U.S. government boosts 2020 Medicare payments to insurers by 2.53 percent

The U.S. government on Monday said it would increase by 2.53 percent on average 2020 payments to the health insurers that manage Medicare Advantage insurance plans for seniors and the disabled, a reflection of a new estimate on medical cost growth.

The rate, which affects how much insurers charge for monthly healthcare premiums, plan benefits and, ultimately, how much they profit, represents an increase over the 1.59 percent increase proposed by the Centers for Medicare & Medicaid Services (CMS) in February.

The government raised the final payment rate from the proposed rate after revising its estimate for increases in medical services for next year. Its final estimate of that growth rate is 5.62 percent compared with 4.59 percent in its February proposal.

“Most of the puts-and-takes remained the same as proposed, but CMS upped the growth rate, which is definitely helpful in 2020,” said Ipsita Smolinski, managing director at healthcare research consulting firm Capitol Street.

Medicare Advantage plans serve more than 20 million people, most of them aged 65 and older.