H.R. 3467 makes significant changes to how Medicare Advantage plans operate and are paid, effective January 1, 2028. The bill requires Medicare Advantage plans to use "capitated payments" (fixed monthly fees per patient) instead of other payment methods, reduces the government's payment rates to these plans to 75 percent of current benchmark amounts, and eliminates quality-based payment bonuses. The legislation also automatically enrolls Medicare beneficiaries into the lowest-cost available Medicare Advantage plan and locks them into that plan for three years, though they can opt out and exceptions exist for hardship situations. Additionally, the bill changes how plans account for patient health status in their payments by limiting documentation to face-to-face or telehealth visits only, and requires Medicare Advantage plans to cover hospice care starting in 2028. These reforms are intended to reduce Medicare spending on the roughly 28 million seniors currently enrolled in Medicare Advantage plans.
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