In mid-January, the Biden administration released its proposed Medicare Advantage rates in 2026. These are the rates that the government pays insurers for the program to provide low-cost, affordable plans for seniors. Since the announcement, the media have produced headlines touting how the rates have supposedly increased. Unfortunately, these “rate increases” are little more than smoke and mirrors. In reality, when considering the toll of Biden-era inflation and deductions not included in that top-line number, these so-called increases are actually less than the rate of inflation. The upshot? Unless the Trump administration moves quickly, healthcare costs will go up again for seniors during a time when stubborn inflation has already made life on a fixed income unaffordable for many Americans.
On paper—and in some mainstream headlines—the 2026 Medicare Advantage rates have increased by a total of 4.3%. However, this is misleading, as it includes a 2.1% “risk model adjustment,” a controversial Biden-era contrivance that does not go toward covering plans. The true rate increase is only 2.2%. This matters because the consumer price index year-over-year inflation trend is 2.7%. That’s right—this supposedly “generous” rate increase, following back-to-back years of rate cuts, is itself, effectively, another cut.
After a bruising 2024 presidential primary in which Joe Biden accused Donald Trump and Republicans of wanting to cut senior safety net programs, why did Joe Biden propose funding cuts to the Medicare Advantage program as one of his last acts as president? Didn’t he promise in last year’s State of The Union to vigorously defend Medicare from cuts? Unfortunately, Biden failed to stick to his word in the interest of carrying out a devious act of political sabotage.
Here's how the plot works: First, this latest cut to Medicare Advantage (disguised as a generous increase) is a shot at Republicans. The new rates don’t take effect until 2026, in the middle of Trump’s second term in office and ahead of a critical Republican election year. Just as the GOP is gearing up to defend their majorities in both chambers of Congress, these new rate cuts will be hitting seniors enrolled in Medicare Advantage plans. By then, the Biden administration will feel like a distant memory, leaving President Trump to deal with the consequences.
Second, more broadly, many Democrats want to undermine the popular Medicare Advantage program because it is a more free-market approach than traditional Medicare and, therefore, delivers care more efficiently and at lower out-of-pocket costs for most seniors. The most progressive Democrats dream of establishing “Medicare For All” and doing away with private insurance entirely. They see the success and popularity of Medicare Advantage as standing in the way.
The majority of Medicare beneficiaries—that’s 34 million American seniors—are enrolled in Medicare Advantage. They are the ones who will suffer if these new rates are allowed to take effect in 2026. Life is getting more expensive for all Americans thanks to the lingering effects of Biden’s disastrous inflationary policies, and this problem is particularly acute for older Americans.
Unfortunately, seniors on Medicare Advantage are already feeling the pain. At the start of this year, about 1.3 million Medicare Advantage enrollees lost access to their current plans, forcing them to make changes to their coverage. The coverage cost is also increasing; seniors in 19 states are seeing an average premium increase of more than 10%. As if that wasn’t bad enough, maximum out-of-pocket levels in Medicare Advantage plans have also gone up this year. Clearly, the current situation is untenable, but this popular program will continue to be driven into the ground if the Trump administration does not take swift action.
Last year, Americans demanded change at the ballot box. They have had enough of paying more and getting less. We can’t expect seniors to tolerate ever-increasing costs for their Medicare Advantage plans and worse coverage. It will be up to the Trump administration and Congressional Republicans to dismantle this political ticking timebomb before it goes off next year. If they don’t, you can be sure that seniors won’t hesitate to demand change yet again in 2026.
Christian Josi is a veteran political and media advisor, author, and frequent opinion columnist. He is Founder and Managing Director of C. Josi & Company, a global communications consulting firm.