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Senior living operators with value-based offerings are getting a boost from a nearly doubled Medicare Advantage (MA) capitation rate in 2026.
The Centers for Medicare & Medicaid Services (CMS) previously announced a 5.06% increase in MA capitation rates, higher than what some analysts expected, including Macquarie Senior Healthcare Equities Research Analyst Tao Qiu. A capitation rate is a fixed monthly payment that operators or their partners get for beneficiaries of MA and special-needs plans. Senior living operators use value-based care and other kinds of reimbursable plans to coordinate resident care and connect them with certain services without adding to their expenses at the end of the day.
Senior living is a private-pay business and many operators don’t take public dollars. But for those with MA plans or value-based care arrangements, a higher capitation MA rate means providers will receive a greater amount of reimbursement per beneficiary per month, allowing operators to potentially retain more margin and have residents stay longer. That could result in more revenue and an opportunity to expand MA and other kinds of payment options for residents, according to Larry Gumina, CEO of Ohio Living.