Medicare Advantage Pay Raise: Trump Administration Announces Small Increase
- The Centers for Medicare & Medicaid Services (CMS) announced plans to increase payments to Medicare Advantage plans by less than 0.1% on average for 2027, a figure significantly...
- Analysts at Wall Street firms had predicted payment increases ranging from 4% to 6%.
- The news follows recent changes to Medicare Advantage rules that are expected to redistribute $13 billion to insurers, as reported by STAT News in November 2025.
Medicare Advantage Payments to Rise Less Than 1% in 2027
The Centers for Medicare & Medicaid Services (CMS) announced plans to increase payments to Medicare Advantage plans by less than 0.1% on average for 2027, a figure significantly lower than industry expectations. The announcement, detailed in a CMS fact sheet released January 26, 2026, sent shockwaves through the health insurance market.
Analysts at Wall Street firms had predicted payment increases ranging from 4% to 6%. However, a lower-than-expected measure of Medicare spending drove the CMS decision. Following the announcement, shares of major Medicare Advantage insurers experienced substantial declines in after-hours trading:
- UnitedHealth Group fell more than 9%
- Humana fell more than 9%
- CVS Health fell more than 9%
The news follows recent changes to Medicare Advantage rules that are expected to redistribute $13 billion to insurers, as reported by STAT News in November 2025.