Private Medicare Plans Get Bigger 2020 Rate Hike Than Expected

The federal government will increase baseline payment rates for private Medicare health plans by 2.53 percent in 2020, nearly a full percentage point higher than the Department of Health and Human Services had initially proposed.

The news, announced April 1, likely came as a relief to insurance companies like UnitedHealth Group Inc. and Humana Inc., which have a sizable chunk of Medicare Advantage members—people who opt in to managed care benefits under Medicare. Insurers were worried the annual rate adjustment wouldn’t keep pace with rising plan costs.

After proposing a rate increase of 1.59 percent in January, the Centers for ...