For the third year in a row, the federal government is boosting payments to health plans for seniors instead of cutting them.
Officials announced Monday that average payments to Medicare Advantage plans will increase by 1.25 percent next year, a reversal of the average 0.9 percent cut the agency proposed back in February.
The change in payments is largely because Medicare per capita spending estimates have been updated since then and not because of a policy change, according to the Centers for Medicare and Medicaid.
The agency is also leaving a bonus system for high-performing plans in place without making any changes. It had proposed revising the system because of concerns it may have disadvantaged plans with many low-income enrollees. Officials said they're still considering changes, but decided to forgo any this year because of negative feedback to their proposal in February.
"Because the vast majority of the comments were opposed this proposal, CMS withdrew it and will make no change in the star rating program this year," said CMS Deputy Administrator Sean Cavanaugh.
Nearly 30 percent of Medicare enrollees are enrolled in Medicare Advantage, a popular alternative to the traditional program, which works through private plans contracting with the federal government.
Even though the Affordable Care Act called for major cuts to Medicare Advantage plans, the agency has reversed planned cuts for the past three years amid hard lobbying by the insurance industry.
Last year, CMS increased the overall payment rate by 0.4 percent instead of cutting by 1.9 percent as originally proposed. The year before, it boosted payments by 3.3 percent instead of a 2.3 percent reduction.