S&P says Medicare Advantage issuers will be fine

The big Medicare Advantage program issuers should do fine in 2017, and changes in how the Centers for Medicare & Medicaid Services (CMS) develops its own rates and policies could make issuers’ lives easier, according to analysts at Standard & Poor’s Ratings Services.

James Sung and other S&P analysts published a mildly optimistic commentary on the state of the U.S. individual health insurance market Tuesday. Patient Protection and Affordable Care Act (PPACA) changes have caused pricing confusion, but the new rules should make the individual health market more viable, the analysts said.

Today, the analysts say the environment for Medicare Advantage issuers looks good. Issuers complained about the program last week, after CMS announced that it would increase the average 2017 payment to Medicare Advantage plan issuers just 0.8 percent.

In February, CMS had suggested it might increase the average payment by 1.35 percent.

The cut in the increase may sting, but the average payment will still increase slightly, and CMS is giving insurers more information about how it sets program policies and support levels, the S&P analysts say.