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Centers for Medicare & Medicaid ServicesCMS.gov News Room

FOR IMMEDIATE RELEASE
April 7, 2025

Contact: CMS Media Relations
(202) 690-6145 | CMS Media Inquiries [ http://go.cms.gov/media ]

*CMS Finalizes 2026 Payment Policy Updates for Medicare Advantage and Part D Programs*

Today, the Centers for Medicare & Medicaid Services (CMS) released the Calendar Year (CY) 2026 Rate Announcement for the Medicare Advantage (MA) and Medicare Part D Prescription Drug Programs that finalizes the payment policies for these programs. This release — combined with the CY 2026 MA and Part D final rule that was released on April 4 — makes annual routine and technical updates to the MA and Part D programs.

The actions taken by CMS help protect beneficiaries and taxpayers from waste, fraud, and abuse, while also driving access to high-quality, affordable healthcare through Medicare Advantage. By finalizing these payment policies, CMS is ensuring that Medicare Advantage continues to offer access to critical services in an efficient, accountable manner, further strengthening the program’s ability to serve beneficiaries.

Payments from the government to MA plans are expected to increase on average by 5.06% from 2025 to 2026. This is an increase of 2.83 percentage points since the CY 2026 Advance Notice, which is largely attributable to an increase in the effective growth rate. The method for setting the effective growth rate is set in statute and represents the average expected change in the benchmarks, used to determine payment for MA plans, based on the growth in Medicare per capita costs. The effective growth rate is 9.04%, which is higher than the estimate of 5.93% in the CY 2026 Advance Notice. This change is primarily due to the inclusion of additional data on fee-for-service (FFS) expenditures, including payment data through the fourth quarter of 2024, which was not included on account of the early Advance Notice publication.

In CY 2024, CMS initiated a three-year, phased-in approach for removing the medical education costs — related to services MA enrollees receive — from the historical and projected expenditures supporting the FFS costs that are included in the growth rate calculations. For CY 2026, CMS will complete the phase-in of the technical adjustment by applying 100% of the adjustment for MA-related medical education costs.

CMS is also completing a three-year phase-in of improvements to the MA risk adjustment model that the agency finalized in the CY 2024 Rate Announcement, with the first year of the three-year phase-in starting with CY 2024. CMS is committed to expanding access to affordable, high-quality care through Medicare Advantage, while also implementing measures to safeguard beneficiaries and taxpayers from waste, fraud, and abuse. These ongoing improvements support a sustainable program that benefits both current and future Medicare recipients.

CMS is concurrently releasing the Final CY 2026 Part D Redesign Program Instructions that continue to implement the redesign of the Medicare Part D program. These instructions contain a detailed description of, and guidance related to, changes to the Part D drug benefit in place for CY 2026.

The CY 2026 MA and Part D Rate Announcement may be viewed at https://www.cms.gov/files/document/2026-announcement.pdf.  

A fact sheet discussing the provisions of the CY 2026 Rate Announcement can be viewed at https://www.cms.gov/newsroom/fact-sheets/2026-medicare-advantage-and-part-d-rate-announcement.   

The Final CY 2026 Part D Redesign Program Instructions can be found at https://www.cms.gov/files/document/final-cy-2026-part-d-redesign-program-instruction.pdf.  

A fact sheet discussing the provisions of the Final CY 2026 Part D Redesign Program Instructions can be viewed at https://www.cms.gov/newsroom/fact-sheets/final-cy-2026-part-d-redesign-program-instructions.   

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