Radar on Medicare Advantage

Since the April 3 confirmation of Mehmet Oz, M.D., as CMS administrator, news from the agency has been emerging at a dizzying pace, including the releases of the final Medicare Advantage and Part D rule for plan year 2026, a host of other rules impacting Medicare providers, the separate MA final rate notice, and Oz’s “Vision for CMS.” But industry experts are looking just as closely as what’s left unsaid in these announcements to tell us about the direction of government-sponsored programs under President Donald Trump’s Make America Healthy Again agenda.  

“When we think about what was in and what was out [of the 2026 final rule], many professionals saw what was out and made a conclusion before they realized the speed and other mechanisms by which new rules are undoubtedly going to be made quickly in the next months,” points out Melissa Newton Smith, founder of Newton Smith Group.

The State Health Insurance Assistance Program (SHIP) was designed to offer free, unbiased information to Medicare beneficiaries about their coverage options, serving as a counter to agents and brokers who get paid to sell Medicare Advantage plans and other coverage. But a recent study published in JAMA Network Open revealed major gaps in the accuracy and completeness of information provided to seniors by SHIP, and the findings were particularly grim for Medicare-Medicaid dual eligibles. Those findings are especially timely as CMS Administrator Mehmet Oz, M.D., at his Senate confirmation hearing signaled an interest in reforming Medicare sales. Also, the Medicare Payment Advisory Commission recently discussed SHIP as a potential alternative to agents and brokers. 

The study employed mystery shoppers to evaluate the quality of counseling sessions across 131 SHIP sites in 16 states. Shoppers either visited SHIP sites in person or contacted them via phone or video calls. Of the 306 mystery shopping encounters, nearly 40% were not completed, largely due to a lack of return calls from SHIP counselors, which researchers said could indicate capacity constraints. All of the in-person shops, meanwhile, were completed.

On April 4, CMS released its highly anticipated rule finalizing Medicare Advantage and Part D program changes for 2026 that were introduced under former President Joe Biden. Nearly 300 pages shorter than the November version proposed by CMS, the final rule left out 12 sections altogether, including one seeking to expand coverage of anti-obesity medications and others that would have impacted MA plans' marketing practices and use of artificial intelligence, among other things. Industry experts say that doesn’t mean the agency won’t revisit those topics and put its own stamp on them under President Donald Trump.

“What was in [the final rule] was very little. Other than closing the chapter for now on GLP-1s and a few little relatively innocuous pieces around dual eligibles, most everything else was tabled,” remarks Melissa Newton Smith, founder of Newton Smith Group.

In its final payment update for Medicare Advantage and Part D plans, CMS under President Donald Trump projected a higher-than-expected revenue increase of 5.06% — which can be even higher depending on plans’ risk scores — providing much-needed relief for MA insurers that have struggled to keep up with elevated costs and maintain margins. But industry experts caution plans against getting too comfortable, as the increase was driven by higher fee-for-service (FFS) Medicare costs that may continue to rise.

Released on April 7 as part of CMS’s Announcement of Calendar Year (CY) 2026 Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies, the rate increase is the “strongest in the last 10+ years,” just barely exceeding the prior high of 5.00% in 2023, wrote Bank of America Global Research analyst Joanna Gajuk in an April 7 research note. But rather than considering an estimated 7.16% increase with underlying coding trend, she suggested relying on 5.06% as the “cleaner number” given that “coding lift…can vary significantly by company.” Like the Advance Notice released by CMS in January under President Joe Biden, the final rate notice also estimated an average risk score increase of 2.10%. “[W]e have historically assumed a 1-2% lift from coding,” wrote Gajuk.

Dayton, Ohio-based CareSource, one of the largest not-for-profit operators of managed Medicaid plans, has acquired Commonwealth Care Alliance (CCA), a not-for-profit insurer based in Boston with a long history of serving Medicare-Medicaid dual eligibles. The deal will enable struggling CCA to meet state funding requirements and “move forward to strengthen and enhance care for CCA’s members and patients,” a CareSource spokesperson tells AIS Health, a division of MMIT.

“As nonprofit, mission-driven organizations, CareSource and CCA share a commitment to putting members at the center of everything they do,” says the spokesperson. “CareSource will bring its strong business fundamentals, operational efficiency, scale and complex care capabilities alongside CCA’s deep expertise in delivering community-centered, disability-competent care in Massachusetts to improve health outcomes for individuals with complex health needs.”