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.
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