Medicare Advantage Bill Mandates 0.70 Payment Floor, Requires 50% of Increases Go to Basic Benefits Starting 2026

The Medicare Advantage Integrity Act of 2025 is looking to change how the government pays private insurance companies that offer Medicare Advantage (MA) plans. Simply put, this bill tweaks the math used to calculate MA payments, specifically aiming to boost payments in certain areas, and then puts a rule on how those extra funds must be spent.

Starting in 2026, the bill establishes a minimum geographic adjustment floor of 0.70 for calculating the base payment amount (known as the benchmark). For the uninitiated, this ‘geographic adjustment’ is basically a multiplier that decides how much Medicare pays a plan based on where it operates. Areas with lower healthcare costs or lower MA enrollment often get a smaller multiplier. By setting a minimum of 0.70, the bill ensures that MA plans operating in areas currently below that threshold will see a guaranteed increase in their benchmark payment.

The Guaranteed Boost: Who Benefits?

This new 0.70 floor is a direct financial boost for MA plans in regions that currently receive lower reimbursement rates. Think of it like this: if you live in a rural area where the cost of living (and thus the cost of healthcare services) is lower than in a major city, your local MA plan might receive a lower benchmark payment. This bill says, “Nope, you can’t go lower than 0.70.” This is intended to make it more financially attractive for insurance companies to offer robust plans in those lower-reimbursement areas, potentially increasing plan choices or improving existing benefits for beneficiaries there.

However, it’s important to note the financial ripple effect. These benchmark payments come directly from the federal Medicare program, funded by taxpayers. While the goal is to improve access, setting a higher minimum floor means the federal government will be spending more on MA plans overall, which translates to a greater financial burden on the Medicare trust fund and, indirectly, on taxpayers.

The ‘Show Me the Receipts’ Rule

Here’s where the “Integrity” part of the bill’s title comes in. The legislation includes a critical requirement: for any increase in the benchmark payment that results specifically from applying this new 0.70 floor, at least 50 percent of that increase must be used for payment for basic benefits.

This is the bill’s attempt to ensure that the extra taxpayer money doesn't just pad the administrative budgets or profit margins of the insurance companies. It’s a direct mandate to redirect half of the new money toward things that actually benefit the beneficiary—like doctor visits, hospital stays, and essential healthcare services. For the average Medicare Advantage enrollee, this provision is designed to translate the increased government spending into tangible improvements in their coverage.

The Regulatory Gray Area

While the 50% mandate sounds good on paper, there are a couple of details that could complicate the rollout. First, the bill grants the Secretary of Health and Human Services the authority to define the term “average geographic adjustment” through “program instruction or other formal means.” Giving a federal agency the power to define a key term after the law is passed can sometimes lead to interpretations that limit the intended scope of the financial change. The definition matters, as it determines exactly which plans qualify for the 0.70 floor and how much they get.

Second, the effectiveness of the 50% rule hinges on how “basic benefits” are defined. If that definition is too narrow or too flexible, it might still allow plans to use the funds in ways that aren't immediately noticeable or beneficial to the average person. The clear intent is to direct funds to care, but the execution will depend heavily on the regulatory fine print written later.