Trump's victory could hasten privatization of Medicare.

Medicare could undergo changes under Donald Trump, including an increased emphasis on Medicare Advantage plans. Jenny Kane/AP
Former President Donald Trump could transform Medicare, the nearly 60-year-old federal program. More than half of Medicare recipients already enroll in plans managed by commercial insurers known as Medicare Advantage plans; with Trump as president expected to expand that proportion through campaign promises and past policies; it may grow dramatically due to several reasons; such as when congressional Republicans took steps aggressively promote it or Project 2025 by Heritage Foundation called for making insurer-run plans the default enrollment option of Medicare.
Such an adjustment would effectively privatize the program as people tend to remain with plans they initially signed up for, according to health analysts. Trump has attempted to distance himself from Project 2025 despite many people associated with his administration writing the document that guides it.
Conservatives believe Medicare beneficiaries would fare better under Advantage plans, which provide greater benefits than the government-run traditional program. Critics contend that increasing insurer control of Medicare would lock consumers into plans that are costly for taxpayers while restricting care – for instance by mandating prior authorization requirements before certain procedures could take place. “Traditional Medicare will wither away over time,” predicted Robert Berenson in an October interview, who served in both Jimmy Carter’s and Bill Clinton’s administrations and is now an Urban Institute senior fellow, an influential leftist research group. Medicare covers approximately 66 million individuals and is funded largely through payroll taxes. At age 65, most Americans become automatically enrolled into Part A and B Medicare coverage to provide hospitalization and doctor visit coverage respectively. Consumers must sign up separately for other aspects of Medicare, specifically drug coverage (Part D) and supplementary plans offered by insurers that cover costs not covered by traditional Medicare such as extended stays in skilled nursing facilities and cost sharing arrangements.
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Medicare recipients typically pay premiums plus up to 20% of their healthcare costs in coinsurance payments, although Medicare Advantage plans often combine hospital and outpatient coverage along with prescription drug coverage to eliminate that requirement and cap annual out-of-pocket expenses for customers. Plans often do not charge additional monthly premiums or have annual deductibles that must be met before coverage kicks in, and sometimes provide additional features like eye exams, glasses or gym membership coverage. However, Medicare Advantage plans manage costs by restricting patient access to approved networks of doctors and hospitals with whom the plans have negotiated payment rates; some providers refuse to participate with certain or all Medicare Advantage plans and thus limit or narrow networks. Traditional Medicare is accepted by almost every hospital and doctor; its popularity was among the reasons both Trump and Harris pledged to enhance it during their campaigns. Trump’s campaign stated he would prioritize home care benefits and offer unpaid family caregivers tax credits and simplified regulations to support them. Trump’s presidential campaign also noted a variety of improvements made to Medicare Advantage plans during his first term as president, such as increasing access to telehealth and expanding benefits for senior with chronic conditions. While less attention has been devoted to giving private insurers even greater control of Medicare, Joe Albanese of Paragon Health Institute — an establishment-friendly research group — said last October “a Trump administration and Republican Congress would likely support” such ideas. Concept of privatizing Medicare is nothing new: former House Speaker Newt Gingrich, a Republican, predicted in 1995 that traditional Medicare would diminish as beneficiaries could select between original Medicare plans and private plans like Medicare Advantage plans. That shift was furthered by legislation passed in 2003 which created Medicare’s drug benefit and gave private health plans greater involvement with this healthcare program.
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Lawmakers expected private insurers could help contain costs better; unfortunately, Medicare Advantage plans cost the government and taxpayers roughly 6% — or $27 billion — more in 2023 than original Medicare despite evidence showing better care delivery. Medicare Advantage plans were promoted via emails sent during each open enrollment period under President Trump, yet their popularity has become bipartisan over time. “Project 2025 has brought needed competition into a government-run program and proven more popular among those who switch,” noted Roger Severino in an interview prior to the election, as the lead architect for Project 2025’s section on Health and Human Services at Project 2025. He served as HHS’ civil rights office director during President Donald Trump’s term; however, enrollees who wish to switch back may be unable to do so. If individuals try to purchase additional coverage to cover the 20% of costs that Medicare doesn’t cover, they may find they must pay an unaffordable premium. At age 65, when Medicare eligibility becomes automatic for most, insurers selling Medicare supplement plans could deny coverage or charge higher premiums due to preexisting conditions that would prevent enrollment in these plans. “More congressional members are hearing from constituents who are shocked and realized they’ve become trapped by health plans,” noted Andrea Ducas in October from her position as Vice President for Health Policy with Center for American Progress – a liberal public policy organization. KFF Health News serves as one of KFF’s core operating programs by producing in-depth journalism about healthcare topics.