Should Medicare Advantage Be the Default? What a New Proposal Could Mean for You
A new proposal is stirring debate across the healthcare and retirement planning world: should Medicare Advantage plans become the default for newly eligible Medicare beneficiaries? While the move could streamline enrollment and increase access to coverage, it also raises major concerns about freedom of choice, provider access, and cost—both for individuals and taxpayers.
Let’s break down what this change could mean for you or your loved ones.
What’s Being Proposed?
The proposal would automatically enroll eligible individuals into a Medicare Advantage (MA) plan unless they actively opt out. These plans, run by private insurers, already cover more than half of all Medicare beneficiaries—34 million out of 67 million in 2024. Supporters believe default enrollment could reduce missed deadlines and ensure people receive more comprehensive coverage, especially those unaware of the complexities of Medicare enrollment.
But critics argue it could cost taxpayers billions and reduce people’s ability to choose the right coverage for their personal health and financial needs.
How Medicare Enrollment Works Today
Currently, when someone becomes eligible for Medicare, they must actively enroll in Part B and decide between two main coverage paths:
- Traditional Medicare (Parts A & B) plus a standalone Part D plan and an optional Medigap supplemental plan.
- A Medicare Advantage plan, which bundles Part A, Part B, often Part D, and additional perks like dental, vision, and gym memberships.
MA plans offer broader benefits but often come with prior authorization requirements, limited provider networks, and restrictions on specialist access. Traditional Medicare provides broader provider choice with fewer hurdles, but beneficiaries must actively seek supplemental coverage to avoid out-of-pocket costs.
The Benefits of Default Enrollment
Proponents of default enrollment point to several advantages:
- Fewer Missed Deadlines: Enrollment deadlines during the Initial and Special Enrollment Periods can be confusing. Defaulting into an MA plan could ensure people aren’t left without essential coverage.
- Comprehensive Benefits: MA plans often offer added perks not included in Original Medicare, such as vision, dental, and hearing.
- Simplified Process: Automatically enrolling new beneficiaries could make the system easier to navigate for those overwhelmed by Medicare’s many parts and rules.
The Downsides: What Could Go Wrong?
While the idea may sound convenient, default enrollment comes with significant trade-offs:
- Provider Access: MA plans have smaller doctor and hospital networks. Default enrollment may place someone in a plan that excludes their preferred providers.
- Mismatched Drug Coverage: Beneficiaries may find their prescriptions are not covered or require higher out-of-pocket costs if the default plan’s formulary isn’t aligned with their needs.
- Freedom of Choice: Automatically assigning a plan could compromise individuals’ right to shop around for a better fit. While they can opt out, many may not realize they have that option.
- Increased Red Tape: Prior authorizations and referrals, common in MA plans, could delay treatment and frustrate both patients and providers.
What About the Cost?
Financially, default enrollment could be costly:
- The federal government already spends 20% more per person on Medicare Advantage enrollees than on those in traditional Medicare.
- That extra cost translates into $84 billion in excess spending projected for 2025 and up to $269 billion over the next decade.
- Beneficiaries could also feel the pinch. Medicare Part B premiums rose from $144.60 in 2020 to $185 in 2024, in part due to higher federal spending.
For comparison, a traditional Medicare + Plan G supplement provides predictable coverage with a monthly premium of $150–$180 and a fixed annual deductible ($257 in 2024), avoiding the uncertainty and limitations of MA plans.
Is This Even Legal or Feasible?
Any major change like this must go through the Center for Medicare & Medicaid Innovation (CMMI), which is tasked with testing new models that improve care without raising costs. It’s unclear whether this proposal meets those criteria. A rollout would require:
- Pilot Testing: Regional or national pilots to determine impact on cost and care quality.
- Fair Plan Assignment: Beneficiaries must be matched with suitable plans, ideally factoring in healthcare needs and geography.
- Clear Communication: Opt-out processes, plan summaries, and doctor network information must be transparent and accessible.
Final Thoughts
The idea of default enrollment in Medicare Advantage plans may sound like a step toward simplifying healthcare. But under the surface, it’s far more complicated and potentially expensive. While it could help ensure more people are covered, it also risks undermining individual choice and creating administrative headaches for patients and providers alike.
For now, the best strategy is to stay informed and review your Medicare options carefully. Whether you prefer the flexibility of traditional Medicare or the added perks of a Medicare Advantage plan, the key is understanding the pros, cons, and costs of each.
