Medicare Advantage could become the default health-insurance program for all older adults.
A recent proposal in Congress would automatically enroll older adults in a Medicare Advantage plan and then lock them into that plan for three years — unless they actively opt for traditional Medicare coverage.
The proposal sponsored by U.S. Rep. David Schweikert, an Arizona Republican, would automatically put people 65 and older into the lowest-cost Medicare Advantage plan in their area starting in 2028. Those enrollees would be unable to change to any other plan for three years.
The proposal, HR 3467, does allow people to opt out and choose traditional Medicare, but the process for doing that is not detailed in the bill, and critics said many people may lack the insurance savviness they might need to choose that option.
The bill also doesn’t require the private insurers who provide Medicare Advantage plans to keep the same network or cost structure over those three years, said Ari Parker, co-founder of Chapter, a private company that helps people navigate Medicare plans and the author of “It’s Not That Complicated,” a guidebook to Medicare.
That means an older adult could be locked into a network that becomes more expensive over time or becomes less relevant to them, for instance if the network changes and they lose their doctor, Parker said.
A total of 68.6 million people age 65 and older are enrolled in Medicare plans, with 51.2% of those people enrolled in Medicare Advantage plans, according to the Centers for Medicare & Medicaid Services. The balance of enrollees are in traditional Medicare.
Normally, people 65 and older make choices about their Medicare coverage each year during open enrollment season, which runs from mid-October until December. During that time, beneficiaries can switch between traditional Medicare to a Medicare Advantage plan, enroll in or change Part D prescription drug plans and add supplemental insurance known as Medigap. Those changes go into effect on Jan. 1 of the following year.
During Medicare Advantage’s open enrollment period, which runs from Jan. 1 to March 31 each year, beneficiaries can switch to another Medicare Advantage plan or drop their Medicare Advantage plan and return to original Medicare. Those changes go into effect on the first day of the month following the plan’s receipt of the request.
Medicare Advantage is the privately run alternative to traditional Medicare. Medicare Advantage plans provide supplemental benefits that traditional Medicare does not cover, such as dental and vision care, and many plans also provide allowances for over-the-counter medications, hearing care and fitness benefits, and some provide allowances for groceries or meal-delivery services.
There is a trade-off for those extras, however, because most Medicare Advantage plans dictate what network of doctors a beneficiary can see and require prior authorization or referrals for some treatments.
Medicare Advantage costs the government — and taxpayers — more than traditional Medicare. The government spends 6% more for Medicare Advantage enrollees than it would spend if those beneficiaries were enrolled in traditional Medicare — for a total of $27 billion in additional costs in 2023, according to a report to Congress by the Medicare Payment Advisory Commission.
‘The devil is in the details’
Concerns raised about Schweikert’s proposal include its failure to demand certain changes of the Medicare Advantage plans to ensure they would be able to handle an influx of new enrollees, and also a lack of details about what would happen if an enrollee’s doctor was dropped from their network.
“There’s no assurance they have the capacity to handle all those enrollees. Medicare Advantage is already denying services. Quality would suffer very dramatically. It would reduce choice dramatically,” said Robert Berenson, a fellow in the health policy division at the Urban Institute, a nonprofit research organization. “I don’t see any merit to this proposal at all.”
He added: “Medicare Advantage is more costly [for the government]. Why put everyone into a more expensive plan? It would be terrible for taxpayers.”
The bill also proposes other changes to Medicare Advantage plans, such as requiring the plans to make capitated payments — fixed, per-patient fees — to healthcare providers as opposed to paying for each individual service. There’s also a provision to reduce government payments to Medicare Advantage plans by lowering reimbursement rates.
Other proposed changes include a provision that would require Medicare Advantage plans to pay for hospice care. Under current law, Medicare Advantage doesn’t pay for hospice care, and beneficiaries shift to traditional Medicare if they enter hospice.
Another area of change includes the elimination of bonus payments for high quality ratings, as well as risk-assessment changes to how Medicare Advantage plans document patient health conditions for payment purposes that would allow only a diagnosis from a doctor visits and not from chart reviews.
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The proposed risk-assessment changes could reduce waste, fraud and abuse by Medicare Advantage plans, Parker said.
CMS did not respond immediately to a request for comment. A representative for Schweikert also did not respond to a request for comment. The bill was referred to the House Ways and Means Committee, as well as the House Committee on Energy and Commerce.
Schweikert’s fifth-largest campaign donor was CVS Health, which offers Medicare Advantage plans through its Aetna business. The company gave Schweikert a contribution of $16,600 in the 2024 election, according to OpenSecrets. He raised a total of nearly $4.2 million in that election cycle.
Regarding the future of the bill, Michael Cannon, director of health policy studies at the Cato Institute, a libertarian think tank, said “the devil is in the details.”
“There are ways to make Medicare Advantage the default that are worse than others. While Congressman Schweikert’s proposal is one of the less bad ones — in that it chooses the lowest premium Medicare Advantage plan, which could save money — it’s very ripe for abuse,” he said.
“A big concern with any effort to make Medicare Advantage the default is that Republicans are irrationally in love with subsidizing private insurance companies with Medicare Advantage. Reform could get out of hand,” Cannon said.
The Medicare Advantage industry trade group said there are ways to strengthen the Medicare Advantage program, but it did not comment on the details of Schweikert’s proposal.
“Seniors should feel empowered to choose the health coverage that best fits their health needs, lifestyle, and budget. Today, more than half choose Medicare Advantage for better care at a lower cost … and seniors should continue to have that choice,” Mary Beth Donahue, president and chief executive of Better Medicare Alliance, a trade group for Medicare Advantage, said in an emailed statement.
“With more than 34 million Americans enrolled in Medicare Advantage, there are better ways to support and strengthen this critical program, and we look forward to continuing our work with policymakers to achieve those commonsense solutions,” she said.
