Here’s the good news: Medicare Advantage is one of our nation’s most successful public-private partnerships, providing efficient and effective access for many millions of American seniors to cost-effective healthcare coverage. The bad news is that Medicare Advantage is under threat from a Biden-era proposal that will spell disaster for the Medicare Advantage Program if nothing is done.
For the last two decades, the Centers for Medicare and Medicaid Services (CMS) has used a single normalization factor as a basis to calculate payment rates for both Medicare Advantage Prescription Drug plans (MA-PDs) and standalone Part D plans (PDPs – the Medicare Prescription Drug Benefit). (A normalization factor is used to account for changes in the health status and demographics of traditional Medicare beneficiaries.)
Without going into the heavy math – let’s suffice it to say this makes sense. A single normalization factor allows both MA-PDs and PDPs to compete in the marketplace on a level-playing field and resulting competition has led to lower out-of-pocket costs and more coverage options for millions of American seniors.
Rather than leaving well enough alone, the Biden Administration and Democrats in Congress (always suspicious of public/private partnerships – even successful ones) opted to separate the normalization factors for MA-PDs and PDPs, effectively lowering the payments made to MA-PDs to ensure PDPs got more money -- a shell game aimed at stabilizing the PDP market at the expense of MA-PD beneficiaries. The new normalization factor methodology will result in inaccurate risk scores. What does this mean? Artificial risk scores divorced from reality. In 2025, the difference in normalization factors was 12.4% higher for MA-PDs, dragging down the risk scores. That jump is 34.6% in 2026, nearly tripling.
Unfortunately for these denizens of Big Government, Part D drug plans have been far less efficient when it comes to delivering drug benefits for enrollees compared to Medicare Advantage; monthly premiums for standalone PDPs average $45 compared to just $7 for MA-PDs. These ill-considered (but not unpredictable) policy decisions, baked into the Inflation Reduction Act, resulted in disastrous effects on both the Medicare Advantage and Part D markets. Predictably, premiums went through the roof and many Part D plans went away entirely.
Make no mistake, if allowed to happen, split normalization factors will lead to less choice and higher costs for beneficiaries enrolled in Medicare Advantage. CMS’s separate normalization factor policy favors less-efficient standalone Part D plans over more-efficient MA-PD plans. By harming Medicare Advantage in order to bolster Part D, CMS is robbing Peter to pay Paul.
With a new administration now in the White House and the Biden-era receding into history, it is imperative that we not allow the policy failures of the Biden administration to undermine the integrity of the successful Medicare Advantage program. Leaders in Congress must take action to stop separate normalization factors from becoming the new normal. We mustn’t allow the bureaucrats at CMS to normalize Biden-era mistakes while no one is looking.
It's time for some of what HHS Secretary Kennedy has called, “radical transparency.”
For the last two decades, the Centers for Medicare and Medicaid Services (CMS) has used a single normalization factor as a basis to calculate payment rates for both Medicare Advantage Prescription Drug plans (MA-PDs) and standalone Part D plans (PDPs – the Medicare Prescription Drug Benefit). (A normalization factor is used to account for changes in the health status and demographics of traditional Medicare beneficiaries.)
Without going into the heavy math – let’s suffice it to say this makes sense. A single normalization factor allows both MA-PDs and PDPs to compete in the marketplace on a level-playing field and resulting competition has led to lower out-of-pocket costs and more coverage options for millions of American seniors.
Rather than leaving well enough alone, the Biden Administration and Democrats in Congress (always suspicious of public/private partnerships – even successful ones) opted to separate the normalization factors for MA-PDs and PDPs, effectively lowering the payments made to MA-PDs to ensure PDPs got more money -- a shell game aimed at stabilizing the PDP market at the expense of MA-PD beneficiaries. The new normalization factor methodology will result in inaccurate risk scores. What does this mean? Artificial risk scores divorced from reality. In 2025, the difference in normalization factors was 12.4% higher for MA-PDs, dragging down the risk scores. That jump is 34.6% in 2026, nearly tripling.
Unfortunately for these denizens of Big Government, Part D drug plans have been far less efficient when it comes to delivering drug benefits for enrollees compared to Medicare Advantage; monthly premiums for standalone PDPs average $45 compared to just $7 for MA-PDs. These ill-considered (but not unpredictable) policy decisions, baked into the Inflation Reduction Act, resulted in disastrous effects on both the Medicare Advantage and Part D markets. Predictably, premiums went through the roof and many Part D plans went away entirely.
Make no mistake, if allowed to happen, split normalization factors will lead to less choice and higher costs for beneficiaries enrolled in Medicare Advantage. CMS’s separate normalization factor policy favors less-efficient standalone Part D plans over more-efficient MA-PD plans. By harming Medicare Advantage in order to bolster Part D, CMS is robbing Peter to pay Paul.
With a new administration now in the White House and the Biden-era receding into history, it is imperative that we not allow the policy failures of the Biden administration to undermine the integrity of the successful Medicare Advantage program. Leaders in Congress must take action to stop separate normalization factors from becoming the new normal. We mustn’t allow the bureaucrats at CMS to normalize Biden-era mistakes while no one is looking.
It's time for some of what HHS Secretary Kennedy has called, “radical transparency.”
