Why a federal Medicare Advantage funding proposal could mean fewer choices — and higher costs

February 26, 2026

A new federal funding proposal for Medicare is raising concerns about what it could mean for more than 35 million Americans enrolled in Medicare Advantage plans. While the proposal calls for “flat” funding, health policy experts warn that approach could lead to fewer plan options and higher costs for seniors.

Medicare Advantage plans are offered by private insurers approved by Medicare and often include extra benefits such as dental, vision, hearing coverage and limits on out-of-pocket costs. Many people choose these plans because they offer more predictable costs than traditional Medicare.

Politico reports that federal officials are considering a proposal that would keep payments to Medicare Advantage plans flat in the coming years.

While that may not sound concerning, health care costs rarely stay the same. When payments don’t keep up with sharply rising costs for hospital care, doctor visits and prescription drugs or high utilization of care, insurers often are forced to raise premiums, increase copays, cut benefits, or limit consumer choices.

The Better Medicare Alliance, which represents seniors, health plans, and health care providers, raised similar concerns in response to the proposal, warning that flat funding risks undermining the stability and affordability many seniors rely on from Medicare Advantage, particularly those living on fixed incomes.

For consumers, that pressure can show up in concrete ways:

  • Fewer Medicare Advantage plans offered in some communities
  • Cuts to extra benefits such as dental, vision, hearing, or fitness programs
  • Rural residents may be hit hardest, with fewer plan options and limited access to providers

This proposal is not final. Congress will continue reviewing feedback before making decisions that could affect millions of Medicare beneficiaries. If you rely on Medicare Advantage — or expect to in the future — now is the time to speak up. Let Congress know how funding decisions affect your health care and financial security. Speak Up Today!