Medicare Advantage: CMS Considers Automatic Enrollment for Beneficiaries

The future of Medicare enrollment could be undergoing a significant shift, as President Trump’s administration explores automatically enrolling beneficiaries into Medicare Advantage plans. This potential policy, first highlighted in the conservative Project 2025 policy blueprint, aims to reshape how seniors access healthcare, moving away from the traditional fee-for-service model.

Chris Klomp, the current director at the Centers for Medicare & Medicaid Services (CMS), revealed Thursday that the agency is evaluating the feasibility of automatically assigning new Medicare enrollees to either Medicare Advantage or accountable care organizations (ACOs) participating in the Medicare Shared Savings Program. Beneficiaries would retain the option to opt out and choose traditional Medicare if they prefer. Currently, individuals who do not actively select a plan are automatically enrolled in original Medicare.

A Shift in Enrollment Philosophy

Klomp suggested that a default enrollment into a private plan or ACO could foster stronger, more continuous relationships between patients and their healthcare providers. “Would either of those, in my view, be superior to a default enrollment into a fee-for-service arrangement, where there’s not this long-term, secular relationship between the beneficiary, the patient, and their provider? Yes,” he stated. This perspective reflects a broader push towards value-based care, where providers are incentivized to deliver coordinated, high-quality care rather than being paid for each individual service.

Medicare Advantage plans have been gaining popularity in recent years, offering benefits beyond traditional Medicare, such as vision, dental, and hearing coverage. However, concerns have been raised regarding potential limitations in provider networks and prior authorization requirements. The potential for automatic enrollment adds another layer of complexity to this evolving landscape.

Scrutiny of Medicare Advantage Billing Practices

The consideration of this policy change comes amid increased scrutiny of billing practices within the Medicare Advantage program. A recent investigation by the Department of Justice into UnitedHealth Group, the largest Medicare Advantage insurer, focuses on allegations of improper coding of diagnoses to justify higher payments. Medicare Advocacy reports that Senator Chuck Grassley has too demanded detailed information on UnitedHealth’s billing practices, citing concerns about potential fraud, waste, and abuse. These investigations highlight the need for robust oversight to ensure the integrity of the Medicare Advantage program, regardless of enrollment methods.

The Wall Street Journal reported that in 2021 alone, UnitedHealth received an estimated $8.7 billion in extra payments due to questionable diagnoses. This underscores the financial incentives that can drive potentially problematic billing practices and the importance of accurate coding to ensure appropriate reimbursement.

The Role of Dr. Mehmet Oz at CMS

Adding another layer to the current situation is the leadership at CMS. Dr. Mehmet Oz, nominated by President Trump to be the Administrator of the Centers for Medicare & Medicaid Services, brings a unique perspective to the agency. His appointment has raised questions about the potential direction of Medicare policy, particularly given his background as a television personality and his previous statements on healthcare issues. STAT News reported that Oz’s team is also considering restricting how insurers can code illnesses, potentially impacting payments to Medicare Advantage plans.

Financial Implications and Insurer Response

Recent changes to Medicare Advantage rules have already resulted in a significant financial impact for insurers. A November 2025 analysis indicated that these changes would provide a $13 billion windfall to Medicare Advantage plans. STAT News noted that while this amount may seem small relative to the overall HHS budget, it represents a substantial sum for individual plans. The potential for automatic enrollment could further alter the financial landscape of the program, potentially increasing enrollment in Medicare Advantage and shifting costs from traditional Medicare.

What Comes Next: Policy Development and Potential Challenges

The CMS is currently assessing the feasibility of automatic enrollment models, and no final decisions have been made. The agency will likely need to consider a range of factors, including the potential impact on beneficiary choice, the administrative complexities of implementing such a system, and the need to ensure equitable access to care. Further, the agency will need to address concerns about potential gaming of the system by insurers, as highlighted by the ongoing investigations into billing practices.

Any proposed policy change would likely undergo a public comment period, allowing stakeholders – including beneficiaries, healthcare providers, and insurers – to weigh in on the potential implications. The ultimate fate of this proposal will depend on a careful balancing of competing priorities and a thorough assessment of the potential benefits and risks. It’s a process that will require careful consideration of both the financial and the human elements of Medicare.