Medicare Advantage insurers will collect extra bonuses
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Medicare Advantage insurers could get hundreds of millions of dollars in bonuses this year after federal officials said they would recalculate the program's quality ratings.
Why it matters: The move is a win for insurers like UnitedHealth and Humana, who've threatened to cut benefits available to seniors next year in the face of rising costs and decreased base payments.
State of play: The Centers for Medicare and Medicaid Services said in a memo on Thursday it would redo insurers' performance and quality measures following two federal court decisions that ruled its original calculations inaccurate, the Wall Street Journal first reported.
- The Biden administration has not yet decided whether to appeal, the memo said.
Catch up quick: MA plans can earn up to five stars based on more than three dozen quality metrics designed to guide seniors to the highest-performing plans.
- The bonus payments are intended for extra benefits that attract seniors to those plans.
Reality check: The extra money is likely a one-off, as regulators will probably try to fix the quality calculation issue going forward, according to an analysis from Raymond James.
- More than half of Medicare enrollees now get their coverage from Medicare Advantage plans, which experts say are overpaid and cost taxpayers tens of billions of dollars more than they should.
What's next: Insurers had to submit their 2025 plan offerings by June 3, but regulators will now accept submissions until June 28.
