CMS announces pay increase for MA 

WASHINGTON – Payments from the government to Medicare Advantage plans are expected to increase, on average, by 5.06% from 2025 to 2026. 

This is an increase of 2.83% since the CY 2026 Advance Notice, largely attributable to an increase in the effective growth rate. 

In its April 7 Calendar Year 2026 Rate Announcement for the Medicare Advantage and Medicare Part D Prescription Drug Programs, CMS explained: 

The method for setting the effective growth rate is set in statute and represents the average expected change in the benchmarks, used to determine payment for MA plans, based on the growth in Medicare per capita costs. The effective growth rate is 9.04%, which is higher than the estimate of 5.93% in the CY 2026 Advance Notice. This change is primarily due to the inclusion of additional data on fee-for-service (FFS) expenditures, including payment data through the fourth quarter of 2024, which was not included on account of the early Advance Notice publication. 

Also in the payment policy update: 

• In CY 2024, CMS initiated a three-year, phased-in approach for removing the medical education costs — related to services MA enrollees receive — from the historical and projected expenditures supporting the FFS costs that are included in the growth rate calculations. For CY 2026, CMS will complete the phase-in of the technical adjustment by applying 100% of the adjustment for MA-related medical education costs. 
• CMS is also completing a three-year phase-in of improvements to the MA risk adjustment model that the agency finalized in the CY 2024 Rate Announcement, with the first year of the three-year phase-in starting with CY 2024. CMS is committed to expanding access to affordable, high-quality care through Medicare Advantage, while also implementing measures to safeguard beneficiaries and taxpayers from waste, fraud, and abuse. These ongoing improvements support a sustainable program that benefits both current and future Medicare recipients. 

The CY 2026 MA and Part D Rate Announcement may be viewed at https://www.cms.gov/files/document/2026-announcement.pdf.   

A fact sheet discussing the provisions of the CY 2026 Rate Announcement can be viewed at https://www.cms.gov/newsroom/fact-sheets/2026-medicare-advantage-and-part-d-rate-announcement.    

• Related: CMS on April 4 released a final rule for Medicare Advantage.