CMS Finalizes 2025 Rates for Medicare Advantage and Part D Plans
Market shares have fallen for CVS, UnitedHealth Group and more following the announcement.
medicare advantage and stethoscope © NajmiArif - stock.adobe.com
A change in Medicare Advantage announced Monday has sparked concern by trade groups and caused stocks of leading health insurers to fall. Health insurance trade groups such as AHIP, as well as stocks from CVS, UnitedHealth Group and Centene all reported falling stocks Tuesday.
CMS has finalized the 2025 calendar year rate for Medicare Advantage and Medicare Part D Prescription Drug Programs.
Medicare Advantage is a privately run healthcare insurance plan contracted by Medicare. More than half of Medicare beneficiaries are enrolled in Medicare Advantage, according to KFF.
The announcement states that for the 33 million Medicare Advantage beneficiaries, payment rates from the government to Medicare Advantage plans are expected to increase by 3.7%, or more than $16 billion, from 2024 to 2025. In addition, in 2025, the federal government will pay between $500 to $600 billion to private health plans. The Medicare Advantage benchmark rate will also decrease by 0.16% in 2025.
President and CEO of AHIP Mike Tuffin released a statement in response to Monday’s announcement.
“These policies will put even more pressure on the benefits and premiums of 33 million Medicare Advantage beneficiaries who will be renewing their coverage this fall,” Tuffin said in an AHIP press release. “It is important to note that the Medicare Advantage and Part D programs are already undergoing a number of significant regulatory and legislative changes. Moreover, cost of caring for Medicare Advantage beneficiaries is steadily rising.”
At the beginning of March, the AHIP also wrote a letter that compiled insurer concerns and addressed it to CMS.
“The estimate does not reflect higher utilization and cost trends in the healthcare market that are expected to continue into 2025,” Tuffin writes in the letter. “Based on a recent AHIP survey, MA plans cost growth in 2023 was more than 7%, on average, in all quarters of the year and spiked above 8% in the fourth quarter."
CMS is accepting comments and requests for Medicare information until May 29.
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