Health insurers tumble after Trump proposes keeping Medicare rates flat

The proposal calls for a net average payment increase of 0.09% for Medicare Advantage plans in 2027. a version Monday from the Centers for Medicare and Medicaid Services. That’s significantly less than Wall Street analysts expected the agency to recommend a rate hike of between 4% and 6% next year.

CMS typically finalizes Medicare Advantage rates in early April. If the current proposal passes, the rate increase would result in more than $700 million in payments to Medicare Advantage plans in 2027, the agency said.

The closely watched government payout rate determines how much insurance companies can charge for monthly premiums and plan benefits they offer, and ultimately their profits. Wall StreetJournal first reported About the government’s interest rate proposal on Monday.

Medicare Advantage is a privately operated health insurance plan that contracts with Medicare. More than half of Medicare beneficiaries are enrolled in such plans, lured by lower monthly premiums and extra benefits not covered by traditional Medicare, according to health policy research firm KFF.

CMS has also said it is considering cutting the money-making industry billing practice. Part of the proposal aims to improve payment accuracy and ensure Medicare insurers receive adequate reimbursements, the Journal reported.

CMS Director Dr. “These proposed payment policies are intended to make Medicare Advantage work better for the people it serves,” Mehmet Öz said in the statement. “By strengthening payment accuracy and streamlining risk adjustment, CMS is helping beneficiaries continue to have affordable plan options and reliable benefits while protecting taxpayers from unnecessary expenses that are not directed to meeting actual health needs.”