MA Advance Notice Does Not Offset Rising Medical Costs and Could Lead to Reduced Healthcare Value for Beneficiaries

Medicare Advantage (MA) payment per month per beneficiary could drop by an estimated 1.0% in 2025 if the Centers for Medicare & Medicaid Services (CMS) finalizes policies proposed in its Advance Notice, based on analysis by BRG utilizing its MA microsimulation model. CMS estimates a -0.16% payment update. BRG projects MA medical cost inflation will increase by 4% to 6% in 2025. When payments from CMS drop relative to expected medical costs, the value of supplemental benefits and reductions to premiums and cost sharing tends to fall.

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This research project was funded by Better Medicare Alliance.