Medicare Advantage rate lift
U.S. regulators will raise Medicare Advantage plan payments for 2027 by about 2.48% plus a 2.5% risk-assessment adjustment—an effective increase near 5% that translates to more than $13 billion in additional payments. That boost came as UnitedHealth is facing a Department of Justice probe into its Medicare billing practices, adding simultaneous upside to industry cash flows and regulatory scrutiny. (medicaleconomics.com) (columbian.com) (medicaleconomics.com)
The Trump administration raised 2027 Medicare Advantage payment rates, handing private insurers a bigger-than-expected increase for plans that cover older Americans. (cms.gov) The Centers for Medicare and Medicaid Services said on April 6 that payments to Medicare Advantage plans will rise 2.48% on average in 2027, or more than $13 billion. When the agency adds expected changes in patients’ risk scores, the effective increase reaches 4.98%. (cms.gov) That was a sharp turn from the draft policy released earlier this year, when the agency projected only a 0.09% increase, or about $700 million. The final notice kept other payment-accountability policies while lifting the overall revenue outlook for insurers. (cms.gov) Medicare Advantage is the private-plan version of Medicare, with the federal government paying insurers a set amount to manage care for each enrollee. Those payments rise when patients are coded as sicker, because plans are supposed to receive more money for members expected to need more treatment. (cms.gov) That coding system is at the center of a separate fight around UnitedHealth Group, the biggest Medicare Advantage insurer. The company said in a securities filing in July 2025 that it was cooperating with Department of Justice investigations and had started a third-party review of its policies, practices and performance metrics. (medicaleconomics.com) Medical Economics reported that the Justice Department inquiry focused on diagnoses that increased federal payments to UnitedHealth’s Medicare Advantage plans. UnitedHealth said it stood by the “integrity of our Medicare Advantage business” and said its practices were consistent with federal rules. (medicaleconomics.com) Investors treated the rate notice as immediate good news for the sector. Reuters reported on April 7 that shares of Humana and UnitedHealth rose after the announcement, as analysts recalculated 2027 reimbursement higher than expected. (msn.com) The new rates now set up a split-screen year for the business: more federal money for Medicare Advantage plans in 2027, and more scrutiny over how some insurers document illness to qualify for that money. (cms.gov) (medicaleconomics.com)
