Oz’s Medicare Plan Under Scrutiny: Reform or Hidden Cut?
Rising Concerns Over Medicare Advantage Affordability
Some Americans could face significant new health care affordability challenges shortly before the 2026 midterm elections. In January, the Centers for Medicare & Medicaid Services (CMS) proposed a nearly flat Medicare Advantage (MA) rate increase, which, if finalized, is expected to result in an average year-over-year payment increase of 0.09%, or over $700 million, to plans in 2027. CMS Administrator Dr. Mehmet Oz stated that the recently proposed payment policies aim to ensure MA “works better for the people it serves.”
However, several analysts have warned that the CMS proposal could lead to major issues for some MA enrollees, such as significant out-of-pocket cost increases, fewer benefits, and less plan options.
The Impact of Flat Funding on Seniors
According to Susan Reilly, vice president of communications at Better Medicare Alliance, the proposed 0.09% payment increase is effectively a “cut.” She explained that flat funding is not neutral, as medical costs are rising, utilization is increasing, and when payments fall short of real costs, seniors absorb the difference through higher out-of-pocket costs, reduced benefits, and plan closures.
Reilly noted that more than 35 million seniors depend on Medicare Advantage—over half of all Medicare-eligible Americans. Independent analysis from Berkeley Research Group estimates the proposed rate changes would amount to a $324 per beneficiary cut from risk model changes alone. That’s real money for seniors on fixed incomes.
A CMS spokesperson emphasized that MA remains a strong and growing option for seniors, with beneficiaries choosing MA for its affordability, added benefits, and flexibility. The spokesperson also stated that CMS is committed to preserving patient choice and ensuring the program continues to deliver high-quality, affordable coverage for the millions of seniors who rely on it.
Challenges Ahead for Medicare Advantage Enrollees
Reilly pointed out there have already been key “warning signs” about some seniors enrolled in MA potentially facing fewer benefits and rising costs if the proposed rate gets finalized. A peer-reviewed study published in JAMA in February found that nearly 1 in 10 MA enrollees were forced to find new coverage for 2026 due to insurer exits—the highest forced disenrollment rate ever recorded. Rural seniors were nearly twice as likely to face disruption.
If the proposed rate is finalized, seniors can expect higher out-of-pocket costs, fewer supplemental benefits like dental, vision, hearing, and transportation, plan closures especially in rural and underserved areas, and narrower networks with reduced access to specialists. Reilly emphasized that seniors will notice these changes when they renew their coverage in October 2026—right before the midterms.
Calls for Action and Reform
The most immediate and impactful step the administration can take, according to Reilly, is to fix the rate before the Final Rate Notice in April. Specifically, CMS should revise the 4.97% effective growth rate to reflect actual medical cost trends. Every one-point understatement costs plans approximately $12 per member per month, or $144 per senior annually.
Reilly also suggested that CMS should delay or phase in the proposed risk model changes, which were calibrated on 2024 data distorted by a temporary skin substitute spending spike that has already been corrected.
Darryl Drevna, senior director of regulatory affairs at the American Medical Group Association (AMGA), echoed similar concerns. He stated that the 0.09% proposed rate change is wholly inadequate and does not reflect the reality AMGA members and their patients face. Workforce costs are up, medical supplies have seen double-digit price increases, and organizations are still making ongoing investments in health IT and care coordination infrastructure just to meet existing regulatory requirements.
For seniors, that gap has real consequences. When payments fall short, plans respond by narrowing provider networks, cutting supplemental benefits like dental and vision coverage, raising copays for specialist visits, and in some cases, especially in rural and underserved areas, exiting markets entirely.
Potential Reduction in Plan Options
Michael F. Cannon, director of health policy studies at the Cato Institute, warned that senior enrollees may be left with fewer MA plan options if the proposed rate increase gets finalized. Currently, the average enrollee can choose from among 32 plans, but the remaining plans may have fewer subsidies for groceries, transportation, and pet care.
Cannon also mentioned that some seniors may lose their current MA plans and end up with no choices. He argued that the solution to these problems is to reform Medicare by turning it into a cash-transfer program.
While he acknowledged that the proposed rate increase could lead to lower costs, in the sense of lower spending on Medicare, he cautioned that this comes at the expense of seniors’ access to care and benefits.
Broader Implications for Health Care Costs
In 2026, MA rates rose by 5.06%, after increasing 3.7% the year prior. The 60 Plus Association, a nonpartisan seniors advocacy group, claimed in a March 10 X post that having a 0.09% MA rate for 2027, “when medical costs are rising 7–9% is effectively a cut.”
Health spending in the U.S. notably climbed 7.5% from 2022 to 2023, compared to only a 4.6% increase from 2021 to 2022, according to KFF reported in October 2025.
Please make a small donation to the Tampa Free Press to help sustain independent journalism. Your contribution enables us to continue delivering high-quality, local, and national news coverage.
Sign up:
Subscribe to our free newsletter for a curated selection of top stories delivered straight to your inbox
- Oz’s Medicare Plan Under Scrutiny: Reform or Hidden Cut? - April 18, 2026
- 5 Cara Unik Hewan Laut Mendapatkan Oksigen, Mulai dari Insang hingga Kulit - April 18, 2026
- Health System in Full Emergency Mode After Iranian Missile Attacks in South - April 18, 2026
Leave a Reply