RISE summarizes recent regulatory-related headlines and reports.
BMA: Proposals in 2027 MA Advance Notice threaten higher costs, fewer benefits for seniors
Better Medicare Alliance (BMA), a leading research and advocacy organization that supports Medicare Advantage, warns that the Centers for Medicare & Medicaid Services’ (CMS) proposed payment policies will add the instability of Medicare Advantage for seniors.
CMS’ has proposed 0.09 percent payment increase, a move that doesn’t keep pace with rising medical costs and utilization. It essentially functions as a cut, said Mary Beth Donahue, president and CEO of BMA, in a statement. The result will lead to higher out-of-pocket costs, reduced benefits, and fewer coverage options for seniors beginning in October.
“President Trump has made clear that protecting Medicare is a priority,” Donahue said. “The Final Rate Notice is an opportunity to deliver on that commitment by ensuring payment policies that preserve stability, affordability, and choice for more than 35 million Medicare Advantage beneficiaries.”
In its formal comments to CMS, BMA urged the agency to revise its proposed growth rate because it is not adequate to cover rising medical costs. According to a new analysis by BRG, a one-percentage-point change in the growth rate translates to roughly $12 per member per month, or $144 per beneficiary annually, underscoring how small shifts can materially affect plan payments.
The BRG independent analysis also finds that proposed risk adjustment changes would reduce Medicare Advantage payments by an average of $324 per beneficiary per year, or $27 per month. However, certain states—including Florida, Georgia, Texas, Missouri, and Nevada—would likely face even steeper reductions.
CBO revised figures: Medicare Trust Fund will run out in 2040
The Congressional Budget Office (CBO) has updated its projections for the Medicare Trust Fund, and now states that the Hospital Insurance Trust Fund, which is used to pay benefits under Medicare Part A, will be depleted by 2040. Medicare Part A benefits cover inpatient hospital services, care provided in skilled nursing facilities, home health care, and hospice care. Previously the CBO estimated that the Trust Fund would run out in 2052. The latest estimates are based on the CBO’s demographic projections published in January, its economic and 10-year budget projections published on Feb. 11, and its long-term budget projections.
Report: State medical budgets will lose $665B under Big Beautiful Bill Act
While the federal government will save an estimated $714 billion, a new study by RAND finds that state Medicaid budgets will be reduced by $665 billion over the next nine years due to the provisions in the One Big Beautiful Bill Act. State general funds will be reduced by $86 billion.
RAND said that the impact of the law’s provisions will vary state by state, but most states will see reductions to their state Medicaid budgets. Twenty states will see reductions of five percent or more. In addition, work requirements and more frequent redetermination will have direct impacts on Medicaid enrollment by adding eligibility criteria and increasing administrative requirements.