CMS proposes small increase in Medicare Advantage payments

The Obama administration announced on Friday a proposed payment increase to insurers of 1.35 percent on average in 2017 under the Medicare Advantage program. 


The modest increase is a contrast to several recent years when the Centers for Medicare and Medicaid Services (CMS) proposed a cut to average payments.

The announcement of the Medicare Advantage payments is a subject of intense lobbying from insurers and is also watched closely by lawmakers in both parties who oppose cuts to a program in which many of their constituents are enrolled. 

The number of lawmakers pressing the CMS against cuts to the program has been rising in recent years. This year, 61 senators and 308 House members in both parties signed letters opposing cuts.

One of the Republican criticisms of ObamaCare was that it cut payments under Medicare Advantage, where the government contracts with private insurers to provide coverage as an alternative to traditional Medicare.  

However, the administration points out that enrollment in Medicare Advantage has continued to grow since ObamaCare was signed into law in 2010. Added benefits in Medicare Advantage, compared to traditional Medicare, have helped make the program popular with seniors.  

“Medicare Advantage has reached record high enrollment each year since 2010,” the CMS said in a statement. 

There are now 17.1 million people enrolled in the program, or about 32 percent of all Medicare enrollees. 

The CMS also says it is responding to feedback from some insurers to adjust the ratings system for insurance plans to take into account the socioeconomic status of enrollees. Some plans had concerns that they were being unfairly penalized for serving lower-income enrollees.