Medicare Advantage Payments for Puerto Rico Drop Further in 2026
- Comunicado de Prensa
- Apr 29
- 3 min read
The Trump Administration improves MA nationwide, but Puerto Rico suffers cuts from previous policies that widen the payment gap
San Juan, April 23, 2025 – The payment gap for Medicare Advantage (MA) beneficiaries between the national average and Puerto Rico will widen even further in 2026, reaching a 41% difference. This follows an analysis of the proposed 2026 payment formulas, the implementation of the third phase of the risk model change (V28), and projected increases in healthcare service costs.
Ricardo Rivera Cardona, President of the Medicaid and Medicare Advantage Products Association of Puerto Rico (MMAPA) stated: “We continue to spiral downward in terms of adequate funding allocations for the effective operation of the Medicare Advantage (MA) program on the island, ever since the implementation of the Affordable Care Act in 2012. At that time, the allocated funds for premium payments were already 24% below the U.S. average ($191 per person per month.) Recent changes have further worsened MA payments in Puerto Rico. In 2025—the current year—the gap stands at 39%, but for 2026, it is projected that premium payments will be 41% below the national average, which equates to about $9,000 less per person annually, despite complying with the same strict federal regulations, delivering the same quality services required by CMS, and incurring the same drug costs as the rest of the nation.”
When evaluating all payment components, Puerto Rico is expected to see a -1.11% cut in 2026, compared to an average 5.06% increase in Medicare Advantage (MA) plan payments across the U.S. This disparity stems from persistent issues with Puerto Rico’s Traditional Medicare data, the implementation of the third phase of the new health condition adjustment model (risk model V28), and projected increases in healthcare service costs. According to CMS data, healthcare cost inflation for 2026 is estimated at 5%. The -1.11% adjustment is insufficient to cover these normal cost increases, meaning plans will need to adjust service costs and benefits to keep the program operational in 2026.
Rivera Cardona added, “It’s important to note that the new risk model eliminated 2,000 categories of chronic illnesses – many of which are highly prevalent in Puerto Rico. The implementation of model V28 is reducing Medicare Advantage funding on the island by approximately 3%, while the impact on the mainland is around only 1%. In fact, in 2023, actuarial firm Milliman estimated that the full implementation of the new risk model would reduce federal payments to Puerto Rico by 9.1%, while the national average reduction would be just 3.4%—roughly $800 million. This data has been provided to CMS multiple times.”
Another factor affecting funding allocation is the formula used by the Centers for Medicare & Medicaid Services (CMS), which for years has based its calculations solely on data from Parts A and B—Traditional Medicare. This data represents less than 4% of the senior population enrolled in the program on the island. As a result, it excludes data from the remaining 96% of seniors who choose to enroll in a Medicare Advantage (Part C) plan, which serves around 661,000 beneficiaries in Puerto Rico—300,000 of whom also rely on Medicaid.
“We’re extremely surprised that CMS claims it lacks sufficient information to make the necessary adjustments for the thousands of beneficiaries aged 65 and older, when MMAPA has submitted consistent and credible data year after year proving otherwise. MMAPA and the health insurance plans—all of which receive 4-star or higher ratings under CMS’s Star Rating system—will continue to deliver the highest quality healthcare services to our beneficiaries,” concluded MMAPA President Rivera Cardona.