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CMS just handed Medicare Advantage a 5% raise. Here’s what it means.
The final numbers are in: Medicare Advantage plans will see a 5.06% payment increase for 2026, jumping from CMS’s initial 2.23% estimate.
That’s a massive swing that surprised everyone.
But here’s what’s really happening beneath the surface:
📊 The effective growth rate jumped from 5.93% to 9.04%, driving most of the increase. Translation: Healthcare costs are rising faster than expected, and CMS is adjusting payments to match reality.
CMS also completed two critical technical fixes:
• Removed $7 billion in unnecessary medical education payments
• Fully implemented the 2024 risk adjustment model
• Closed loopholes in MA appeals processes
What didn’t make the cut? AI guardrails, obesity drug coverage requirements, and stricter utilization management rules.
The insurance industry lobbied hard, and it shows.
Here’s my take: This 5% increase gives MA plans breathing room, but the real story is what CMS left on the cutting room floor. No AI oversight means plans can continue using algorithms for coverage decisions unchecked. No obesity drug mandate means GLP-1 access remains a luxury benefit.
For the 31 million Americans in MA plans, this means stable benefits in 2026 but missed opportunities for expanded coverage.
The question isn’t whether 5% is enough. It’s whether CMS is moving fast enough to regulate an industry that’s increasingly driven by algorithms and profit margins.
What matters most: Will this extra funding translate to better care, or just better margins?
♻️ Repost if Medicare Advantage needs stronger guardrails on AI decision-making.
👉 Follow me, Jonathan Govette, for daily, real-time updates on healthcare technology and business news. LinkedIn Profile: https://www.linkedin.com/in/jonathangovette/
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Author:
Jonathan Govette is a seasoned healthcare and technology executive with more than two decades of experience building, scaling, and advising digital health companies. He is the Co-Founder and CEO of Oatmeal Health, an AI-driven Lung Cancer Screening and Diagnostics company focused on expanding access to early detection for underrepresented populations, particularly patients served by Federally Qualified Health Centers and value-based health plans.
With a background in engineering, product development, and strategic partnerships, Jonathan has founded and led multiple health technology ventures across clinical care delivery, regulated medical software, and AI-enabled diagnostics. His work sits at the intersection of medicine, technology, and health equity, with a consistent focus on translating complex clinical problems into scalable, real-world solutions.
Jonathan has spent much of his professional life dedicated to improving outcomes for marginalized and underserved communities. He has designed and implemented frameworks that align clinical quality, reimbursement, and technology to sustainably advance health equity at scale. This mission is deeply personal and informs his leadership philosophy and long-term vision for healthcare transformation.
In addition to his operating experience, Jonathan is an author and long-time writer in the healthcare domain, with over 20 years of published work covering digital health, medical innovation, and healthcare systems. He is a frequent mentor to early-stage founders and regularly advises startups on product strategy, partnerships, and go-to-market execution in regulated healthcare environments.
Before entering industry full-time, Jonathan nearly pursued a career in medicine with an early path toward cardiothoracic surgery, an experience that continues to shape his clinical perspective and respect for frontline care delivery.
CEO | Oatmeal Health | AI Lung Cancer Startup | Engineer | Writer | Almost Became a Doctor (Cardiac Thoracic Surgeon) | 3x Health Tech Founder | Startup Mentor | Follow to share what I’ve learned along the way.
