CMS will pay Medicare Advantage plans $25 billion more in 2026 than in 2025.
The agency published the final rate notice for 2026 on April 7. CMS estimates MA plans will receive 5.06% higher payments in 2026.
The final rate is significantly higher than those set by the Biden administration. In January, the outgoing administration proposed a 2.23% increase in payments to MA plans, which insurers said was inadequate to cover rising medical costs.
The 5.06% increase will be the largest MA insurers have received in several years. In 2024, CMS estimated payments to MA plans would increase by 3.32%, and by 3.7% in 2023.
The agency will complete the three-year phase-in of risk-adjustment changes in 2026, first implemented by the Biden administration. The changes shift MA’s diagnosing coding from ICD-9 to ICD-10 and remove certain codes from the hierarchical condition categories model. Many payers opposed the changes in risk adjustment, saying they amounted to a cut in payments.
Share prices for the largest MA insurers — Humana, UnitedHealth Group and CVS Health — rose after the rate announcement, Bloomberg reported.
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