The federal government is cutting the average benchmark payments for 2025 Medicare Advantage plans by 0.2%, according to proposed rules released by the Biden administration on Wednesday.
The slight proposed cut is mostly the result of the second year of the government’s phased-in changes to the way Medicare Advantage insurers code and report the health conditions of their members — a process known as risk adjustment. However, the government estimates Medicare Advantage plans would still cumulatively receive $16 billion more in 2025 than they got this year, assuming insurers continue their intensive coding practices.
The latest proposals reinforce how the Biden administration, as well as the Trump and Obama administrations, have bolstered Medicare Advantage even though the program costs taxpayers far more than traditional Medicare and has caused considerable concern over inappropriate denials of care. And while Biden has done more to reform Medicare Advantage than prior administrations, this set of proposals — which comes during a presidential election year — is mild.