Big news for Medicare Advantage fans-payments to these popular plans are set to jump again in 2026, and it’s a hefty boost that’s turning heads. The Centers for Medicare & Medicaid Services (CMS) dropped the final word on April 7, locking in a 5.06% average increase for Medicare Advantage (MA) plans.
That’s more than double the 2.23% bump first floated in the Advance Notice back in January. If you’re enrolled in one of these private plans or just curious about where healthcare dollars are headed, this shift is worth a peek-it’s a $25 billion-plus windfall for insurers, and it’s got everyone talking.
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So, what’s driving this bigger-than-expected hike? CMS points to fresher data as the star of the show. “The change is primarily due to the incorporation of additional fee-for-service payment data, including through the fourth quarter of 2024,” the agency explained in its Rate Announcement.
That updated info bumped the effective growth rate-a key metric tied to Medicare costs-from 5.93% in the proposal to a whopping 9.04% now. It’s a sign that rising healthcare expenses are hitting the books, and CMS is adjusting to keep pace. For beneficiaries, this could mean steadier premiums and benefits, though it’s up to plans like UnitedHealth and Humana to decide how the cash flows.
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This isn’t just a random tweak-it’s the first major Medicare move under the Trump administration, and it’s a shift from the Biden era’s tighter 0.2% dip for 2025. Industry voices are cheering. “We applaud the Trump administration for protecting seniors and fully funding Medicare Advantage,” said Mary Beth Donahue, CEO of Better Medicare Alliance.
After years of leaner increases, this 5.06% boost-the biggest benchmark jump in a decade-feels like a lifeline for insurers who’ve been wrestling with higher costs and utilization spikes. Stocks for big players like Humana soared 11.5% in after-hours trading, showing Wall Street’s betting big on this news.
The timing’s notable too. CMS finalized this alongside wrapping up a three-year phase-in of risk adjustment updates, sticking to plans despite pushback. “Finalizing the model will improve payment accuracy,” CMS noted, aiming to curb overcoding while keeping plans on their toes.
With $9.2 trillion projected for MA over the next decade, every percentage point matters. For the 65 million Medicare folks-over half in MA-this could shape everything from plan options to out-of-pocket costs in 2026, even if the details are still unfolding.
This news was originally published on this post .
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