Modest payment increase for Medicare Advantage in 2017

Medicare says private insurance plans serving as an alternative for 17 million beneficiaries will get a modest payment increase next year.

Factoring in adjustments for the health of patients covered by a plan, the final number works out to about a 3 percent increase for Medicare Advantage and Part D prescription plans. That's slightly less than an originally proposed increase of around 3.5 percent.

Medicare made the announcement Monday after the close of financial markets.

Medicare also announced a transition period for some employer-sponsored plans that were facing a cut. It will be spread over two years.

Medicare Advantage plans cover nearly one out of three beneficiaries, a steadily growing share of the program. They offer lower overall costs for many patients, in exchange for some limitations on choice.