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When enrolling in Medicare for the first time, Medicare beneficiaries are currently deemed to have chosen traditional Medicare if they do not affirmatively choose a Medicare Advantage plan. This default into traditional Medicare is explicitly required by Medicare statute and has been the way the program has operated since the 1970s, when private plans became available to new Medicare enrollees.
Some policy proposals over the years, including Project 2025, would instead have beneficiaries default into Medicare Advantage plans. Given the prominence of Project 2025 in guiding current federal policy making, and the greatly expanded role of private plans in the Medicare program since the 1970s, it is timely to examine what defaulting into Medicare Advantage could mean now for Medicare beneficiaries and the Medicare program.
Beneficiaries' initial enrollment choices, whether active or passive, tend to have long-lasting implications because beneficiaries tend to keep the coverage they obtain in their first few years. From 2022 to 2024, only about 8 percent of new enrollees switched from traditional Medicare to Medicare Advantage, and an even smaller proportion, about 1 percent, switched from Medicare Advantage to traditional Medicare. Switching between Medicare Advantage plans is also uncommon: Only about 12 percent of enrollees did so during this period.
Individuals leaving Medicare Advantage tend to have greater health care needs, such as a debilitating condition or advanced age; are more likely to be Black, Asian, American Indian, or Alaskan Native; and more likely to be dually eligible for Medicare and Medicaid than individuals who stay in Medicare Advantage. People who leave Medicare Advantage are also more likely than those who stay to live in rural areas, which may reflect fewer plan options in rural areas or other differences between rural and urban private plans. Financial reasons (23 percent) and provider coverage (23 percent) are the most frequently cited motivations for leaving.
https://www.healthaffairs.org/conte...age-could-mean-medicare-and-its-beneficiaries
Some policy proposals over the years, including Project 2025, would instead have beneficiaries default into Medicare Advantage plans. Given the prominence of Project 2025 in guiding current federal policy making, and the greatly expanded role of private plans in the Medicare program since the 1970s, it is timely to examine what defaulting into Medicare Advantage could mean now for Medicare beneficiaries and the Medicare program.
Why The Default Option Matters
Such a policy shift would affect millions of Americans. More than three million individuals enroll in Medicare annually and thus could potentially be directly affected by a change in default enrollment. The Medicare program does not track the number of beneficiaries who actively choose traditional Medicare as opposed to defaulting into it, but it is likely that a default-to-Medicare-Advantage policy would accelerate the growth in Medicare Advantage and hasten the decline of traditional Medicare enrollment.Beneficiaries' initial enrollment choices, whether active or passive, tend to have long-lasting implications because beneficiaries tend to keep the coverage they obtain in their first few years. From 2022 to 2024, only about 8 percent of new enrollees switched from traditional Medicare to Medicare Advantage, and an even smaller proportion, about 1 percent, switched from Medicare Advantage to traditional Medicare. Switching between Medicare Advantage plans is also uncommon: Only about 12 percent of enrollees did so during this period.
Individuals leaving Medicare Advantage tend to have greater health care needs, such as a debilitating condition or advanced age; are more likely to be Black, Asian, American Indian, or Alaskan Native; and more likely to be dually eligible for Medicare and Medicaid than individuals who stay in Medicare Advantage. People who leave Medicare Advantage are also more likely than those who stay to live in rural areas, which may reflect fewer plan options in rural areas or other differences between rural and urban private plans. Financial reasons (23 percent) and provider coverage (23 percent) are the most frequently cited motivations for leaving.
https://www.healthaffairs.org/conte...age-could-mean-medicare-and-its-beneficiaries
