Carriers & the market
CMS Set 2027 Medicare Advantage Federal Payments Nearly 5 Percent Higher Than 2026 After Postponing a Risk Adjustment Update
The April 2026 rate announcement raised payments to Medicare Advantage insurers by about 26 billion dollars above 2026 levels, largely because CMS delayed a planned update to the formula that determines how much plans receive per enrollee.
By the Goodsurance editorial teamSeptember 13, 2026
When CMS published its final 2027 Medicare Advantage rate announcement in April 2026, the payment levels came in considerably higher than the agency had initially proposed. Average per-enrollee payments to Medicare Advantage plans will rise by nearly 5 percent for 2027, roughly double the rate outlined in the January advance notice, according to a KFF analysis.
In total, Medicare Advantage plans will receive approximately 26 billion dollars more from the federal government in 2027 than in 2026. About 13 billion dollars of that increase reflects upward trending in risk scores, the formula CMS uses to adjust payments based on how sick a plan's enrollees are.
Medicare Advantage federal payments will rise nearly 5 percent in 2027, adding about 26 billion dollars over 2026 levels, after CMS postponed a key risk adjustment model update.
A central reason for the larger-than-proposed increase was CMS's decision to delay an update to its risk adjustment model. The proposed update would have drawn on more recent data to better reflect current treatment patterns and costs. By postponing it, CMS gave insurers more time to adapt to changes already made to the model between 2024 and 2026.
CMS did finalize one policy aimed at curbing potential overpayments. Plans can no longer receive higher risk-adjusted payments based on diagnoses found only in chart reviews that are not linked to an actual provider visit. This change is expected to reduce average payments by about 1.5 percent. CMS also narrowed the policy slightly by exempting enrollees who switch plans mid-year.
How those federal payment levels translate into 2027 consumer-facing premiums and supplemental benefits will become clearer when CMS releases the full plan landscape files in the second half of September.
In plain words
The government pays Medicare Advantage health plans a set amount each year for each person enrolled. For 2027, those payments will go up about 5 percent. That is about 26 billion dollars more than in 2026. Part of that increase comes from rising health scores for patients, which means plans get paid more. Medicare also delayed a change that would have lowered some payments. A new rule does cut payments a little: plans no longer get paid more for diagnoses found only in chart reviews that were not tied to a real doctor visit. The final plan premiums and benefits for 2027 will be posted later this month.
Understand the basics first
Source: KFF
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