As an increasing share of older adults have adopted digital health technologies over the past several years, and with most expressing interest in using them to manage their health care, the Centers for Medicare & Medicaid Services (CMS) has introduced several initiatives to expand the use of digital health technologies in Medicare. Broadly speaking, these technologies include health-related applications (“apps”), online patient portals, and connected devices such as smartphones and wearable devices that can be used to measure or track health data.   

A central component of CMS’s efforts in this area is the Health Tech Ecosystem, launched in 2025, through which CMS partners with private-sector organizations, including health care providers, payers, health app developers, and electronic health record vendors, to increase the availability of digital health tools and improve access to and exchange of electronic health information. While the initiative spans all CMS programs, people with Medicare gained access to the first wave of personalized health apps through the new Medicare app Library launched in April 2026, which allows beneficiaries to access third-party apps that have undergone independent review and meet certain requirements for privacy and security.

Separately, CMS introduced the ACCESS Model, a new Center for Medicare and Medicaid Innovation payment model scheduled to begin in July 2026 that aims to expand access to technology-enabled care for people in traditional Medicare with certain chronic conditions. CMS also enhanced the Medicare Plan Finder, the official online tool on Medicare.gov that helps beneficiaries compare and select Medicare coverage options.

This brief summarizes these digital health initiatives and draws on data from various surveys, including KFF Tracking Polls from September 2025 and March 2026, to highlight facts about recent experiences with and use of digital health tools among Medicare beneficiaries and older adults more generally.

The CMS Health Tech Ecosystem Aims to Expand Access to Patient-Facing Apps and Improve Health Data Exchange  

As part of the CMS Health Tech Ecosystem, dozens of companies have pledged to develop patient-facing apps that support exchange of health data and enable connectivity to the new Medicare App library, where people with Medicare can access third-party apps that meet CMS’s privacy and security criteria. To support the use of these tools, participating app developers, health information networks, electronic health record vendors, and payers have agreed to adopt common standards that make it easier for patients and providers to access and exchange electronic health information through the apps. The Medicare App library that launched in April 2026 will feature apps that meet one of the following initial use cases:

• Supporting management and prevention of diabetes and obesity, such as features that enable medication management or include resources related to prediabetes.
• Integrating conversational artificial intelligence (AI) assistants to help people navigate their care options and manage aspects of their health care, such as checking symptoms.
• Allowing patients to securely share their health and identity information electronically at check-in instead of completing paper forms (so-called “kill the clipboard” apps). Patients can also receive a summary of their visit through the same platform.

As of June 2026, the Medicare app library lists five apps that are available to beneficiaries and an additional eight apps that are expected to be added soon. A search tool on the app library website enables a comparison of apps based on 13 key features, such as managing health records, connecting to wearable devices, or sharing information with caregivers or providers, as well as searching for apps tailored to a range of health conditions and by price, with some apps being free and others requiring a subscription or having paid features.

CMS’s efforts to expand the availability of health care apps that have been vetted by the agency and meet specified standards for privacy and security build on the popularity and appeal of these tools, including among older adults.In 2025, eight in 10 (78%) Medicare beneficiaries ages 65 and older used a health care app or website to manage their health care in the past year, and more than half (58%) said these tools make managing their health care easier, according to a September 2025 KFF Health Tracking Poll (Figure 1). Three-quarters (75%) say they have used a health care app or website to access their medical records or lab results, the most common reported use of health apps among Medicare beneficiaries.

In addition, nearly two-thirds (63%) of older adults on Medicare say it’s important for Medicare to increase the availability of apps that help manage chronic conditions with the help of a health care provider, but few older adults on Medicare—about one in four (23%)— say they have used a health app or website in the past year to manage a chronic condition with their health care provider.

The ACCESS Model Expands Access to Technology-Enabled Care for People in Traditional Medicare with Certain Chronic Conditions

The CMS Innovation Center launched the ACCESS Model in December 2025 to test a national, voluntary payment approach that uses technology-supported care options to help traditional Medicare beneficiaries prevent and manage a specified set of chronic conditions. These chronic conditions are grouped into an initial set of four clinical tracks, two of which target cardiovascular, kidney, or metabolic conditions (e.g., hypertension, diabetes), one that targets musculoskeletal conditions (e.g., chronic musculoskeletal pain), and another that targets behavioral health conditions (e.g., depression). About 7 in 10 Medicare beneficiaries have conditions that qualify for at least one track, though this estimate may change as CMS considers additional conditions and clinical tracks in the future.

The model is voluntary for both participating organizations and people in traditional Medicare, who need to enroll directly with participating organizations or through a referral from their provider. It will run for 10 years from July 2026 through June 2036, with organizations joining in cohorts on a rolling basis throughout the model period. Medicare beneficiaries may disenroll or switch participating organizations after 90 days of their enrollment, and participating organizations may withdraw with advance notice to CMS and beneficiaries. 

To date, 190 organizations have been accepted as participants, including digital health companies, mental health organizations, health systems, and physician groups, most of which, according to CMS, have not previously served Medicare beneficiaries. These participants, who must enroll as Medicare Part B providers or suppliers, will receive monthly payments for managing beneficiaries’ qualifying conditions, with full payment tied to achieving certain health outcomes, such as helping a beneficiary with hypertension lower their blood pressure to a specific level. Currently, the vast majority of accepted applicants (151 organizations) have signed up for at least one of the two tracks focused on cardiovascular, kidney, or metabolic conditions, while 108 have signed up for the track on behavioral health conditions and 76 for the musculoskeletal track. Because organizations can participate in multiple tracks, these categories are not mutually exclusive.

Currently, it is unclear how broadly individual participants will operate geographically or the scope of services offered by each participant. CMS plans to launch a public directory of all ACCESS participants in July 2026, allowing people with Medicare and their providers to identify participating organizations, the conditions they treat, with risk-adjusted outcome measures for each organization expected to be added beginning in 2028. Organizations that participate in the model and also pledge to join the Health Tech Ecosystem will also be featured in the Medicare App Library as participants.

Participating organizations may use a variety of digital tools to deliver services under the Model, ranging from FDA-regulated medical devices such as continuous glucose monitors, to mobile applications, wearables, and non-FDA regulated software. CMS gives participants flexibility in selecting technologies and clinical tools that support the model. Some tools may be classified as clinical devices, including continuous glucose monitors, blood pressure cuffs, and wearable devices such as fitness trackers and smartwatches. Beneficiaries may receive these tools on either a loan or ownership basis from the participating organization or use their own devices. While participants generally may not require beneficiaries to purchase or rent devices classified as clinical, beneficiaries may still need access to non-clinical technologies, such as internet access, tablets, or smartphones to use technology-enabled services.

Variation in the technologies used under the ACCESS Model, as well as Medicare beneficiaries’ access to and familiarity with digital tools, may lead to differences in how people in traditional Medicare access and experience technology-supported care under this model. For example, some beneficiaries may enroll with participating organizations that incorporate the use of technologies already integrated into their care, such as Medicare-covered continuous glucose monitors. Others may enroll with participating organizations that incorporate technologies such as wearable fitness trackers that are generally not covered by Medicare and may be less widely adopted among beneficiaries. For example, in 2024, just under a quarter (23%) of adults ages 65 and older used an electronic wearable device to monitor or track their health or activity in the past year, based on KFF analysis of the Health Information National Trends Survey (Figure 1).  However, among older adults who use wearable devices, the vast majority (85%) said they would be willing to share data from their device with their health care providers.

Medicare Advantage enrollees, who account for more than half of all Medicare beneficiaries, do not qualify for the ACCESS Model, but 16 insurers, including those serving Medicare Advantage enrollees, have pledged to adopt similar models of care to date. Many Medicare Advantage enrollees report having conditions being targeted by the ACCESS Model, including hypertension (64%), diabetes (35%), and depression (28%), based on a KFF analysis of the 2023 Medicare Current Beneficiary Survey (MCBS). Because details about the programs pledged by the 16 insurers are not yet available, it is unclear how they will be structured or the patient populations that will be targeted, though they may resemble existing supplemental benefits offered by Medicare Advantage plans. In 2026, 44% of enrollees are in individual Medicare Advantage plans that offer remote access technologies, which may include clinical devices such as continuous glucose monitors, and 95% are in plans that offer fitness benefits, which may include discounts on wearable devices. For example, some plans offered by Devoted Health, which has pledged to align with ACCESS, offer partial reimbursement for the purchase of a wearable device as part of a fitness benefit. While CMS collects data on use and spending on supplemental benefits in Medicare Advantage plans, such as the number and characteristics of enrollees who use these benefits, this data is currently unavailable to researchers and consumers.

Changes to the Medicare Plan Finder Could Make It Easier to Compare and Select Medicare Coverage Options

In 2025, CMS announced enhancements to the Medicare Plan Finder, the official tool on the Medicare.gov website that helps beneficiaries compare and select Medicare coverage options. These enhancements include the following updates: 

• Offering Medicare Advantage provider directory information to help beneficiaries identify whether their doctors are in a plan’s network. Unlike traditional Medicare, most Medicare Advantage insurers use provider networks, which can change from year to year. Medicare beneficiaries say having access to their preferred providers is an important factor when selecting their Medicare coverage, yet in 2022, Medicare Advantage enrollees were in a plan that included just under half (48%) of all physicians available to traditional Medicare beneficiaries in their area. Prior to 2025, the Medicare Plan Finder did not include data on provider networks, resulting in beneficiaries’ going to each plan’s website or third-party sources to determine whether their preferred providers were in the network. Incorporating provider directory information in the Medicare Plan Finder may make it easier for beneficiaries to evaluate their coverage options, though the usability and completeness of this feature continue to evolve.
• Showing additional details on more than 30 supplemental benefits under Medicare Advantage. These details include in-network and out-of-network cost sharing amounts, whether prior authorization is required for each benefit, and whether there are limits on how much the plan will provide. Currently, most Medicare Advantage enrollees are in plans that offer supplemental benefits not covered by traditional Medicare, such as vision, hearing, and dental, and beneficiaries highlight the availability of extra benefits as a reason they choose to enroll in Medicare Advantage plans.

CMA also announced the launch of an “AI-powered” prescription drug search tool that will provide personalized cost comparisons across pharmacies. While prescription drug costs covered under Medicare Part D, including premiums and deductibles, can change from year to year and vary by plan, most enrollees in Medicare Advantage prescription drug plans (81%) and stand-alone prescription drug plans (69%) in 2023 did not compare their plans’ drug coverage with drug coverage offered by other plans in their area. According to CMS, the new prescription drug search tool will be available on Medicare.gov to users with an individual account but will not be incorporated in the Medicare Plan Finder. This tool could provide more individualized guidance to help Medicare beneficiaries lower their prescription drug costs beyond the prescription drug lookup tool that is already incorporated in the plan finder.

However, these enhancements will require beneficiaries to access the Medicare website and navigate the plan finder, even as just over half (53%) of Medicare beneficiaries said they hadn’t visited the Medicare website, according to KFF analysis of the 2023 MCBS, and it is unknown how many beneficiaries have used the Medicare Plan Finder specifically to compare coverage options or enroll in a plan. But with less than a third (28%) of Medicare beneficiaries comparing their coverage options during a previous open enrollment period for Medicare, enhancements to Medicare Plan Finder and Medicare.gov may help address some of the challenges beneficiaries face when evaluating their coverage options and comparing costs.

Prior authorization practices by health insurers have come under scrutiny in recent years, in part spurred by the public sentiment that delays and denials of care are a problem. According to KFF polling, about seven in ten insured adults say prior authorization is a burden. New evidence from the Office of Inspector General (OIG) within the Department of Health and Human Services documents the high rate of denials of prior authorization requests for certain post-acute care services in Medicare Advantage plans, which now enroll more than half of all Medicare beneficiaries.

The OIG recently published two reports finding that Medicare Advantage insurers deny more than half of all prior authorization requests for the most expensive types of post-acute care, including 65% of requests for stays in long-term care hospitals (LTCHs) and 54% of requests for stays in inpatient rehabilitation facilities (IRFs), as well as 12% of requests for stays in skilled nursing facilities (SNFs). These denial rates are higher, and in the case of LTCHs and IRFs substantially higher, than the overall Medicare Advantage prior authorization denial rate found by KFF in previous analysis of less than 8% for all services (Figure 1). The OIG also found substantial variation across insurers, highlighting the heterogeneous experience Medicare Advantage enrollees could face depending on the private insurer that administers their Medicare benefits.

Insurers use prior authorization to reduce the use of unnecessary or low-value care and to restrain costs. KFF analysis shows that virtually all Medicare Advantage enrollees are in a plan that requires prior authorization for at least some services – most often, high-cost services. For example, in 2026, 95% of Medicare Advantage enrollees are in a plan that requires prior authorization for skilled nursing facility stays. According to the Medicare Payment Advisory Commission (MedPAC), the average Medicare payment in 2023 for traditional Medicare beneficiaries was $43,000 per LTCH stay, $24,000 per IRF stay, and $16,000 per SNF stay.

In 2024, insurers made nearly 53 million prior authorization determinations for Medicare Advantage enrollees. In contrast, prior authorization is rarely used in traditional Medicare (notwithstanding a new Innovation Center model testing the use of AI tools to conduct prior authorization for a limited set of services in traditional Medicare). The new OIG findings suggest the burden of delays and denials from the use of prior authorization is greater for Medicare Advantage enrollees with higher health needs and in more fragile condition. LTCHs generally treat patients with multiple serious conditions, providing services such as respiratory therapy, head trauma treatment, and pain management over the course of hospital stays that extend more than 25 days, on average. IRFs provide intensive rehabilitation services, including for people recovering from strokes or brain injuries. The initial denial of the prior authorization request meant that the requested post-acute care was delayed between 5 and 6 days, on average. In addition to having potential health implications for enrollees seeking post-acute care, the delay could mean higher out-of-pocket spending for the associated hospital stay, because many Medicare Advantage enrollees face daily cost-sharing requirements for hospital stays.

Additionally, the OIG found that when denials were appealed – which happened for 36% of LTCH denials, 31% of IRF denials, and 18% of SNF denials – the requested service was ultimately approved much of the time for LTCHs (36%) and IRFs (43%), and virtually all of the time for SNFs (95%). The extremely high rate of overturning the initial decision upon appeal for SNFs raises questions about whether this care is being routinely inappropriately denied. At the same time, if insurers anticipate that only a relatively small number of initial denials will be appealed, the high overturn rate could reflect a determination by insurers that reversing an initial denial is preferable to having the appeal continue to the next stage. At that point, an independent review entity (IRE) would hear the case, and if the IRE disagrees with the Medicare Advantage insurer’s initial determination to deny a service, that would have a negative impact on a plan’s star ratings.

The findings in the OIG reports are consistent with a previous Senate investigation that found the largest Medicare Advantage insurers denied prior authorization requests for post-acute care at substantially higher rates than other services between 2019 and 2022. Together, these reports underscore the value of having service level data on the use of prior authorization in Medicare Advantage. However, detailed data on the use of prior authorization and denial rates by type of service in Medicare Advantage are not yet required to be reported and therefore not routinely available. The lack of detailed data on prior authorization requests, denials, and appeals has made it difficult to understand the impact on people seeking care and to assess whether initiatives, such as the pledge taken by several private insurers last summer to improve the prior authorization process, are leading to meaningful change. CMS introduced a pilot program to collect more detailed data at the plan and service level this year and anticipates requiring this information beginning in 2027. Nevertheless, it will be several years before those data are available.

On June 1, 2026, the Centers for Medicare and Medicaid Services (CMS) issued an interim final rule providing states with guidance for implementing Medicaid “community engagement” or Medicaid work requirements as part of the 2025 federal budget reconciliation law. The law requires states to condition Medicaid eligibility for enrollees with coverage through the Affordable Care Act (ACA) expansion or under certain waivers on meeting these requirements or qualifying for an exclusion, including one related to being “medically frail or otherwise” having “a special medical need.” In defining medical frailty, the rule introduces a two-part test, requiring an enrollee to both have a qualifying condition and demonstrate that the condition impairs their ability to fulfill the community engagement requirement, differing from stakeholders’ expectations. Early on, and as with Nebraska’s early implementation, states believed they would be able to exclude people based on presence of a condition alone and several states planned to exclude all people with HIV.

On June 29, 2026, twenty-four (24) states and two (2) state governors sued CMS in Massachusetts District Court challenging aspects of the regulation, including its requirement that to qualify for the medical frailty exclusion an enrollee’s condition must significantly impair their ability to comply with community engagement requirements. Among other arguments, the plaintiff states claim this additional requirement is contrary to the reconciliation law (H.R.1) and that “H.R. 1’s broad statutory exclusions exist for good reason. People with disabilities, patients in the middle of cancer treatment, or those struggling with another serious or complex health condition, shouldn’t be at risk of losing the care that helps maintain their health.” Whether the court grants their request to enjoin and vacate the challenged provisions, including the medical frailty two-part test, is yet to be seen.

In the meantime, because Medicaid is the primary source of insurance coverage for people with HIV, this new requirement and state implementation decisions, will have a significant impact on this population’s access to Medicaid going forward and could affect the nation’s efforts to address HIV.

This analysis reviews the implications of the rule’s definition of medical frailty for people with HIV. (For a broad overview of medical frailty, definition of terms, and the impact of the regulation beyond HIV, see this KFF analysis.)

Medicaid expansion is the most common pathway for Medicaid coverage for people with HIV, so many with HIV will be subject to new work / community engagement requirements. Medicaid is the largest source of insurance coverage for people with HIV and plays a larger role in covering adults with HIV than adults without HIV. Nationwide, nearly half (46%) of people with HIV had coverage through the Medicaid program in 2023. In states that have expanded their Medicaid programs, Medicaid expansion is the primary pathway to coverage for people with HIV. In 2023, 60% of adults under age 65 with HIV in expansion states had coverage through the expansion pathway and would be subject to work requirements (see Figure 1). Before states expanded Medicaid programs under the ACA, many people with HIV did not have access to affordable coverage until they had an advanced condition to qualify through a permanent disability pathway and many were uninsured, despite coverage and access to care having the potential to stave disability off in the first place.

The approach to determining medical frailty specified in the rule will make it more difficult for individuals with HIV to obtain a medical frailty exclusion from work requirements. The rule imposes a two-part test that defines as medically frail an individual who is blind or disabled; has a substance use disorder; has a “disabling” mental disorder; has a physical, intellectual, or developmental disability that limits the ability to perform one or more activities of daily living (ADL); or has a “serious or complex” medical condition and whose condition impairs their ability to fulfill the community engagement requirements (including but not limited to work). While the rule includes HIV/AIDS as one of 19 example conditions that would be reasonable for states to consider as a serious or complex medical condition, it further specifies, using HIV as an example, that, “Individuals with HIV/AIDS are medically frail if they are determined to have a serious or complex medical condition that significantly impairs the individual's ability to comply with the community engagement requirement, which is less likely to be the case if the acuity of their condition is not severe.” Access to antiretroviral medication, including through Medicaid, is necessary to manage HIV and prevent immune system dysfunction, illness, and ultimately death. To the extent people with HIV lose access to Medicaid due to work requirements, including failure to navigate reporting rules, they may develop more severe conditions. 

People with HIV whose condition is well managed may qualify as medically frail if they have another medical condition that limits their ability to work. Nearly three-quarters (73%) of people with HIV enrolled in Medicaid have chronic conditions (other than HIV), compared with four in ten (42%) of those without HIV. Alternatively, people with HIV may qualify as medically frail under one of the other categories. Notably, people with HIV are more likely than other Medicaid enrollees to have an SUD or mental health condition. Nearly, one-quarter (23%) of people with HIV had an SUD diagnosis compared to 8% of Medicaid enrollees without HIV and over one-third (36%) of Medicaid enrollees with HIV had a mental health condition diagnosis, some of which may be considered “disabling,” compared to 16% of Medicaid enrollees without HIV. People with HIV also experience high rates of disability--half (50%) of likely Medicaid expansion enrollees with HIV have a disability, including a functional disability (e.g. difficulty climbing stairs, dressing oneself, etc.) or an AIDS (stage III HIV) diagnosis.

The rule requires states to use claims and encounter data to identify individuals who may be medically frail, but does not provide guidance on how to assess whether a condition limits an individual’s ability to meet the community engagement requirements. States will be required to maintain an auditable list of medically frail conditions (in the form of diagnosis codes) that could include HIV. States will have discretion over the creation of this list and may include only some codes for each condition. For example, Nebraska’s list of ICD-10 codes released before the state implemented work requirements on May 1, 2026 only included one of several codes for HIV which would not capture all enrollees with HIV. The rule also makes clear that diagnoses alone cannot be used to determine medical frailty because of the need to assess whether the condition impairs the ability to work or engage in community service. This additional requirement will limit the ability to verify medical frailty on an automated, or ex parte, basis and will require states to use other verification methods.

The regulation offers examples of the types of providers that states could use to verify medical frailty including a range of clinicians. CMS’s inclusion of “clinical social workers” on this list could be especially meaningful for people with HIV given that many get care through clinics with integrated social and support services whose staff help with insurance navigation. However, the administrative burden on treating providers is likely to be significant

For people with HIV, the reliance on data sharing, confirmation from treating providers, and health screeners and self-attestation to verify medical frailty exclusion status may raise unique privacy issues and barriers due to stigma: 

• Data sharing: Some states are exploring using a data-sharing process between the state Medicaid and state public health/HIV office which could help them identify enrollees without HIV related claims histories, including those new to Medicaid. Some states already have a data sharing agreement in place. However, this public health data is highly sensitive, and some have raised concerns about data privacy and security related to HIV status. 
• Provider documentation. As noted, the rule permits states to accept documentation of qualifying conditions and medical frailty from providers. However, the requirement to assess and report the severity of patients’ conditions and the impact on their ability to meet the work requirements may raise ethical concerns for these providers, particularly given the emphasis in HIV care on care engagement for both the patient’s and public health.
• Health screeners and self-attestation. The rule encourages states to use health screeners at application and renewal to identify individuals who may be medically frail, which could include people with HIV. Separately, though its use will be more limited starting in January 2028, most states will also likely allow self-attestation when existing data sources are insufficient to document a qualifying condition and the inability to work. However, the stigma associated with HIV may discourage individuals from disclosing their condition and how it impacts their life.

Coverage loss for people with HIV could negatively impact individual health, public health, and place an increased burden on already stretched HIV programs. Given the new requirements in the regulation, a blanket exclusion for people with HIV will not be possible which will mean a greater staff burden (at the state Medicaid agency and in clinics), higher costs, and potentially wide scale churn, disenrollment, or coverage rejections for those with HIV. While earlier KFF research found that one-third (33%) of likely expansion enrollees with HIV were working at least 20 hours per week and another 4% had dependents at home, the need to document work compliance or medical frailty status, could challenge coverage retention for people with HIV which could lead to disruptions in care and treatment and subsequently increased risk of morbidity, mortality, and HIV transmission. Such a scenario also runs counter to federal goals in the Administration’s Ending the HIV Epidemic Initiative and the Ryan White Program Moving Forward (formerly Ryan White Program 2030) vision. Indeed, four in ten new HIV transmissions are associated with someone who is aware of their HIV status but not in care. Treatment interruptions can also lead to antiretroviral resistance, making future treatment and care more complex. Additionally, if people with HIV lose Medicaid coverage some may turn to the federal Ryan White Program. This comes at a time when state Ryan White Programs across the country are facing budget crises due to a range of factors and coverage losses due to work requirements represent an additional challenge for programs to weather.

The Congressional Budget Office (CBO), known as Congress’s “scorekeeper,” projects federal spending and revenues over the next decade and cost estimates of proposed legislation are measured against those projections. Those projections include spending on major federal programs, such as Medicaid. CBO also typically releases a detailed baseline for federal spending on Medicaid that includes estimates of enrollment by eligibility group and spending by service category. The 2025 reconciliation law, signed into law by President Trump on July 4, 2025, made major changes to federal revenues and spending, with CBO estimating the new law would reduce federal spending on Medicaid by $911 billion over the 2025-2034 period, relative to its January 2025 baseline projections of Medicaid spending under the law and regulations at the time.

CBO’s latest projections of Medicaid spending and enrollment from February 2026 show how enrollment and spending are expected to change over the next decade, accounting for the historic policy changes and their expected reductions in future federal Medicaid spending as well as other economic and technical changes. This policy watch compares CBO’s February 2026 projections of Medicaid spending and enrollment to earlier CBO projections. Projections of spending are compared to those from January 2025 (the baseline used to score the 2025 reconciliation law), but the most recent prior Medicaid enrollment projections are from June 2024. CBO’s newest projections show that enrollment is estimated to be 13% lower and spending 8% lower at the end of the budget windows, highlighting a significant shift in baselines stemming from Medicaid cuts in the 2025 reconciliation law. However, those changes understate the true effects of the 2025 reconciliation law because other factors caused Medicaid baseline spending to increase. 

CBO’s most recent Medicaid projections highlight the effects of the 2025 reconciliation law in reducing future Medicaid spending. The most recently released detailed CBO baseline shows that, following passage of the Medicaid changes in the reconciliation law, Medicaid spending is now expected to grow more slowly over time relative to earlier projections. As a result, 2035 spending is projected to be 8% lower than it was in the January 2025 baseline ($941 billion instead of $1.03 trillion, Figure 1). Over the entire 2025-2035 period, federal Medicaid spending in CBO’s latest baseline is projected to be $503 billion lower than estimated in the January 2025 baseline, before the passage of the 2025 reconciliation law. The reconciliation law included major changes to Medicaid eligibility, including the implementation of new Medicaid work requirements, and substantial changes to Medicaid financing, which together contribute to Medicaid’s lower baseline compared with prior years. CBO projects that federal Medicaid spending will still grow but more slowly because of the reductions in the reconciliation law. As a result, fewer people will be covered, and aggregate federal Medicaid spending will likely not keep pace with the increase in health care costs.

CBO’s latest spending projections also account for economic and technical changes that increased Medicaid spending relative to the January 2025 baseline, so comparing baselines may understate the effects of Medicaid cuts in the 2025 reconciliation law. One of the biggest reasons for increased spending was higher-than-expected per enrollee spending in 2025. CBO reports that costs per enrollee grew by 16% in that year, primarily because of declining health status after the COVID-19 continuous enrollment period ended. Those higher 2025 costs per enrollee compound over time due to inflation and rising health care costs. If the most recent baseline projections did not account for those 2025 cost increases, the differences between January 2025 and February 2026 Medicaid spending projections, driven by the Medicaid policy changes in the reconciliation law, would be larger.

CBO’s latest Medicaid projections also show the impact of the 2025 reconciliation law on reducing future Medicaid enrollment. The latest baseline shows that total average annual Medicaid enrollment is expected to decline, falling to 74 million enrollees by 2034 (a 13% reduction) compared with 85 million projected in the detailed baseline released before the new law’s passage. Many individuals who lose Medicaid coverage do not have another source of affordable health coverage and will become uninsured. CBO’s earlier estimates of the Medicaid policy changes in the reconciliation law found the new law will reduce Medicaid enrollment by more than 11 million and increase the number of people without insurance by 7.5 million in 2034, though these estimates do not account for recently released rules related to work requirements that could affect enrollment projections. CBO may release updated coverage estimates in the coming months. Data show that being uninsured has implications for access to care, financial stability, and health outcomes.

Reductions in future Medicaid enrollment shown in CBO’s most recent projections are concentrated among ACA expansion adults, other adults, and children. The eligibility changes in the 2025 reconciliation law primarily affect adults in the ACA Medicaid expansion group (including new work requirements and more frequent eligibility determinations). Comparing CBO’s projections with those prior to passage of the reconciliation law shows the largest change in enrollment among the ACA Medicaid expansion group (5 million fewer expansion enrollees in 2034). The latest detailed baseline also shows 3 million fewer children and 2 million fewer other adult enrollees than the previous detailed baseline, likely due to provisions that affect groups beyond the expansion group and research showing that coverage loss among parents may reduce enrollment among children.

In recent years, federal payments to Medicare Advantage plans, and how they are adjusted for enrollee health status, have come under increased scrutiny. Medicare Advantage plans receive a capitated amount for each enrollee, and these payments are “risk adjusted” based on the diagnosis codes reported by the insurer to the Centers for Medicare & Medicaid Services (CMS) for each enrollee. Plans receive higher payments for enrollees who are sicker and expected to have higher health care spending, and lower payments for enrollees who are healthier and expected to have lower health care spending. The purpose of this risk adjustment is to ensure plans receive adequate payments to treat sicker, higher-cost patients and reduce incentives to enroll primarily healthier, lower cost, beneficiaries. However, since the approach to risk adjusting payments relies heavily on the diagnosis codes recorded for Medicare Advantage enrollees, it provides a strong financial incentive for private insurers to capture as many diagnosis codes for each enrollee as possible, which increases payments and contributes to higher Medicare spending.  

In contrast, payments under traditional Medicare only require the diagnosis codes necessary to support the services delivered. This means physicians and other health care providers do not have the same incentive to maximize the number of health care conditions documented through diagnosis codes. Differences in coding practices between traditional Medicare and Medicare Advantage (also referred to as coding intensity) mean that Medicare Advantage enrollees appear to be in worse health than they would if they received their Medicare benefits through traditional Medicare. Since the Medicare Advantage risk adjustment model is calibrated on traditional Medicare beneficiaries, the payments to Medicare Advantage plans are higher than necessary to cover expected costs, on average. According to the Medicare Payment Advisory Commission (MedPAC), in 2026, total payments to Medicare Advantage plans are $76 billion higher than traditional Medicare would spend for the same beneficiaries, of which $28 billion is attributed to coding intensity.

CMS has expressed a commitment to improving the accuracy of payments to Medicare Advantage and reducing the role coding practices play in determining the amount private plans receive from the federal government. Toward this end, the 2027 rate notice finalized a policy changing how certain diagnoses are considered when adjusting federal payments to Medicare Advantage plans for an enrollee’s health status. As policymakers and administration officials consider issues related to Medicare Advantage payments, this issue brief answers key questions about coding intensity, recent steps taken by CMS to address the impact of coding on payment, the effects on Medicare beneficiaries, and other proposals to improve Medicare Advantage payment accuracy.

What is coding?

Doctors and other health care providers include diagnosis codes on claims they submit to payers (either Medicare Administrative Contractors (MACs) for traditional Medicare or private insurers for Medicare Advantage) indicating a patient’s health conditions that support the health care services they delivered. The diagnosis codes for traditional Medicare beneficiaries are also used by CMS, along with other information, to develop a risk adjustment model estimating the relationship between a person’s health status (expressed as a “risk score”) and their projected health care spending. Medicare Advantage insurers submit the diagnosis codes documented by health care providers serving their enrollees to CMS for use in adjusting the payments the plans receive from the federal government using this risk adjustment model.

While the diagnosis codes used to develop the risk adjustment model only come from the claims providers submit for services rendered to traditional Medicare beneficiaries, those used to adjust payments to Medicare Advantage plans can be supplemented in two ways. First, Medicare Advantage plans may conduct health risk assessments (HRAs) and include the diagnosis codes for any conditions identified during this questionnaire in what is submitted to CMS – even when there are no related services delivered during the year to treat those conditions. KFF analysis finds that insurers often use rewards and incentives to encourage enrollees to complete HRAs. Second, Medicare Advantage plans may conduct chart reviews, which examine a person’s medical records, sometimes using AI tools, to determine if they are consistent with the information submitted by health care providers to the insurer. KFF analysis finds that chart reviews are used to add diagnosis codes that do not otherwise appear on a record for an encounter with a physician, increasing payments from CMS to Medicare Advantage insurers for one in six Medicare Advantage enrollees.

What is coding intensity?

Coding intensity is the degree to which a person’s health care conditions are documented through diagnosis codes. Differences in coding patterns across groups of beneficiaries, such as Medicare Advantage enrollees and traditional Medicare beneficiaries, or those in Medicare Advantage plans sponsored by different insurers, are described as differences in coding intensity. Higher coding intensity is not necessarily fraudulent, but fraud can contribute to higher coding intensity.

Because Medicare Advantage payments are generally higher for enrollees with more diagnosis codes (and therefore higher risk scores), private insurers have an incentive to document more health conditions, but there is no similar incentive in traditional Medicare. Recognizing this incentive, lawmakers have required CMS to reduce Medicare Advantage risk scores by at least 5.9% across the board before adjusting payments to private plans. However, that adjustment does not fully account for difference in coding patterns, and a number of studies have documented that risk scores are still higher in Medicare Advantage after applying the coding intensity adjustment than they would be if enrollees received their Medicare benefits under traditional Medicare. The magnitude of the uncorrected coding intensity after the adjustment has varied over time, ranging from as low as 2% in 2016 to 10% in 2023, and is estimated to be approximately 4% in 2026, according to MedPAC. The magnitude also varies by insurer and is larger for insurers comprising a larger share of enrollment. See Box 1 for an illustrative example of higher coding intensity and the effect on Medicare Advantage payments.

What has CMS done to reduce coding intensity?

Risk Model Revisions. CMS periodically revises the risk adjustment model. Most recently, CMS updated the data used to calibrate the model and changed how certain conditions that were coded more frequently in Medicare Advantage than traditional Medicare were incorporated (or not). The move to the new model (referred to as V28 because it is the 28^th version of the model) was phased in between 2024 and 2026.

Following full implementation of the new risk adjustment model, MedPAC estimated that the impact of coding intensity on Medicare Advantage payments has declined from increasing payments by 10% in 2022 to 4% in 2026 (the first year the V28 model is fully in effect). A recent analysis from CMS staff approached the analysis from a different angle – examining what the impact of using V28 would have been in 2022 if it had been in effect. That analysis finds uncorrected coding intensity (after applying the 5.9% adjustment) would have been between 1.5% and 2.0%, compared to 10% under the previous risk adjustment model (V24) that was in effect in 2022. This is consistent with the findings of other researchers, but the estimate for 2022 is not directly comparable to the MedPAC analysis because the CMS analysis modeled the impact of V28 in an earlier year in which it was not in effect, while MedPAC looks at the uncorrected coding intensity using the risk model in effect in the current payment year (2026).

Analyses of Medicare Advantage risk score trends have consistently found that coding intensity grows over time. Thus, the CMS staff estimate that uncorrected coding intensity would have been between 1.5% and 2.0% if the V28 model had been fully implemented in 2022 is consistent with MedPAC’s higher estimate of uncorrected coding intensity in 2026 of 4%, which incorporates growth in coding intensity between 2022 and 2026.

Coding Intensity. CMS also routinely makes other changes to the risk adjustment process separate from moving to a new model. For example, in the 2027 rate notice, CMS finalized a policy to exclude diagnosis codes added for enrollees based on chart review records that are not linked to an encounter with a health care provider (referred to as “unlinked” chart reviews). CMS estimates the new policy will reduce average payments to Medicare Advantage plans by 1.5% compared to what they would have been otherwise. While that estimate is similar in magnitude to the CMS staff estimate of uncorrected coding intensity in 2022 if the V28 model had been in effect, the two are not directly comparable because the impact of removing unlinked chart reviews applies to the 2027 plan year payment.

The use of chart reviews has come under scrutiny because analysis of Medicare Advantage insurers’ coding practices consistently finds that chart reviews are the primary contributor to higher coding intensity in Medicare Advantage. However, chart reviews are likely to continue to contribute to higher coding intensity in Medicare Advantage even after excluding diagnoses from unlinked chart reviews. Based on KFF analysis of Medicare Advantage encounter data for 2022, diagnoses from unlinked chart reviews comprised one-third of all diagnoses added through the chart review process in 2022, meaning that diagnoses from chart reviews that were linked to an encounter account for most of the diagnosis codes added during the chart review process.

Additionally, it is likely that an even smaller share of all diagnoses added on chart reviews will be impacted by the new policy to exclude diagnosis codes from unlinked chart reviews because the condition categories for which specific diagnoses were most commonly added in an unlinked chart review in 2022 were substantially impacted by the move to the V28 risk adjustment model. For example, vascular disease was among the most common conditions added on an unlinked chart review in 2022 that increased payment, but this condition category was substantially narrowed as part of the shift to V28 – meaning that many of these diagnoses codes would no longer count towards payment under the risk adjustment model regardless of the policy change related to unlinked chart reviews. Finally, the impact could be less than CMS estimates if insurers put more effort into linking chart reviews to encounters so that included diagnoses can be considered for risk adjustment purposes.

How are Medicare beneficiaries impacted by coding intensity and changes to the risk adjustment model?

Since higher risk scores increase Medicare payments to plans, higher coding intensity provides plans with the option to offer more extra benefits to enrollees, such as dental, vision, and hearing coverage, as well as reduced cost sharing. In addition, this additional funding from the federal government can be used for other purposes, such as increasing plan margins or paying for more advertising, as long as the Medicare Advantage insurer meets the minimum medical loss ratio required under law. (The medical loss ratio is the share of premium revenues going to pay for claims versus administrative overhead and profit.) 

Industry representatives have raised concerns that payment changes, including efforts to address coding intensity, could result in plans offering fewer extra benefits or raising costs for Medicare Advantage enrollees. While there have been some changes to plan benefits and costs following the implementation of V28, including modest increases in out-of-pocket limits and decreases in some extra benefits, such as the availability of funds provided to pay for over-the-counter drugs and supplies, private insurers have generally absorbed a large portion of payment changes. An analysis of the first two years of the phase in of the new risk score model finds that insurers reduced benefits or raised costs by between 17% and 24% of the anticipated reduction in plan payments. That is a smaller effect than previous analysis of the impact of changes to Medicare Advantage payments, which found that private insurers passed through about half of the payment change in the form of fewer benefits and/or higher costs.

What additional steps can be taken to improve the accuracy of Medicare Advantage payments?

Policy proposals to address the remaining uncorrected coding intensity in Medicare Advantage include expanding the sources of diagnoses that are ineligible for risk adjustment to include all chart reviews and HRAs, increasing the 5.9% across-the-board adjustment to risk scores, or applying a tiered adjustment to risk scores based on historical coding intensity (so plans with higher coding intensity in previous years would have larger adjustments to their risk scores). Additionally, updates to the risk score model, such as those proposed but not finalized by CMS for 2027, may also better align the adjustments for health status to the expected impact on spending by incorporating more recent data to better reflect current treatment patterns and costs.

Beyond coding intensity, favorable selection into Medicare Advantage also increases payments above what traditional Medicare would spend for the same beneficiaries. Favorable selection occurs when the people who enroll in Medicare Advantage have lower actual health care use and spending, on average, than what is predicted by the risk score model. For example, previous KFF analysis found that Medicare beneficiaries who enroll in Medicare Advantage have lower spending than those who remain in traditional Medicare, after adjusting for health risk using the risk adjustment model. MedPAC estimates that the largest component of higher payments to Medicare Advantage plans relative to traditional Medicare is favorable selection into Medicare Advantage. The impact of favorable selection has been relatively stable over time, ranging between 9% and 11%, according to MedPAC; in other words, resulting in payments to Medicare Advantage plans for enrollees that are 9% to 11% higher than costs would be in traditional Medicare. In 2026, favorable selection is estimated to add $57 billion to Medicare spending.

To address the impact of favorable selection on Medicare Advantage payments, policymakers could make changes to the maximum amount the federal government is willing to pay Medicare Advantage plans, also known as benchmarks. One approach is an across-the-board reduction in benchmarks, such as the “discount rate” proposed by MedPAC. This would account for Medicare Advantage enrollees having lower expected health care spending, before any effects of Medicare Advantage plan design, than traditional Medicare beneficiaries with similar risk profiles, on which current benchmarks are based. Other options include expanding the sources of data used in the risk adjustment model to predict a Medicare Advantage enrollee’s costs, such as prescription drug claims, clinical data from electronic health records, or certain measures currently included in the Consumer Assessment of Healthcare Providers and Systems (CAHPS) (see for example, a recent proof-of-concept study). These measures could be applied on equal footing between Medicare Advantage and traditional Medicare, and among different Medicare Advantage plans. In addition, two-sided reinsurance, which would provide additional payments to insurers with enrollees who have extremely high and unexpected costs and require insurers with enrollees with substantially lower than predicted spending to make payments into the program, could be added to the Medicare Advantage payment system. That would reduce the financial rewards for attracting enrollees who use substantially fewer health care services and protect insurers against the financial costs of enrollees who use substantially more health care services.