| |  | Industry Rx | Insurers are eagerly awaiting the Centers for Medicare and Medicaid Services to finalize its annual adjustment to Medicare Advantage policies and payment rates. The agency has until April 6, but it could drop at any moment. The Trump administration proposed a .09 percent increase to Medicare Advantage payments, which shocked the industry. Insurers claim that it doesn’t reflect real-world evidence of higher medical costs and covering patients who are sicker; they say it effectively functions as a cut. The increase would translate into an additional $700 million in Medicare Advantage payments. Wall Street analysts had expected the administration to propose boosting payments by 4 percent to 6 percent. → Historically, administrations have finalized higher rates than the ones they proposed, but some experts are already expecting a modest bump. Kim Monk, a founding partner of Capital Alpha, told clients Monday she estimates that CMS will finalize a 2 percent or 3 percent increase. Chris Klomp, who leads Medicare, has spoken at industry conferences in the last several months, and has attempted to assuage fears about the lower-than-expected proposed rate. At one industry-sponsored event, Klomp emphasized that he “cares deeply” about Medicare Advantage and sees it as an essential part of Medicare’s future. But, regarding the advance rate notice, he said at a Better Medicare Alliance event earlier this month that “what we’re doing right now isn’t working” as health costs rise. But there are potential political implications involved in the payment rate CMS chooses. “This is arguably the most important final rate announcement in years,” Chris Meekins, an analyst at Raymond James, wrote in a client note on Monday. Although Meekins said the final rate will be a crucial signal for investors, he’s previously said that finalizing a rate that’s viewed as untenable by insurers could also lead to backlash ahead of crucial midterm elections. Health insurers have warned that the proposals would make providing coverage in some places too expensive, which could cause an increase in out-of-pocket maximums for people on Medicare Advantage — or plans leaving certain areas entirely. → Some plans have already retreated from unprofitable areas, as WaPo’s Christopher Rowland reports in his latest story: “Why millions of seniors have suddenly lost health care coverage.” | 
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