So, will the new administration embrace Medicare privatization further? 

Medicare is our largest government-sponsored health insurance program, but substantial parts of the program have been privatized. Part D prescription drug and Medigap supplemental plans are offered exclusively by private insurance companies. 

Medicare Advantage, the commercial alternative to traditional government-sponsored Medicare coverage, competes for enrollment with the traditional plan and now accounts for over half of total enrollment. At this rate, Medicare Advantage is expected to cover 64% of beneficiaries by 2034. 

That growth stems, in part, from compelling marketing promises of simplicity and lower premiums. Advantage plans often come with prescription drug coverage baked in, and there’s no need for a separate Medigap policy. The plans also tout “extra benefits” that can include dental, vision, and hearing coverage, as well as gym memberships. 

Advantage has supporters in both political parties, but there are signs that the shift toward privatization could accelerate during the second Trump administration, as Project 2025 calls for making Advantage the default option for new enrollees. 

The nominated leader of CMS, Dr. Oz, could not eliminate traditional Medicare by fiat. But CMS could tip the scales in Advantage’s favor through any number of rule changes. 

For example, CMS could abandon Biden-era rules that crack down on deceptive advertising practices by Advantage plan marketers. The new administration also could back off from ongoing battles between CMS and insurance companies over rules that govern how they are paid for covering Medicare enrollees. These include bonus payments tied to plan quality, risk adjustment, and diagnoses. 

However, there are several reasons to approach Advantage plans with caution: 

• Advantage plans utilize networks of providers that can—and do—shift over time, which can destabilize your care. 

• There remains uncertainty regarding the quality of care received by Advantage enrollees who have serious illnesses. However, serious illness is a common motive for attempting to leave an Advantage plan, according to many Medicare advocates and counseling services. 

• Federal rules don’t require Advantage plans to disclose data about care in the same way that participants in traditional Medicare must do. 

• Relatively high disenrollment rates have been reported among enrollees in poor health and among those living in assisted living facilities or using post-acute services. Disenrollment rates also are high in rural areas, where it can be difficult to access care in plans. 

• Nearly all Advantage plans have prior authorization requirements that can tie up your care in bureaucratic red tape. Outright denial of care is another problem: Federal investigators have found that Advantage have, in some cases, inappropriately denied patient claims. 

Traditional Medicare is still the gold standard of coverage. It allows you to visit nearly any healthcare provider in the US, a feature that has become extremely hard to find in any health insurance plan, including the Advantage network. 

This, coupled with a Medigap supplemental plan, traditional Medicare will provide the best protection against out-of-pocket costs. If you have traditional Medicare and a Medigap plan, you have virtually full protection for Medicare-covered services (with minimal paperwork); if you are in Medicare Advantage, you may carry the risk of additional cost up to your plan’s annual out-of-pocket limit.  Up next?  Will The new administration pursue changes to recent prescription drug reform?