Understanding the 2026 Rate Proposal
The Centers for Medicare & Medicaid Services (CMS) has proposed a significant funding adjustment for Medicare Advantage programs in 2026. This adjustment includes a $21 billion increase in overall funding, representing a 4.33% boost compared to 2025’s rates. This proposed increase surpasses the 3.7% growth projected for 2025, indicating a shifting trend in program funding.
Industry Leadership Perspectives
Elevance Health’s executive leadership has expressed measured optimism about the rate adjustments. Felicia Norwood, Executive Vice President of Government Health Benefits at Elevance Health, welcomed the upward trend following two consecutive years of rate reductions. However, she emphasized that current cost trends necessitate even more substantial funding increases.
Political and Administrative Framework
The rate proposal, initiated under the Biden administration, awaits final approval in April under the incoming Trump administration. This transition period creates an opportunity for healthcare providers and administrators to refine the proposal further, particularly concerning the Part D risk model adjustments.
Growth and Future Outlook
Despite funding challenges, Elevance Health projects robust growth in its Medicare Advantage membership. CEO Gail Boudreaux forecasts a 7-9% membership increase for 2025, driven by successful open enrollment periods and expanded group Medicare Advantage participation. This growth trajectory underscores the program’s vital role in senior healthcare coverage.
Strategic Response and Advocacy
Elevance Health has committed to engaging with administrative officials to recommend essential modifications to the proposed rates. Their advocacy focuses on ensuring the program’s sustainability and its ability to meet the healthcare needs of America’s senior population effectively.
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