Humana shares last day
The proposal involves an average net payment increase of 0.09% for Medicare Advantage plans in 2027, according to a statement from the Centers for Medicare & Medicaid Services, or CMS, on Monday. That figure is significantly lower than Wall Street analysts’ expectations that the agency would propose a rate increase of between 4 and 6 percent for next year.
CMS typically finalizes Medicare Advantage rates in early April. If the current proposal stands, the rate increase would result in more than $700 million in additional payments to Medicare Advantage plans in 2027, according to the agency’s statement.
The government’s closely monitored payment rate determines how much insurers can charge for monthly premiums and benefits for the plans they offer, and, ultimately, their profits. The Wall Street Journal first reported the government’s rate proposal Monday.
Medicare Advantage is a private health insurance plan underwritten by Medicare. More than half of Medicare beneficiaries are enrolled in such plans, attracted by lower monthly premiums and additional benefits not covered by traditional Medicare, according to health policy research firm KFF.
CMS said it was also seeking to reduce a lucrative industry billing practice. Part of the proposal aims to improve payment accuracy and ensure that Medicare insurers are properly reimbursed, the Journal reported.
“The proposed payment policies are intended to ensure that Medicare Advantage works better for the people it serves,” Dr. Mehmet Oz, CMS Administrator, said in the release. “By strengthening payment accuracy and modernizing risk adjustment, CMS helps ensure that beneficiaries continue to have affordable plan choices and reliable benefits, while protecting taxpayers from wasteful spending that is not directed toward meeting real health care needs.”