Medicare Advantage Plan Rate Increase Proposed for 2017

Insurers offering Medicare Advantage plans may see a slight increase in rates for 2017. According to the Centers for Medicare and Medicaid Services, federal regulators proposed an increase of approximately 1.35% over last year’s rates.

Insurers such as Humana and UnitedHealth are two of the nation’s largest insurers offering Medicare Advantage plans. The plans make up a substantial share of each company’s earnings, and insurers expect this market to grow as the number of people reaching age 65 continues to steadily increase.

In a pending deal, Aetna is expected to acquire Humana; partly because of the value of their Medicare Advantage portfolio.

The rate increase may not benefit all insurers, as the regulatory rate adjustments favor companies with higher numbers of low- income enrollees, and who are “full-benefit duals”, meaning they qualify for both Medicare and Medicaid.

The final rates for 2017 Medicare Advantage plans won’t be out until April, however, analysists say that significant changes could still occur between now and that time.