April 1, 2024 Washington, DC — Statement from Katie Smith Sloan, president and CEO, LeadingAge, the association of nonprofit, mission-driven providers of aging services on Payment Updates for 2025 Medicare Advantage and Medicare Part D Programs: 

“In spite of the concerns expressed by plans, and several Congressional members about the alleged inadequacy of the 2025 rates, the Centers for Medicare and Medicaid Services (CMS) finalized an average 3.7% rate increase for the Medicare Advantage (MA) plan rates in 2025. MA’s share of Medicare enrollees is projected to grow. In less than a decade, per Congressional Budget Office projections, the share of Medicare beneficiaries enrolled in MA will rise to 61% – including both newly eligible older adults as well as those who have switched to MA from traditional Medicare.

We must address the fact that CMS pays more for Medicare coverage provided to beneficiaries through MA plans (estimated to be 20.1% higher according to MedPAC’s January 2024 Medicare Advantage Status Report) than fee-for-service (FFS) Medicare, while these overpaid plans pay providers like skilled nursing facilities and home health agencies less than they would receive to provide the same level of care in Medicare FFS. Action is warranted. These inadequate rates paid by the MA plans destabilizes the financial health of provider organizations more broadly. Policymakers must act before we find few providers remaining to serve the more than 65 million Medicare beneficiaries, including the nearly 33 million who now receive their Medicare benefits via an MA plan as of January 2024. Overpayments to plans also siphon off funds faster from the Medicare Trust Fund, leading to earlier insolvency concerns. The market has changed, and payments must be changed to reflect this new normal.

Medicare Advantage must work for all: beneficiaries, providers, taxpayers and plans. Its beneficiaries deserve to receive the care they need, and providers, who deliver it, deserve to be paid for services they deliver in a financially sustainable way.”

Learn more about the proposed rate increase and other developments in our Medicare Advantage serial post.