Trump administration weighing plan to auto-enroll new Medicare beneficiaries into private Medicare Advantage plans by default

The Trump administration is reportedly considering a policy that would make private Medicare Advantage (MA) the default enrollment option for new Medicare beneficiaries, replacing the current default of traditional, government-run Medicare. Proposed House legislation would automatically assign new beneficiaries to the lowest-premium MA plan in their ZIP code and lock them in for three years.

The policy relies on documented behavioral patterns: when beneficiaries are automatically placed into plans, most accept the default rather than actively choosing an alternative. In Medicare Part D drug plans, only 16% of low-income beneficiaries opt out when auto-enrolled, meaning roughly 84% of defaulted MA enrollees would remain in their assigned plan.

According to MedPAC (the nonpartisan congressional advisory body), Medicare overpays private MA plans relative to traditional Medicare coverage costs—$76 billion in 2026 alone. MA enrollees currently cost CMS roughly 14% more than comparable traditional Medicare enrollees, a gap that auto-enrollment would likely expand, threatening Medicare's long-term sustainability.

Federal law limits Medigap (supplemental insurance) access to a brief initial enrollment window; after 12 months, insurers can deny coverage or charge prohibitive premiums based on pre-existing conditions. Beneficiaries dissatisfied with MA's narrow networks and prior authorization requirements would face difficult switches out of the plan.