Medicare Advantage payments to rise slightly

The Obama administration locked in a smaller-than-expected increase in Medicare Advantage payments for next year. Health insurers offering Medicare plans will see payments increase by about 0.85 percent. The Obama administration had initially proposed raising payments by about 1.3 percent. CMS acknowledged in its regulation that it had made a technical error when calculating the proposed payments. CMS also approved a controversial change to Medicare Advantage’s retiree program. Federal officials have argued the retiree program doesn’t have the competitive bidding faced by other plans, and are now planning to replace it with a new formula using standardized county rates. The administration said it is moving forward with the new model, while giving insurers extra time to review the data that will be used for the payments.