The Centers for Medicare & Medicaid Services (CMS) has officially released the 2026 Rate Announcement, finalizing updates to Medicare Advantage (MA) and Part D payment policies. This is essential information for agents as you prepare your strategy and support your clients heading into the 2026 plan year. Let’s break down the major takeaways from this announcement.
Projected Increase in MA Payments: +5.06%
CMS projects a 5.06% average increase in revenue to MA plans in 2026—translating to more than $25 billion in additional payments across the market. This is a significant update from the +2.23% projected in the Advance Notice earlier this year. Key drivers of this increase include:
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A 9.04% Effective Growth Rate in FFS per capita costs
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Finalization of rebasing and repricing adjustments (-0.28%)
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No changes to the MA coding pattern adjustment (remains at 0%)
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Completion of the three-year phase-in of the 2024 CMS-HCC risk adjustment model
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Star Ratings impact of -0.69%
What this means: More funding could translate into more competitive benefits and opportunities for agents to deliver even more value to clients.
Year-to-Year Percentage Change in Payment
1 Rebasing/re-pricing impact is dependent on finalization of the average geographic adjustment index, which was not available with the publication of the CY 2026 Advance Notice.
2 Change in Star Ratings reflects the estimated effect of changes in the Quality Bonus Payments for the upcoming payment year.
3 The impact of the update to the Fee-for-Service (FFS) normalization factors for MA risk adjustment is not shown in the fact sheet separately because there is considerable interaction between the impact of the MA risk adjustment model updates and the normalization factor update. Therefore, the combined impact is shown in the fact sheet.
4 The total does not include an adjustment for underlying coding trend in MA. For CY 2026, CMS expects the underlying coding trend to increase risk scores, on average, by 2.10%.
Growth Rate & Technical Adjustments
The Effective Growth Rate jumped from 5.93% in the Advance Notice to 9.04% in the final announcement. This shift is due to the incorporation of newer Medicare FFS data through the fourth quarter of 2024. CMS is also finalizing a full phase-in of medical education cost adjustments in the 2026 benchmarks.
Agents should be aware: These changes may affect how plans are priced and marketed, especially in competitive markets.
Risk Adjustment Model Updates
For MA Plans
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The 2024 CMS-HCC model is now fully implemented, with 100% of risk scores calculated using the new model.
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CMS will continue to use multiple linear regression for calculating the FFS normalization factor.
For PACE Organizations
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CMS is beginning the transition to the 2024 CMS-HCC model, calculating blended risk scores using 90% of the older 2017 model and 10% of the new model.
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This is to support a smoother transition to full encounter data submission.
Part D Updates and Inflation Reduction Act (IRA) Provisions
Several impactful IRA provisions are in effect for 2026:
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Catastrophic phase begins after $2,100 in out-of-pocket costs, with no cost-sharing.
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Insulin cost-sharing cap remains at the lesser of $35, 25% of the negotiated price, or 25% of the maximum fair price.
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Free adult vaccines recommended by ACIP remain covered under Part D.
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CMS continues to implement changes from the Medicare Drug Price Negotiation Program and Manufacturer Discount Program.
In addition, the Part D risk adjustment model has been updated using 2022 diagnoses and 2023 costs to ensure accuracy in bidding.
Star Ratings & Quality Measure Updates
CMS has finalized several updates to the Part C and Part D Star Ratings, including:
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Updated Improvement Measures and Categorical Adjustment Index for 2026
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Disaster adjustments and non-substantive specification updates
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Soliciting agent and plan feedback for future, more clinically focused measures
While many changes are non-substantive, CMS is clearly signaling its intent to shift Star Ratings toward outcomes, clinical care, and patient experience.
What This Means for Agents
As an agent, it’s critical to:
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Stay informed on how these changes may affect plan designs, provider networks, and drug coverage.
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Adjust your sales strategies based on payment increases and IRA reforms.
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Support clients proactively, especially those with high drug costs or chronic conditions who could benefit most from these updates.
Partnering with PSM Brokerage
At PSM Brokerage, we’re committed to helping agents like you stay ahead of the curve. Here’s how we support you:
✅ Carrier Fact Sheets – Get access to up-to-date plan data, benefits, and competitive positioning.
✅ Training & Support – From CMS updates to IRA reforms, we break down what you need to know, when you need to know it.
✅ Marketing & Automation Tools – Leverage tools that streamline client outreach and lead generation.
✅ Back Office Support – We handle the paperwork, so you can focus on production and client relationships.
✅ Strategic Mentorship – Whether you're new to Medicare or scaling a team, we’re here to guide your growth.
Stay ready. Stay informed. And stay supported with PSM Brokerage.
📝 For more information, check out the official CMS Rate Announcement: CMS.gov - 2026 Announcement
Want to talk strategy or access 2026 carrier fact sheets?
📞 Schedule a call with us today.