Humana Braces as CMS Proposes 0.9% Medicare Advantage Payment Increase

Humana braces as CMS proposal pins Medicare Advantage payments near flat

Humana and its peers face immediate pressure from a Centers for Medicare and Medicaid Services (CMS) proposal that largely freezes Medicare Advantage (MA) payment growth, a move that reshapes plan design and network decisions as beneficiaries shop coverage during the current short open-enrollment window. CMS proposes a 0.9% increase in MA payment rates for 2027 versus 2026 — about $700 million in payments to plans — far below industry expectations of roughly 4%–6%. Insurers warn the smaller update could force benefit trimming or market exits as firms reprice premiums and reassess provider networks.

The proposal matters for Humana because CMS rates determine how much insurers can offer in benefits and whether they can sustain broad networks, supplemental services and drug coverage on competitive premiums. Medicare Advantage enrollment continues to grow, with KFF reporting that 54% of Medicare beneficiaries — about 34.1 million people in 2025 — are in MA plans, increasing the stakes for large national firms that rely on scale. In this environment, Humana must weigh preserving benefits against raising premiums or narrowing formularies to keep plans solvent and attractive to members.

Heightened competition amplifies the risk of membership churn that affects plan-level financials and patient access. UnitedHealthcare signals potential losses of 1.3 million to 1.4 million MA members in 2026 as beneficiaries shop plans, showing how quickly market share can shift when payment policy changes. For Humana, even modest enrollment flows can alter network leverage and clinical program investments, with downstream effects on care coordination, provider contracts and consumer access to particular drugs or specialists.

Regulatory tweaks on Part D and additional MA rules add complexity

CMS also proposes other Part D and MA policy changes alongside the payment update, prompting insurers to model a range of scenarios for drug formularies and benefit design. Industry groups and analysts tell media outlets such as CNBC that these simultaneous moves heighten the chance insurers narrow offerings or exit less profitable counties.

Consumers urged to compare plans during enrollment window

Experts and consumer advocates emphasize that beneficiaries should actively compare networks, drug formularies and premiums during the current open-enrollment period, saying policy shifts could reduce plan choice or benefits in some markets. Observers including Philip Moeller urge seniors to reassess coverage now, since insurer responses to CMS proposals will play out quickly in the coming plan year.