Medicare Advantage insurers lobby Trump for relief

Medicare Advantage insurers are taking their first stab at getting the Trump administration to chart a new, more lightly regulated path for the program.

In comments on the Medicare Advantage and Part D policy proposed rule for 2026, health insurance trade associations call on the Centers for Medicare and Medicaid Services to make a slew of changes in the final rule, such as scrapping Medicare and Medicaid coverage of obesity drugs, extending a Medicare Advantage payment model the industry favors, and eliminating a health equity payment adjustment.

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Insurance companies faced considerable stress during President Joe Biden's term, when CMS implemented numerous regulations and actions that squeezed Medicare Advantage profit margins, triggering significant pressure from Wall Street.

With President Donald Trump back in the White House, the industry has a fresh opportunity to roll back some of those policies and enjoy higher Medicare revenue. Although Trump has not articulated a Medicare Advantage agenda, his nominee for CMS administrator, Dr. Mehmet Oz, is a vocal supporter of the program.

Citing Trump's ongoing freeze of new regulations, the health insurance trade group AHIP goes so far as to recommend CMS start from scratch with a new proposed rule. The agency should “reconsider the proposed rule in light of the goals of reducing healthcare costs and promoting affordability” and retain only a handful of Part D and risk-adjustment provisions, AHIP wrote.

The Better Medicare Alliance, a coalition of insurers, providers, patient advocates and business groups, similarly urges CMS to limit the final rule to elements mandated under statute.

AHIP, the Blue Cross Blue Shield Association and other insurance groups share consensus views on key aspects of the proposed rule, starting with opposition to Medicare and Medicaid coverage of costly glucagon-like peptide-1 receptor agonists, or GLP-1s, such as Ozempic and Wegovy.

The Blue Cross Blue Shield Association and the Alliance of Community Health Plans, which represents insurers affiliated with nonprofit providers such as Baylor Scott & White Health Plan and Geisinger Health Plan, assert in letters to CMS that the agency lacks the regulatory authority to require GLP-1 coverage. The organizations cite a Supreme Court ruling last year that weakened the power of federal agencies to interpret laws.

“The proposal could create a precedent for other attempts to make major policy changes through reinterpretations of law,” wrote AHIP, which does not reference the Loper Bright ruling in its comments. “Policymaking through reinterpretation has the potential to subvert congressional intent,” the trade group wrote.

The insurance industry also wants CMS to bring back or replace the Value-Based Insurance Design, or VBID, model that's slated to sunset at the end of the year. Excess spending justified ending the project ahead of schedule, the agency said in December.

“We encourage CMS to promote stability in this space and ask for at least one more year of VBID to ensure a smooth transition for beneficiaries and to explore alternative options to incorporate successful aspects of the model into Medicare Advantage more broadly,” the Better Medicare Alliance wrote.

The insurance groups request that CMS delay a proposal requiring timely updates of provider directories, if not abandon it altogether. The Alliance of Community Health Plans recommends instead focusing on providers.

“Providers send their information to health plans without consumer needs in mind despite health plan prompts around consumer scheduling and access considerations,” the Alliance of Community Health Plans wrote. “This results in information such as addresses and phone numbers being listed that are accurate for billing, credentialling and network adequacy requirements, but not for consumers’ contact needs.”

The industry objects to the limits CMS proposed on the use of debit cards to access Medicare Advantage supplemental benefits. For example, the draft regulation would require insurers to implement real-time verification that members only use these "flex cards" for eligible expenses. AHIP protests that retailers don't have those capabilities.

Insurers also ask the Trump administration, which is engaged in a sweeping campaign to eradicate anything related to diversity, equity and inclusion from the federal government, to eliminate or scale back the Health Equity Index in the Medicare Advantage Star Ratings program.