BALTIMORE—The Centers for Medicare and Medicaid Services (CMS) released its calendar year (CY) 2026 advance notice for the Medicare Advantage (MA) and the Medicare Part D prescription drug programs, which would update payment policies for these programs. This release complements the contract year 2026 MA and Part D proposed rule that CMS released in November.
If finalized, these policies and updates aim to continue fiscally responsible updates to MA payments. Additionally, CMS said government payments to MA plans are expected to increase on average by 4.33% from 2025 to 2026. CMS is concurrently releasing its draft CY 2026 Part D redesign program instructions, which aim to continue implementing the Medicare Part D program redesign.
“CMS has worked to ensure that people with Medicare Advantage and Medicare Part D have access to stable and affordable offerings,” said Chiquita Brooks-LaSure, administrator for CMS. “(This) advance notice continues CMS’ efforts to provide access to affordable, high-quality care in Medicare Advantage while being a good steward of taxpayer dollars. We are also continuing implementation of the Inflation Reduction Act, ensuring people with Medicare Part D have more affordable coverage for their medications.”
The 2026 advance notice would include annual, technical updates to MA and Part D in an effort to ensure plan payments are up-to-date and accurate. CMS aims to complete a phase-in improvement plan for MA risk adjustment models and growth rate calculations that are related to medical education costs, as well as other technical improvements. In 2023, CMS announced plans to complete this phase-in over a three-year period, which would provide predictability for plans and providers while implementing updates that ensure people with MA can continue to access the care they need and taxpayer dollars are well spent.
The federal government is expected to spend $9.2 trillion over the next decade on MA payments to plans—$1.3 trillion of those MA payments are MA rebate dollars used for MA supplemental benefits and premium buy-downs. CMS said these payments need to be accurate in order to prevent wasteful spending. For 2025 plans, MA offerings for people with Medicare remained stable—including premiums, supplemental benefits and coverage options. Additionally, MA rebates have stayed stable, which indicates that MA payments have remained adequate during the phase-in of these updates. CMS said pausing the risk adjustment model phase-in would result in $3.4 billion in additional payments to MA plans, and pausing the technical adjustment to growth rates regarding medical education costs would add $7 billion, which could result in an additional $10.4 billion in unnecessary payments to MA plans in 2026.
“The advance notice continues a data-driven approach that ensures MA payment is accurate, drives competition and supports accountable care, shifting the focus to managing care and improving outcomes,” said Meena Seshamani, deputy administrator of CMS and director of the Center for Medicare.
CMS said the CY 2026 rate announcement and the CY 2026 Part D redesign program instructions will be published no later than April 7, 2025. The CY 2026 advance notice is available here, and a fact sheet discussing CY 2026 advance notice provisions in accessible here.