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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:
CEO/Co-Founder @ Oatmeal Health | AI Lung Cancer Screening | Almost Became a Doctor | Engineer | Follow to Share What I’ve Learned Along the Way
I help patients get the care they need earlier, preventing late-stage cancer.
That’s been the throughline across three companies and almost 20 years in healthcare. At ReferralMD, we fixed broken referral networks so patients didn’t fall through the cracks. At Oatmeal Health, it’s lung cancer: building the diagnostic and screening infrastructure so the 85% of cases caught too late get caught early instead.
Today as CEO of Oatmeal Health, I lead a team embedding AI into radiology workflows to turn routine lung CT scans into reimbursable cancer risk assessments. We partner with FQHCs to reach underserved communities, and with health systems and payers to make early detection economically sustainable. Think HeartFlow or Cleerly, but for lungs.
Between companies, I advised at Techstars and Plug and Play, mentoring founders building in digital health. That experience shaped how I think about what separates companies that ship from companies that stall: distribution, reimbursement, and clinical trust, not just technology.
I’m a CancerX alumnus, a 3x healthcare founder, and someone who believes the biggest problems in cancer aren’t scientific. They’re operational.
We’re hiring mission-driven builders at Oatmeal Health. If you want to work on something that matters, reach out.
When I’m not working, I’m traveling, mentoring, and keeping up with one very energetic husky. 🐾
Substack – The Oatmeal Bite:
Millions of patients get less care because of who they are, where they live, or how they look. I’m fighting to change that. CEO @OatmealHealth, a startup built for the underserved. The Oatmeal Bite: intel for clinicians, investors, and advocates.
Jonathan Govette
CEO of Oatmeal Health
Substack:
https://oatmealhealthjonathangovette.substack.com/
