On Monday, the Centers for Medicare & Medicaid Services (CMS) released 2027 Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies.

Payment Increase Exceeds Initial Expectations

The final policies in the calendar year 2027 Rate Announcement are projected to increase by 2.48% or over $13 billion in payments to MA plans.

When accounting for the estimated risk score trend in MA due to factors such as population changes and coding practices, this amounts to a 4.98% increase.

As per advance notice in January, the proposals expected a net average year-over-year payment increase of mere 0.09% versus the consensus of 4%-6%, translating to more than $700 million in additional payments to Medicare Advantage plans.

Key Companies With Exposure To Medicare Advantage

Alignment Healthcare, Inc. (NASDAQ:ALHC)

Centene Corporation (NYSE:CNC)

CVS Health Corporation (NYSE:CVS)

Elevance Health, Inc. (NYSE:ELV)

Humana Inc. (NYSE:HUM)

Molina Healthcare Inc.