage. There are 3.2 million new enrollees. Of the people who have signed up so far, 16.7 million found coverage on the federal Exchange, with 6.9 million on the state Exchanges. This is the fourth consecutive year of enrollment records.

Enhanced premium subsidies expire at the end of 2025, which could dramatically impact enrollment. Today congressional Republicans declined to say they would simply let the subsidies expire. Instead, they expect the issue to emerge during talks to extend the Trump tax cuts and the reconciliation process. I still see this as a long shot, but it is bolstered by Sen. Lisa Murkowski’s advocacy for continuation of the enhancements.

CMS press release and fact sheet: https://www.cms.gov/newsroom/press-releases/nearly-24-million-consumers-have-selected-affordable-health-coverage-aca-marketplace-time-left and https://www.cms.gov/newsroom/fact-sheets/marketplace-2025-open-enrollment-period-report-national-snapshot-1

Additional articles: https://www.healthcaredive.com/news/aca-enrollment-2025-record-high/736803/ and https://insidehealthpolicy.com/daily-news/admin-announces-24m-aca-sign-ups-so-far-urges-congress-keep-enhanced-credits and https://thehill.com/policy/healthcare/5072422-biden-administration-achieves-fourth-record-breaking-aca-enrollment-ahead-of-exit/ and https://apnews.com/article/obamacare-aca-health-care-coverage-biden-trump-0c73dcde4a19aea65cb83de01f2d5d2e and https://www.beckerspayer.com/payer/states-with-the-largest-aca-enrollment-increases-2025.html and https://www.modernhealthcare.com/politics-policy/aca-subsidies-trump-exchange-market

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#aca #obamacare #exchanges #coverage

https://www.fiercehealthcare.com/regulatory/236m-people-have-signed-aca-coverage-during-open-enrollment-cms