Medicare Advantage Pay Raise: Trump Administration Announces Small Increase

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.