The Biden administration has proposed a plan that could increase the pay of private Medicare insurers by over $21 billion in 2026. The change is expected to benefit companies like UnitedHealth Group, Humana, and CVS Health, which offer Medicare Advantage plans.
Under the proposal, the base payment for these plans would be increased by about 2% next year, but insurers would receive an average 4.3% increase in overall revenue when rates are adjusted for the health of their enrollees. This adjustment is aimed at making payments more accurate and reducing abuses of the risk adjustment system.
The proposal also aims to reduce tensions among Republican policymakers over Medicare Advantage’s cost. Industry analysts expect a better environment for these insurers under the Trump administration, as President-elect Trump has expressed support for privately run Medicare plans.
However, critics have argued that the policy is similar to cutting seniors’ health benefits. The Biden administration acknowledges that pausing the risk adjustment model would increase the government’s payment to MA plans by $3.4 billion next year.
The final policy for 2026 must be released by April 7, and CMS will accept comments on the proposal until February 10.
Source: https://www.axios.com/2025/01/13/biden-proposes-insurer-pay-increase