CMS Finalizes Average 3.7% Rate Increase for MA Plans in 2025
Although under pressure from Medicare Advantage (MA) plans and some Congressional members to pay MA plans more in 2025, CMS finalized MA plan 2025 rates at its proposed 3.7% level based upon more complete data on utilization and growth rate on April 1. When the 3.7% increase was proposed, plans expressed concerns that the 3.7% increase does not reflect current utilization, inflation, and risk score growth; and as such, they argued it resulted in a cut of 0.16% because health risk scores have increased more than the rate increase to 3.86%. The final payment announcement and rate accounts for growth in Medicare FFS costs health risk scores, and incorporates utilization data from the fourth quarter of 2023, which does not show higher utilization patterns than anticipated. The final rate reflects an average expected increase across plan though there will be variation in the specific amounts plans receive based upon a variety of plan-specific factors. Therefore, some plans will receive more and others less in 2025 than 3.7%. CMS does not expect beneficiary premiums or benefits to be negatively impacted by these changes. Members can read LeadingAge’s statement here on the 2025 Final MA Rate Announcement.