By Jim Merritt
During my years serving in state government, I learned quickly that budgets reflect our true priorities and that you simply can’t ignore basic math.
Today, as a senior myself, I am watching the math around our healthcare very closely and I am concerned. Right now, one of the best healthcare options available to older Americans —Medicare Advantage (MA) — is facing a critical funding challenge. What’s worse, it’s happening at a time when seniors can least afford to see their bills go up and when medical inflation especially remains stubbornly high. Hoosier seniors are relying on Washington to apply common sense and give Medicare Advantage the sustainable funding it needs.
Across the country, 35 million seniors opt for Medicare Advantage over traditional fee-for-services (FFS) Medicare. For them, the choice between the two is clear: MA offers a better deal, keeping more money in their pockets. Medicare Advantage saves enrollees an average of $3,400 annually in out-of-pocket costs. Even better, it caps those out-of-pocket expenses entirely, which gives MA seniors on fixed-incomes a much-needed sense of stability. Not only does MA save enrollees money, it also offers supplemental benefits that help keep people healthy and active, including vision, dental, hearing, and fitness programs.
The results of this care model speak for themselves. Just look at the statistics for traditional Medicare, where similarly situated individuals face a 126 percent higher hospital readmission rate and 53 percent higher inpatient costs. This is a stark contrast, especially since 76 percent more MA beneficiaries manage five or more chronic conditions compared to FFS enrollees.
Despite these successes, the previous administration’s policies actively undermined the MA program. During the Biden years, funding for MA chronically lagged the skyrocketing real-world costs of medical care. The fallout has been deeply damaging for Indiana seniors. Across a two-year span, plan availability shrank by nearly 14 percent. Insurers were forced to abandon markets, leaving nearly one million seniors scrambling to find new doctors and coverage, a crisis that hit rural communities especially hard. Meanwhile, average premiums for MA-PD plans are expected to leap by 24 percent this year.
Thankfully, Indiana seniors have strong allies fighting for them. Senator Jim Banks and Representative Erin Houchin have proven themselves to be dedicated advocates for older Hoosiers. By standing shoulder-to-shoulder with the Trump Administration to advance the program’s integrity, Senator Banks and Rep. Houchin are working to shield a program that primarily serves our lower-income neighbors. After all, 36 percent of MA members live on less than $25,000 annually.
Unfortunately, things are not moving in the right direction. The Centers for Medicare and Medicaid Services (CMS) recently issued the Advance 2027 MA Rate Notice. Unbelievably, despite sharply rising medical costs and high care utilization, the agency has proposed a negligible 0.09 percent funding increase.
That’s not a typo. Let’s be clear about the mathematical reality here: When medical inflation is running between 7 and 9 percent annually, a 0.09 percent funding increase is really a massive operational cut.
If this CMS rate notice moves forward unchanged, millions of seniors will face another brutal round of benefit cuts and higher costs when they renew their plans this October. Health plans simply cannot absorb 7 to 9 percent inflation with a 0.09 percent funding bump without passing those losses onto us.
I’m grateful to leaders like Senator Banks, Rep. Houchin, and the Trump Administration for prioritizing the integrity of this program. Now, the Administration must finish the job, address the MA rate notice, and guarantee that Medicare Advantage remains the affordable, stable choice Hoosiers deserve.
