The Centers for Medicare & Medicaid Services (CMS) is shaking things up again—this time with finalized policies for Medicare Advantage (MA) and Part D Prescription Drug Programs for 2026.
If you’re a Medicare enrollee, work in healthcare, or invest in the industry, these updates are more than just fine print. They mark a major shift aimed at reinforcing program integrity and enhancing access to high-quality care.
Strategy
The latest CMS actions build on the earlier CY 2026 final rule released in April. Together, these updates represent a targeted move to improve efficiency and accountability within Medicare Advantage and Part D. Think of it as a double-down on cracking down waste while making sure seniors still get solid, dependable care.
What’s the big picture? CMS is looking to fine-tune the system—not only by tweaking payment formulas but also by reinforcing safeguards against fraud, and recalibrating how insurers are paid for taking on higher-risk patients.
Payments
One of the most talked-about changes is the 5.06% average payment increase for Medicare Advantage plans in 2026. That’s huge when you compare it to the 2.2% proposed back in January—or worse, the 0.2% decrease announced for 2025.
This jump is no accident. CMS recalculated its numbers using updated data through the end of 2024, responding to rising medical costs and insurer feedback. It’s a clear sign that the agency is trying to balance rising healthcare needs with economic realities.
Insurers
This rate increase directly benefits private insurers managing Medicare Advantage plans. Companies like UnitedHealth Group, Humana, CVS Health, and Elevance Health saw their stock prices rise following the announcement—a sign that the market views this as a financial win.
Why does this matter? These insurers play a huge role in delivering care to millions of Medicare beneficiaries. With more money in the pot, they could potentially invest in better care management, technology, or even reduce some member costs.
Risk
Another key component of the 2026 policies is the continued rollout of a new risk adjustment model. This enhanced model, first introduced in the 2024 rate notice, is being phased in over three years.
Its goal? To more fairly compensate plans that serve individuals with greater health needs—people who are often older, sicker, or dealing with chronic conditions. By aligning payments more closely with patient complexity, CMS aims to promote equity and discourage risk-avoidance behavior.
Integrity
At the heart of it all is a renewed focus on program integrity. CMS is prioritizing accountability by tightening rules and expectations for how plans operate. This includes more technical adjustments, better tracking of services, and clearer performance benchmarks.
For seniors and people with disabilities, this means more oversight behind the scenes, ideally leading to better care delivery and less red tape when accessing needed treatments.
Whether you’re an enrollee, provider, or payer, these changes reflect a wider strategy by CMS to keep Medicare sustainable while making sure it remains both affordable and accessible.
FAQs
What is the Medicare Advantage payment increase for 2026?
CMS finalized a 5.06% average increase in payment rates.
Why did CMS raise Medicare Advantage payments?
To reflect rising costs and updated insurer data.
What is the new risk adjustment model?
A model to align payments with patient health needs.
Which companies benefit from the CMS updates?
UnitedHealth, Humana, CVS, and Elevance Health.
How do these changes affect Medicare enrollees?
They aim to ensure better, more efficient care access.
