CMS provides notice of MA increase 

WASHINGTON – Payments from the government to Medicare Advantage plans are expected to increase, on average, by 4.33% or more than $21 billion from 2025 to 2026 as proposed, according to CMS’s Calendar Year 2026 Advance Notice for the Medicare Advantage and the Medicare Part D Prescription Drug Programs. 

The advance notice complements a previously proposed rule that CMS released in November 2024. 

“CMS has worked to ensure that people with Medicare Advantage and Medicare Part D have access to stable and affordable offerings,” said CMS Administrator Chiquita Brooks-LaSure. “Today’s Advance Notice continues CMS’ efforts to provide access to affordable, high-quality care in Medicare Advantage while being a good steward of taxpayer dollars. We are also continuing implementation of the Inflation Reduction Act, ensuring people with Medicare Part D have more affordable coverage for their medications.” 

CMS proposes to complete its implementation of a three-year phase-in of improvements to the MA risk adjustment model and growth rate calculation related to medical education costs as described in the CY 2024 Rate Announcement, as well as other technical improvements. In 2023, the agency announced its plan to complete this phase-in over three years to provide a glide path and predictability for plans and providers, while implementing important updates to ensure people with MA can continue to access the care they need and that taxpayer dollars are well spent. 

Pausing the risk adjustment model phase-in would result in $3.4 billion in additional payments to MA plans, and pausing the technical adjustment to growth rates regarding medical education costs would add $7 billion, which, combined, would result in an additional $10.4 billion in payments to MA plans in 2026 that are not necessary to support stability in the program.   

The federal government is expected to spend $9.2 trillion over the next decade on MA payments to plans—$1.3 trillion of those MA payments are MA rebate dollars used for MA supplemental benefits and premium buy-downs—and it is crucial these payments are accurate to prevent wasteful spending, CMS says. 

The American Medical Association responded: 

“CMS has announced that Medicare Advantage plans are expected to receive an average payment increase of 4.33% from 2025 to 2026. Meanwhile, physicians treating Medicare patients are facing their fifth consecutive year of payment cuts—this time by 2.8%—despite practice costs rising by 3.5%, according to the Medicare Economic Index. So, while MA plans receive an increase beyond the expected health care inflation rate, Congress not only failed to provide a physician payment update but allowed a new round of cuts at the end of the lame duck. It's unbelievable they're giving insurance companies that had record profits an increase while at the same time cutting payment to physician practices that are struggling to survive. This contrast highlights the urgent need for Congress to prioritize linking payment to physician practices to the cost of providing care. Otherwise, with or without MA plans, patient access will suffer if physicians close their practices. A new Congress is meeting — it’s time for a new approach to physician payment reform.” 

• The CY 2026 Advance Notice may be viewed at https://www.cms.gov/files/document/2026-advance-notice.pdf. 
• A fact sheet discussing the provisions of the CY 2026 Advance Notice can be viewed at https://www.cms.gov/newsroom/fact-sheets/2026-medicare-advantage-and-part-d-advance-notice-fact-sheet. 
• The Draft CY 2026 Part D Redesign Program Instructions can be found at https://www.cms.gov/files/document/draft-cy-2026-part-d-redesign-program-instructions.pdf. 
• A fact sheet discussing the provisions of the Draft CY 2026 Part D Redesign Program Instructions can be viewed at https://www.cms.gov/newsroom/fact-sheets/draft-cy-2026-part-d-redesign-program-instructions-fact-sheet.