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2025 Medicare Advantage Proposals: A Comprehensive Look at the Proposed Changes

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Zara Nwosu
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2025 Medicare Advantage Proposals: A Comprehensive Look at the Proposed Changes

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The Centers for Medicare & Medicaid Services (CMS) recently released new proposals concerning Medicare Advantage for 2025, opting for a cautious approach in light of the impending election year. This careful approach aims to steer clear of controversy and potential backlash during this politically sensitive period. The particulars of these proposals, along with their impact on Medicare Advantage, are certainly worth a closer examination.

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Key Proposals for 2025 Medicare Advantage

As per the CMS press release, the proposed payment update aims to bolster the strength and stability of Medicare Advantage and Part D programs. A 3.7% increase in MA payments from the government to MA plans has been proposed, translating to an increase of over $16 billion from 2024 to 2025. Furthermore, CMS has detailed improvements to the structure of the Medicare Part D drug benefit for CY 2025, which is expected to lower drug costs for millions of Medicare beneficiaries.

Proposed Changes and Impact

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CMS has provided the 2025 Advance Notice of Methodological Changes for Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies. The proposed policies are projected to result in a net increase in MA payments to plans on average year over year in CY 2025. However, the proposed base payment rate for Medicare Advantage for the calendar year 2025 has been reduced, marking the second consecutive year of lower benchmark rates.

Despite this, the Biden administration is committed to strengthening Medicare with a proposal to raise the overall Medicare Advantage payments by 3.7% for 2025, amounting to roughly a $16 billion increase. This includes measures to ensure accuracy in payments, cracking down on predatory marketing, and preventing inappropriate care denials.

Public Response and Future Expectations

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While the proposed rule is anticipated to generate some resistance from the health insurance industry, it aims to ensure accurate payments and is not expected to result in benefit cuts. Public comments on the 2025 Advance Notice are open until March 1, 2024. The final 2025 rate announcement is expected to be published by CMS by April 1, 2025.

The Medicare Trustees project that by 2025, about 62% of Medicare Parts A B spending will be on Medicare Advantage, indicating a continuous growth trend. This proposed rule is just the latest in a line of actions taken by the Biden administration to shape the future of Medicare Advantage.

Conclusion

In conclusion, these proposed changes reflect the Biden administration's commitment to strengthening Medicare and ensuring its beneficiaries' interests. While some opposition from the health insurance industry is expected, the primary goal of these proposals is to ensure accurate payments and safeguard beneficiaries. The coming months will reveal how these proposals are received and the impact they will have on Medicare Advantage in 2025 and beyond.

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