CMS' 2025 Medicare Advantage rates lower than expected, Humana says

CMS' proposed Medicare Advantage rates for 2025 are lower than Humana predicted, the company said in a filing with the Securities and Exchange Commission Feb. 5.

CMS published its proposed Medicare Advantage payment rates for 2025 Jan. 31. The proposed rates would cut benchmark payments to the program by around 0.2%. 

Plans should expect to see 3.7% higher revenue overall, with an MA risk score trend of 3.86% — the average increase in risk adjustment payments year over year — offsetting risk model revisions and a projected decline in star rating bonuses, the agency predicted. 

In its filings, Humana said the proposed rate, though lower than expected, would not affect its projected 2025 earnings. CMS proposed lower cost growth predictions than Human expected "in light of higher medical cost trends experienced across the industry," the company said in its filings. 

Humana and other insurers have warned of rising medical costs in Medicare Advantage, driven by rising utilization rates. Humana posted a $541 million loss in the fourth quarter of 2023, driven by what executives called unprecedented increases in MA spending. 

The proposed notice is open for comment until March 1, and CMS will publish its final rate announcement on or before April 1. In its filing, Humana said it and other industry players are expected to raise concerns with the agency over the rate notice. 

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