What does Biden want to do to Medicare Advantage?

Editorial team Published on

The Biden administration has focused on tightening oversight, curbing misleading marketing, and adjusting payment rates for Medicare Advantage (MA) plans.

📊 Payment Adjustments and Oversight

  • Rate Changes: Finalized benchmark payment adjustments that resulted in a slight baseline decrease (around 0.2% for 2025) while aiming to curb excess taxpayer-funded payments.
  • Prior Authorization: Addressed barriers by targeting inappropriate denials and requiring health equity analyses on utilization management.

🛡️ Consumer Protections & Marketing

  • Predatory Marketing: Implemented stricter guardrails and standardized broker/agent compensation to prevent aggressive or deceptive plan steering.
  • Transparency: Proposed and enacted rules requiring better data reporting, complete provider directories on the Medicare Plan Finder, and mid-year notifications for unused supplemental benefits.

🩺 Access and Benefits

  • Behavioral Health: Expanded network adequacy requirements to include more mental health and addiction professionals.
  • Drug Coverage: Advanced proposals to ease access to lower-cost biosimilars and incorporate broader chronic care management.

🔎 Further Exploration

Why are they pushing Medicare Advantage?

Medicare Advantage plans are heavily promoted because they generate massive profits for private insurance companies and receive higher government payments per enrollee compared to traditional Medicare, as detailed by the KFF Guide on Medicare Advantage Enrollment.

Key Reasons for the Push

  • High Government Payments: Medicare pays private insurers a fixed rate per person that often exceeds the average cost of caring for a beneficiary in traditional Medicare.
  • Insurer Profits and Growth: More members mean higher overall revenue and financial incentives for private companies to manage and restrict care spending.
  • Attractive Marketing: Plans frequently advertise zero-dollar monthly premiums and extra perks like dental, vision, hearing, and gym memberships.
  • Employer Strategies: Many large employers shift their retiring workers into these private plans to lower their own retiree health care costs.
  • Government Budgeting: Fixed monthly payments make it easier for federal planners to budget compared to the unpredictable costs of traditional Medicare.

What will happen to Medicare Advantage plans?

Major insurers are cutting and restructuring Medicare Advantage plans for 2027, reducing footprints, raising out-of-pocket costs, and scaling back extra benefits due to rising medical spending and lower-than-expected government reimbursement.

Key Changes for 2027

  • Canceled Plans and Reduced Footprints: Major carriers like UnitedHealth and Humana are dropping hundreds of thousands of enrollees and exiting specific counties. Nationally, overall enrollment is projected to drop.
  • Higher Out-of-Pocket Costs: Insurers are raising deductibles, copays (such as higher hospital stay costs), and maximum out-of-pocket limits.
  • Reduced Benefits: Supplemental perks like dental coverage and broad doctor-and-hospital networks are being trimmed.

Important Dates and Next Steps

  • September 30: Deadline for insurers to send Annual Notices of Change (ANOC) for plans continuing into next year.
  • Early October: Non-renewal or termination notices arrive if your specific plan is ending.
  • October 15 – December 7: Medicare Annual Enrollment Period, where you can select a new Medicare Advantage plan, switch to a different provider, or return to Original Medicare.
  • January 1 – March 31: A special open enrollment period applies if your plan was terminated, letting you make a one-time coverage change.

What did Trump do to Medicare Advantage plans?

The Trump administration has significantly increased payment rates and scaled back regulations for privately run Medicare Advantage plans.

Payment Increases and Rates

  • 2026 and 2027 Boosts: The Centers for Medicare & Medicaid Services (CMS) finalized a 5.1% benchmark payment increase for Medicare Advantage plans for 2026, and a 2.48% increase for 2027, providing billions in additional funding to private insurers.
  • Star Ratings Changes: CMS slashed the number of quality and care measures used for grading plans, a change expected to funnel billions in extra bonus payments to health insurers.

Deregulation and Policy Changes

  • Rolling Back Oversight: The administration reversed Biden-era restrictions regarding supplemental benefits reporting, marketing rules, broker oversight, and utilization management policies.
  • Default Enrollment Considerations: The administration has explored regulatory shifts to make Medicare Advantage a default auto-assignment option for beneficiaries coming into Medicare.
  • Part D Changes: The administration announced the early end of the Part D Premium Stabilization Demonstration, which could raise standalone prescription drug plan premiums and push more enrollees toward Medicare Advantage.

For deeper analysis on these regulatory directions, review the Manatt Insights on Medicare Advantage and the detailed breakdown from Healthcare Dive.

What is the new Medicare Advantage rule?

The new rule is the Contract Year 2027 Medicare Advantage and Part D Final Rule released by the Centers for Medicare & Medicaid Services (CMS), which takes effect in mid-2026 and applies to coverage starting January 1, 2027.

Key Marketing Changes

  • Relaxed Restrictions: CMS rolled back several marketing guardrails, allowing terms like "best" or "top-rated" in ads if supported by the insurance company.
  • No Cooling-Off Period: Eliminated the mandatory 48-hour cool-off period between an initial beneficiary contact and discussing a plan.
  • Event Transition: Agents can now move directly from an educational event to a sales event in the same room without a 12-hour gap.
  • Disclaimer Timing: Relaxed the requirement to read specific enrollment disclaimers within the first 60 seconds of a phone call.

Benefits and Star Ratings

  • SSBCI Transparency: Requires plans to publicly post clear eligibility criteria for Special Supplemental Benefits for the Chronically Ill (SSBCI), such as food, produce, and pest control.
  • Debit Card Guardrails: Enforces real-time point-of-sale electronic linking for supplemental benefit debit cards to prevent purchases of non-covered items.
  • Star Ratings Update: Removes 11 administrative process measures from the Star Ratings quality measurements.
  • Inflation Reduction Act (IRA): Codifies Part D changes for 2027, including eliminating the coverage gap and adjusting the out-of-pocket threshold.

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9 related questions found

Why do people say not to get a Medicare Advantage plan?

People warn against Medicare Advantage plans because private insurance companies restrict your choice of doctors, require advance approval for medical care, and can cause unexpected out-of-pocket expenses.

Here are the main reasons people advise against them:

Restricted Doctor Networks

  • Local limits: You must use doctors and hospitals inside the plan's network.
  • No nationwide access: Unlike Original Medicare, you cannot see any doctor in the country who accepts Medicare.
  • Travel problems: Routine care is usually not covered if you travel outside your home state or local area.
  • Unexpected drops: Insurers can drop doctors from their network mid-year or change rules annually. For real-world examples of these restrictions, read 5 Reasons People Regret Medicare Advantage Plans.

Prior Authorization Delays

  • Permission needed: You often need "prior authorization" (official permission) from the insurance company before getting an MRI, surgery, or specialized equipment.
  • Delayed care: This approval process can delay or block medically necessary treatments.

High Costs for Serious Illness

  • Low premiums hide costs: Many plans advertise a $0 monthly premium, but charge high copays and coinsurance when you actually get sick.
  • No supplement option: You cannot buy a Medigap (Medicare Supplement) policy to cover your out-of-pocket costs while on a Medicare Advantage plan.
  • Heavy bills for major care: Treatments like chemotherapy or extended hospital stays can result in large bills that push you to your yearly out-of-pocket maximum. Medical experts sometimes call these policies "Medicare Replacement Plans" because they can fail to cover you when you need care the most.

Who actually pays for Medicare Advantage plans?

The federal government pays for the vast majority of Medicare Advantage plans through a fixed monthly fee per enrollee, funded by taxpayer dollars and Medicare trust funds.

How the Funding Works

  • Federal Payments (The Capitated Rate): The Centers for Medicare & Medicaid Services (CMS) pays private insurance companies a set monthly amount for every person enrolled, regardless of how much care that individual uses.
  • Risk Adjustment: The government increases or decreases this monthly payment based on the health status and specific medical diagnoses of each enrollee.
  • County Benchmarks: The maximum amount Medicare pays is capped by a county-specific benchmark determined by average spending levels in traditional Medicare.

What Enrollees Pay

  • Part B Premiums: Even if a Medicare Advantage plan advertises a "$0 premium," enrollees must still continue paying their standard monthly Medicare Part B premium to the government.
  • Plan Premiums: Some private Medicare Advantage plans charge an additional monthly premium on top of Part B.
  • Out-of-Pocket Costs: Enrollees pay copayments, coinsurance, and deductibles when they use medical services, up to the plan’s annual out-of-pocket maximum.

Will Medicare Advantage be discontinued in 2026?

No, Medicare Advantage is not being discontinued by the federal government, but some specific private insurance plans are being canceled or scaled back by individual carriers in certain regions.

Why Some Plans Are Changing

  • Private Offerings: Medicare Advantage (Part C) is run by private insurance companies, not the government directly.
  • Carrier Cuts: Major insurers like Humana and UnitedHealthcare are pulling out of select counties or dropping specific lower-rated plans due to rising healthcare costs and lower government reimbursement rates.
  • Network Reductions: Several large hospital systems have also dropped certain Medicare Advantage plans from their networks over billing and authorization disputes.

What You Should Do If Your Plan Changes

  • Check Notices: Insurance companies must mail an Annual Notice of Change (ANOC) or a non-renewal notice if your specific plan is ending or changing.
  • Review Options: During the open enrollment period, you can switch to another Medicare Advantage plan or return to Original Medicare.
  • Official Resources: Visit Medicare.gov or call 1-800-MEDICARE to compare active plans in your local area.

Is it better to get regular Medicare or Medicare Advantage?

Neither option is universally better; Original Medicare offers more freedom of choice, while Medicare Advantage typically provides lower upfront costs and extra bundled benefits. The right choice depends on your budget, health needs, and preference for doctor networks.

Original Medicare

  • Doctor Choice: See any doctor or hospital in the U.S. that accepts Medicare; no referrals or prior authorizations are needed for most care.
  • Costs: Includes a 20% Part B coinsurance with no annual out-of-pocket maximum. To cap costs, you must buy a separate Medigap (supplement) policy and a separate Part D prescription drug plan.
  • Extras: Does not cover routine dental, vision, hearing, or gym memberships.

Medicare Advantage (Part C)

  • All-in-One Bundles: Offered by private insurers, combining Part A, Part B, usually Part D (prescription drugs), and extra benefits like dental, vision, hearing, and fitness programs.
  • Costs: Often has lower monthly premiums (sometimes $0) and features an annual out-of-pocket spending cap (capped at $9,250 in 2026). You still must pay your standard Part B premium.
  • Restrictions: Restricts care to local provider networks (like HMOs or PPOs) and often requires referrals or prior authorization for specialized procedures.

Which Should You Choose?

  • Choose Original Medicare if: You travel frequently within the U.S., want to see any specialist without a referral, and can afford the extra cost of a Medigap supplement and Part D drug plan.
  • Choose Medicare Advantage if: You prefer lower monthly costs, want prescription drugs and routine dental/vision bundled together, and don't mind using a specific local network of doctors. You can explore official plan details and options directly on the Medicare Plan Finder.

Can I switch back onto regular Medicare and cancel Medicare Advantage?

Yes, you can cancel your Medicare Advantage plan and switch back to Original Medicare, but you can usually only make this change during specific enrollment windows.

When You Can Switch

  • Medicare Open Enrollment Period (October 15 – December 7): Changes made during this time take effect on January 1 of the following year.
  • Medicare Advantage Open Enrollment Period (January 1 – March 31): If you already have Medicare Advantage, you can switch to Original Medicare during this window, and your coverage starts the first of the month after your request is received.
  • Special Enrollment Periods: You may qualify to switch at other times if you experience specific life events, such as moving out of your plan's service area or your plan terminating its contract. You can review details on Special Enrollment Periods to see if you qualify.

How to Cancel and Switch

  • Enroll in a new plan: You can call 1-800-MEDICARE (1-800-633-4227) for live assistance to disenroll from your Advantage plan and return to Original Medicare. Alternatively, enrolling in a standalone Medicare Part D prescription drug plan will automatically disenroll you from your Medicare Advantage plan.
  • Contact your plan: You can also call your current Medicare Advantage provider directly to request cancellation before setting up your Original Medicare and Part D coverage.

Important Considerations

  • Prescription Coverage: Original Medicare does not include prescription drug coverage, so you will likely want to sign up for a separate Part D plan.
  • Medigap (Supplement Insurance): Original Medicare leaves you responsible for about 20% of medical costs. While you may want a Medigap policy to cover these costs, keep in mind that outside of a trial period or specific guaranteed-issue rights, most states allow insurance companies to use medical underwriting, meaning they can deny coverage or charge higher rates based on your health.