Overview
- CMS, which finalized the 2027 update Monday, set a 2.48% average payment increase that adds more than $13 billion for private Medicare plans.
- A Medicare official said changes to risk assessment raise payments by about 2.5 percentage points, bringing the effective increase close to 5%.
- Insurer shares jumped in after-hours and Tuesday trading, and Bank of America lifted price targets for UnitedHealth, Humana, Elevance and Molina.
- CMS kept the 2024 risk-adjustment model for 2027 and will exclude diagnoses from unlinked chart reviews when calculating risk scores, with an exception for plan switchers.
- The move reversed January’s near‑flat proposal after insurer pushback and now gives plans more room to set 2027 bids, which can influence premiums and extra benefits like dental or vision.