Why one payer CEO feels good about CMS' Medicare Advantage rates

Clover Health CEO Andrew Toy feels good about CMS' 2025 Medicare Advantage rates. 

The final 2025 rates, published April 1, include a slight decrease in benchmark payments. Payer industry groups have decried the rates, saying they are insufficient to cover rising costs in the Medicare Advantage market. 

In an April 3 LinkedIn post, Mr. Toy wrote that consistent with CMS, Clover Health did not see elevated Medicare Advantage costs in the fourth quarter of 2024. 

In its final rate notice, CMS wrote that it was aware of reports from various stakeholders that MA costs were trending above fee-for-service rates at the end of 2023. 

"We are not aware of all of the specific drivers accounting for the experience of these MA organizations. We have reviewed incomplete fourth quarter 2023 Medicare FFS incurred experience and it is consistent with our projections," CMS wrote April 1. 

Mr. Toy wrote that other MA organizations could be struggling to manage costs in PPO plans, an area where they have "chased growth" in the past few years. 

"For Clover — where we have always been PPO first — we have Clover Assistant and our Home-Care practice, which serve as the basis of our platform and we've demonstrated a differentiated ability to manage that PPO cost," Mr. Toy said. 

In the future, CMS rates will match fee-for-service cost trends, not Medicare Advantage trends, Mr. Toy wrote. 

Clover Health had 81,000 Medicare Advantage members at the end of 2023. The company, founded in 2014, has yet to turn a profit. 

"Ultimately, Clover's advantage sits around believing the future of Medicare is hybridizing the benefits (Vision, dental, grocery etc) of MA with the wide network of Original Medicare. This rate notice emphasizes why we feel we're in a good place to achieve that," Mr. Toy wrote. 

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