A Medicare Advantage bid is the amount a plan submits to CMS representing the plan's estimated cost to provide Medicare-covered benefits to an average beneficiary. If the bid is below the benchmark, the plan receives a rebate. If the bid is above the benchmark, the plan charges a premium.
Key Points
- Bid: plan's estimated cost to provide Medicare-covered benefits
- Bid below benchmark: plan receives a rebate
- Bid above benchmark: plan charges a premium
- Bids are submitted annually
- Higher-quality plans often bid below the benchmark and offer additional benefits