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The Trump administration plans to increase payments to next year’s Medicare Advantage plans by less than 0.1% on average — far below what the industry had expected.
The Centers for Medicare and Medicaid Services, also proposed to restrict further how insurers can code the illnesses of their Medicare Advantage enrollees.
These moves are probably necessary given MA costs Medicare more than traditional coverage as opposed to the planned savings.
HOWEVER, retirees using MA may be in for a shock. Higher premiums, lower benefits or both and possibly in some cases, insurers dropping out of the market.
Watching your medical expenses and thinking about alternatives to MA during 2026 may be prudent.
With such changes or even close to them, it won’t be business as usual for Medicare Advantage plans.
I believe the largest impact will be in more rural markets. Here in rural Iowa, we see companies offering the MA plans, but providers dropping from ALL MA plans.
The impact will also hit those with a dual plan and simply push cost to local Medicaid programs.
Are the providers dropping MA not taking Medicare G?
It’s not a matter of taking Medigap plans. As long as provider has not entirely dropped out of Medicare (rare), Medigap is automatic. There is no in or out.
It will be interesting to see how this plays out. We are covered by my wife’s NYC retirees’ plan (Aetna MA). Costs are very minimal and we both also receive Part B premium and IRMAA reimbursement. The City tried to make changes to our coverage 3-4 years ago that would have increased our costs but the courts ruled in our favor on the basis that both sides are contractually bound to the negotiated agreement because both sides made concessions that they might not have made if they had a crystal ball. I’m sure this will impact negotiations for current employees but it appears that we will be okay.