January 29, 2026

The CMS released the Medicare Advantage rate notice which revealed a flat rate. The rule sent a shockwave down Wall Street, which had expected a much higher update from the historically pro-business Trump administration. The flat rate update was based on CMS actuaries’ analysis of underlying medical cost trends and doesn’t represent any weighting one way or another by the Trump administration, Medicare director Chris Klomp stated.

CMS proposed a 2027 Medicare Advantage payment rule that would exclude diagnoses found through unlinked chart reviews from risk adjustment, aiming to curb upcoding and save Medicare an estimated $7 billion. The change would disproportionately impact large insurers like UnitedHealthcare and has drawn strong industry pushbacks despite modest overall rate increases.

The federal government has announced the next 15 drugs targeted for Medicare price negotiations, which together account for roughly $27 billion in program spending. CMS Administrator Mehmet Oz said the selection strategy is intended to generate meaningful savings while reinforcing accountability across Medicare.

New CMS data show that dispute volume under the No Surprises Act remains highly concentrated. In the first half of 2025, the top 10 initiating parties accounted for nearly 70% of all disputes, with HaloMD, Team Health, and SCP Health alone representing 44%. Providers prevailed in 88% of resolved cases and were frequently paid three to four times above comparable in-network rates, highlighting cost challenges for insurers.

Elevance expects revenue, earnings, and membership to decline in 2026 as it sheds unprofitable members and faces continued cost pressure, particularly in Medicaid, despite improvements in Medicare Advantage and ACA margins. Executives described 2026 as a “trough year,” with stronger earnings growth expected in 2027.