CMS releases 2027 Medicare Advantage rate plan calling for 0.09% increase

The Centers for Medicare & Medicaid Services, CMS, released the Calendar Year 2027 Advance Notice of Methodological Changes for Medicare Advantage, MA, Capitation Rates and MA and Part D Payment Policies (the CY 2027 Advance Notice). This annual release proposes routine and technical updates that ensure MA and Part D payments are accurate. If finalized, the proposed policies are projected to result in a net average year-over-year payment increase of 0.09%, or over $700 million in MA payments to plans in CY 2027. This expected increase includes consideration of the various elements that impact MA payments, such as growth rates of underlying costs, 2026 Star Ratings for 2027 quality bonus payments, and risk adjustment updates. CMS also expects that the CY 2027 Advance Notice’s proposed policies will promote even greater payment accuracy, maintain beneficiary choice, help ensure affordable coverage for Medicare beneficiaries, and enable an even more stable MA program in the long run. CMS is committed to ensuring Medicare beneficiaries are free to choose the health coverage that best meets their needs, and that such coverage aligns spending and value to the greatest extent possible. Establishing accurate payments in MA and Part D is foundational to this objective of aligning spending with value, and the agency has taken particular care in considering updates to these payment policies. Publicly traded companies in the space include CVS Health (CVS), Centene (CNC), Cigna (CI), Elevance Health (ELV), Humana (HUM), Molina Healthcare (MOH) and UnitedHealth (UNH).