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CMS Finalizes 2025 Rate Increase For Medicare Advantage Plans

On Monday, April 1, the Centers for Medicare and Medicaid Services (CMS) finalized 2025 rates for Medicare Advantage (MA) and Part D prescription drug plans, with the CMS announcing a payment increase of 3.7 percent expected over 2024 for MA plans. There are concerns in the MA industry that the expected increase in payments will not cover the full rise of 2025 healthcare costs. This most likely will lead to a cut in benefits for Medicare Advantage plans, which will lead to more consumer cost share. This will be the first time in recent memory that benefits could decrease for MA. These changes could also reduce payments to providers, resulting in a risk to network size and participation. Providers may argue they’ll be more bogged down in paperwork to document quality measures versus taking the time to care for their patients. A bright spot for consumers was the announcement of changes to the standard Part D drug benefit required by the Inflation Reduction Act of 2022, including capping annual out-of-pocket costs for people with Medicare Part D at $2,000 in 2025. According to the CMS, the federal government is projected to pay between $500 and $600 billion in Medicare Advantage payments to private health plans in 2025.

What Does This mean for Brokers and Agents?

While this announcement doesn’t mention brokers directly, the overall financial pressures on the insurers could lead to consequences that indirectly affect broker compensation. We’ll keep our ears to the street and keep you posted as we learn more about potential broker compensation changes. Agility is constantly updating our agent partners on changes in the health insurance industry so that you have the best information available to help your clients. We offer top commissions, training, administrative support and many other services to help you succeed. Find out how to partner with Agility by contacting us at 866-590-9771.

This information is confidential and intended solely for broker use. Distribution to Medicare beneficiaries is not permitted.