Last year, for the first time ever, a majority of Americans eligible for Medicare were on privatized Medicare Advantage plans. If Republicans win the presidential race this year, the push to fully privatize Medicare, the government health insurance program for seniors and people with disabilities, will only intensify.
Conservative operatives have already sketched out what the GOP’s policy agenda would look like in the early days of a new Donald Trump presidency. As Rolling Stone has detailed, the proposed Project 2025 agenda is radically right-wing. One item buried in the 887-page blueprint has attracted little attention thus far, but would have a monumental impact on the health of America’s seniors and the future of one of America’s most popular social programs: a call to “make Medicare Advantage the default enrollment option” for people who are newly eligible for Medicare.
Such a policy would hasten the end of the traditional Medicare program, as well as its foundational premise: that seniors can go to any doctor or provider they choose. The change would be a boon for private health insurers — which generate massive profits and growing portions of their revenues from Medicare Advantage plans — and further consolidate corporate control over the United States health care system.
It would not likely benefit seniors, since the private plans limit the doctors they can see and often wrongfully deny patients’ care. Because the plans are costly, experts say the GOP proposal could threaten the Medicare program’s solvency.
Philip Verhoef, president of the single-payer advocacy group Physicians for a National Health Program, tells Rolling Stone it would be “disastrous” to make Medicare Advantage the default enrollment option. “To do so would be really just a clear handout to the private insurance industry,” he says.
David Lipschutz, associate director of the Center for Medicare Advocacy, says the plan would “greatly accelerate” Medicare privatization.
Project 2025, which is being spearheaded by the influential Heritage Foundation, describes its presidential transition project as “the conservative movement’s unified effort to be ready for the next conservative Administration to govern at 12:00 noon, January 20, 2025.”
Established in 1973, the Heritage Foundation has long exerted influence in GOP administrations — and perhaps never more so than in the one led by Trump. One year into his presidency, the Heritage Foundation wrote that “Trump and his administration have embraced nearly two-thirds of the policy recommendations” in its “Mandate for Leadership.”
The latest “Mandate for Leadership,” the Project 2025 agenda written by the Heritage Foundation and like-minded conservative organizations, would reshape the future of the Medicare program and push more seniors into alternative, privatized Medicare Advantage plans.
The trend toward privatization is already happening — a slim majority of Medicare beneficiaries is now enrolled in private Medicare Advantage plans. Trump helped advance this trend as president.
As The New York Times reported in 2018, during Medicare’s open enrollment period, the Trump administration emailed messages to millions of beneficiaries touting the private plans. Some of the emails included subject lines like, “Get more benefits for your money,” and “See if you can save money with Medicare Advantage.”
Trump’s administration also helped make Medicare Advantage more attractive by expanding the range of perks the plans can offer to enrollees, allowing them to add benefits such as transportation to doctors’ offices and meal delivery.
A spokesperson for Trump did not respond to questions from Rolling Stone about whether the former president supports the Project 2025 proposal.
Former South Carolina Gov. Nikki Haley, Trump’s sole remaining GOP primary opponent, has said she wants to “expand Medicare Advantage plans, which seniors love.”
Lipschutz, of the Center for Medicare Advocacy, says the Project 2025 plan would “violate the free choice of provider provision and principle of the Medicare Act, which guarantees that people will have a free choice of provider.”
Under traditional Medicare, enrollees are free to visit any doctor who accepts Medicare (nearly all physicians do). Medicare Advantage plans, by contrast, often have limited networks of doctors that patients can choose from, and many providers have stopped accepting the private plans because they so often deny the prior authorization requests they require before patients can receive services.
Lipschutz notes the Project 2025 plan says that Republicans would “give beneficiaries direct control of how they spend Medicare dollars.” He says this is “internally inconsistent” with its proposal to make Medicare Advantage the default enrollment option. Medicare Advantage plans, he says, are “tasked with managing your care, and telling you what you can and can’t do, and what is and is not covered — that is the opposite of putting beneficiaries in control of how they spend their dollars.”
It’s natural that beneficiaries might see some appeal in Medicare Advantage plans. Traditional Medicare leaves patients with significant out-of-pocket costs — which is why many enrollees in the traditional program pay for supplemental Medigap coverage. Medicare Advantage plans also promise to limit these costs. And unlike the traditional Medicare program, the private plans can offer dental, vision, and hearing benefits.
But the private plans often do not work well for sicker patients — and when they seek to leave the program and enroll in traditional Medicare, they may encounter an expensive problem: Most states allow Medigap plans to deny coverage to patients with preexisting health conditions, so these patients can get stuck with significant out-of-pocket costs.
While Medicare Advantage plans are required to pay for services covered by traditional Medicare, the government has for years flagged “persistent problems related to denials of care and payment in Medicare Advantage.” More recently, news reports have found the private plans are using artificial intelligence and algorithms to deny services in bulk, with extreme error rates — allegedly as high as 90 percent, according to one class action lawsuit.
The Biden administration has issued new rules and guidance to try to ensure that Medicare Advantage plans do as they are required and approve the same services as traditional Medicare. But the financial incentive to deny care is baked into the Medicare Advantage model: The private plans are given a fixed amount of money every month to provide coverage for each enrollee; paying out fewer dollars means extra profit.
Lipschutz says making Medicare Advantage the default enrollment option would “accelerate program insolvency because Medicare Advantage [costs] so much more than traditional Medicare.”
The privatized plans have, for years, systematically overbilled the government — mostly by billing the government as if their patients are sicker than they really are. The Biden administration has worked to claw back some of those past overpayments and rein in future outlays. Industry lobbyists and lawyers have aggressively fought these efforts.
MedPAC, an independent congressional advisory agency, projects that the federal government will overpay Medicare Advantage plans by $88 billion this year.
Lipschutz notes the Project 2025 plan includes a few Medicare Advantage reform ideas that could save the government money, depending on the details. However, he says, if “you increase enrollment in Medicare Advantage, you further threaten and put more pressure on Medicare’s finances.”