Medicare Advantage Managers Start 2025 Rate-Setting Process

The officials who run the Medicare Advantage plan program seem to have noticed that the plan issuers are unhappy this year.

The Centers for Medicare and Medicaid Services has put more generous rate-setting parameters in the new advance notice for the 2025 Medicare Advantage and Medicare Part D prescription drug plan bidding process.

CMS is predicting that average revenue per enrollee will increase 3.7%, from 1.03% this year, and that the average plan’s star quality rating will fall just 0.15%. A year ago, for 2024, CMS was predicting star ratings would fall 1.24%.

Mary Beth Donahue, president of the Better Medicare Alliance, and Mike Tuffin, the new president of America’s Health Insurance Plans, said they were still reviewing the advance notice.

But Susan Dentzer, president of America’s Physician Groups, an association for medical group practices, said it looks as if CMS is continuing efforts it started last year in a way that should promote stability.

What it means: CMS may be trying to keep insurer frustration with tough rules and higher-than-expected health care costs from crashing the Medicare plan market.

Key parameters: CMS said the “effective growth rate” — a health care cost increase measure based mainly on cost trends for traditional Medicare plan enrollees — will be 2.44% in 2025, up from 2.09% this year.