There’s a famous scene in Star Wars: A New Hope where Luke Skywalker, Han Solo and company are trapped in a garbage compactor on the Death Star. The walls of the compactor slowly squeeze in, threatening to flatten the protagonists before they can get out. Opponents of Medicare Advantage are hoping that the federal government will do something similar to the private insurers who participate in the program.
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On January 31, 2024, the Centers for Medicare & Medicaid Services published its Calendar Year 2025 Advance Notice of payment changes to Medicare Advantage. Notably, the notice contained a payment cut of 0.16% relative to 2024, in which year rates were cut by 1.12% relative to 2023.
At a time when consumer price inflation remains elevated, at 3.1 percent per year, and costs for privately-insured health expenses is rising at 7 percent, why does CMS believe that Medicare Advantage plans should be paid less? Therein lies a story.
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