WASHINGTON — Federal regulators received a record number of comments on their proposal to keep Medicare Advantage rates flat next year, Trump administration officials said Tuesday during an industry event, as insurers continue to lobby heavily for higher reimbursement.
“We appreciate all the input. I mean, obviously there’s been a little bit more input this year than we typically get,” John Brooks, the CMS’ chief policy and regulatory officer, said during the Better Medicare Alliance’s summit in Washington, D.C.
In January, the Trump administration proposed an average rate bump of less than 0.1% for MA plans in 2027, along with tighter guardrails around how plans adjust for the health risks of their members.
The rule sparked uproar from health insurers and kicked off a full-court lobbying press from the industry. Insurers and MA associations have funded research, launched ads, rounded up signatures, met with government officials and submitted a barrage of unhappy comments to the CMS arguing the rule would be disastrous for payers and the seniors they serve.
Regulators received almost 47,000 comments on the rule during the input period ended Feb. 25 — an all-time high, according to Brooks.
In their comments, major MA carriers like UnitedHealth along with industry associations like the BMA and AHIP argued that the CMS ignored rising costs, resulting in a payment proposal underfunding MA.
The flat rate will be impossible for payers to absorb without another year of benefit cuts and plan exits, which will further constrain coverage options and benefits for the more than 35 million seniors in the privatized Medicare program, insurers say.
The main point of disagreement between the MA industry and CMS actuaries over the rule is just how sharply medical spending will increase next year — a projection measured by a metric called the effective growth rate, which has a huge effect on the final rate adjustment.
The 2027 payment proposal includes an effective growth rate just shy of 5%, down from 9% this year and much lower than many observers expected given dire comments from insurers about spiking spending.
Some stakeholders have questioned whether the CMS’ growth rate, which is based on data from traditional Medicare, was calculated correctly.
“Such a substantial downward adjustment requires a clear and transparent rationale ... which has not been provided,” the BMA wrote in its comment letter dated Feb. 25.
MA carriers have reason to be optimistic, however. Effective growth rates are normally higher in final payment rules than in proposed ones, given they reflect more recent Medicare data.
If the CMS bumps the effective growth rate by just 1 percentage point, payments to MA plans would increase by about $12 per member per month, according to an analysis by consultancy BRG commissioned by the BMA.
“A lot of dollars are at stake,” said John Barkett, BRG managing director and author of the report, at the BMA event. “We could see a pretty big swing in what plans would be paid.”
Along with a higher reimbursement rate, MA payers also want the CMS to postpone its proposal to exclude certain chart reviews from members’ risk scores, and more gradually roll out changes to how risk adjustment is calculated, according to comments on the rule.
Without additional dollars, payers say they’d have no choice but to further cut back on their MA offerings to shield margins before open enrollment for 2027 begins in October. That could exacerbate existing instability in the program. Roughly 2.9 million enrollees were forced to disenroll from their MA plan in 2026 due to plan terminations in their areas, according to a recent study published in JAMA.
Trump administration officials argue they’re squarely in support of MA, but are focused on improving payment integrity to ensure the long-term success of the program. Research suggests that the federal government is overpaying MA plans by tens of billions of dollars each year, largely due to plans overexaggerating their members’ health needs to inflate reimbursement.
“There needs to be stability and predictability. We understand that. That’s important to us,” Chris Klomp, the director of Medicare and a senior advisor to HHS Secretary Robert F. Kennedy Jr., said.
But “there has to be trust by beneficiaries. There has to be trust by our legislators on the Hill. They have to believe that we are being wise stewards of the taxpayer dollars which have been entrusted to us,” he added.
The CMS has been on defense regarding the rule since it was proposed. Still, Klomp thanked the MA industry for its input on Tuesday, and urged insurers to keep engaging with health officials.
“We’re grateful for it,” he said. “You help us see things, right? We don’t want to be in an ivory tower.”
