2026 Medicare Advantage and Part D Rates Include $25 Billion Increase to Health Insurers

“We are disappointed that the administration failed to take more direct action to reduce excess payments from upcoding. That said, we commend them for completing the risk adjustment phase-in.” 

Washington, D.C. (April 8, 2025) – Mark E. Miller, executive vice president of health care at Arnold Ventures, issued this statement after the Centers for Medicare & Medicaid Services (CMS) released finalized payment updates for Medicare Advantage and Part D:

“At a time when the federal government is striving to eliminate inefficiencies and rein in wasteful spending, the CMS 2026 Medicare Advantage (MA) rate notice includes a $25 billion increase in payments to insurers next year. This is on top of the tens of billions of dollars in excess payments they already receive annually— more than $40 billion from insurers’ coding practices alone. 

“With more than half of all beneficiaries enrolled in an MA plan, it is critical that the administration and Congress do more to address the well-documented waste, fraud, and abuse within the program. Insurers will continue their scare tactics, but the fact is that they will see higher payments next year while at the same time continuing to receive billions in overpayments that threaten the long-term sustainability of the Medicare program.

“We are disappointed that the administration failed to take more direct action to reduce excess payments from upcoding. That said, we commend them for completing the risk adjustment phase-in that began in 2024. These important changes will help mitigate the financial incentives for insurers to engage in abusive practices such as exaggerating health conditions of patients to secure higher payments— in some cases even coding diagnoses they receive no care for.”