US EditionUS proposes slight rise in 2027 Medicare insurer payments, shares fall
CMS proposes a 0.09% payment increase to Medicare Advantage plans for 2027, potentially adding $700 million in payments while aiming to improve accuracy and reduce billing abuses.
- On Jan 26, CMS proposed a 0.09% average payment increase for Medicare Advantage plans in 2027, causing shares of insurers including UnitedHealth and Humana to fall more than 10%.
- CMS said the update reflects cost trends and quality ratings, and `These proposed payment policies are about making sure Medicare Advantage works better for the people it serves`, CMS Administrator Mehmet Oz said, noting aims to modernize risk adjustment and protect taxpayers.
- The agency estimated the increase would add more than $700 million to payments in 2027, and CMS said the payment rate determines insurers' premiums and profits.
- Insurers face pressure on 2027 margins and EPS estimates, and Kevin Gade expects UnitedHealth CEO Stephen Hemsley to address impacts on Tuesday's investor call.
- CMS will issue final rates on April 6, with industry watchers noting potential adjustments, while Bond warned, `If finalized, this proposal could result in benefit cuts and higher costs for 35 million seniors and people with disabilities when they renew their Medicare Advantage coverage in October 2026`.
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CMS Proposes Small Rise in Medicare Advantage Payments for 2027
The Centers for Medicare & Medicaid Services (CMS) on Jan. 26 proposed a 0.09 percent increase in average year-over-year payments to private Medicare Advantage (MA) plans in 2027. The proposed rate hike will result in more than $700 million in MA payments over the year, the agency said in a statement, which is significantly lower than this year’s 5.06 percent increase. The MA plan, also known as Medicare Part C, is an alternative to a traditiona…
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