How did the Trump administration's policies affect Medicare Advantage enrollment and payments?
Executive summary
The Trump administration increased Medicare Advantage (MA) payments and rolled back or paused several Biden-era quality and oversight measures, actions that critics say boost plan revenue and could accelerate MA enrollment; CMS estimated the star-rating changes would cost about $13.2 billion from 2028–2036 and officials increased MA payments by about 5.06% for 2026, a move advocates and Wall Street cheered [1] [2]. Independent watchdogs warn MA already costs Medicare roughly 20–22% more per enrollee than traditional Medicare, a gap cited as $83–$84 billion in 2024–2025 analyses [3] [4].
1. A policies pivot that favors private plans — subsidies and star ratings raised revenues
The administration finalized rule changes that restored bonus payments tied to Medicare Advantage “star” ratings and announced payment increases — including a 5.06% hike for 2026 — moves CMS and industry say stabilize plan finances and expand benefits, while the agency’s own estimate puts the long‑term cost of the star‑rating change at roughly $13.2 billion between 2028 and 2036 [1] [2]. Those decisions translated into immediate market consequences: insurer stocks rose and advocacy groups described the actions as a de facto payment “raise” for MA plans [2].
2. Enrollment growth likely to accelerate, aided by policy signals and proposals
MA already covers a majority of beneficiaries and projections show continued growth: about 54–55% enrolled in MA and CMS projected record increases in recent years; analysts and policy blueprints tied to the administration — including Project 2025 — explicitly favor making MA the default for new beneficiaries, a change that would likely entrench and accelerate enrollment growth if implemented [5] [6] [7]. Public and private voices differ on intent: proponents frame default enrollment as greater choice and competition, while critics call it an effective privatization of Medicare [6] [8].
3. Oversight rollbacks and metric changes shift incentives away from consumer protections
CMS proposals under the administration sought to remove a dozen quality measures from the MA star ratings — including measures related to appeals and plan exit rates — and to alter risk‑adjustment feedback mechanisms, decisions watchdogs say will weaken consumer protections and make it harder to hold plans accountable for denials or poor customer service [9] [2]. Consumer‑advocacy groups characterized the final rules as backing off important protections while simultaneously increasing payments to plans [2].
4. Cost to taxpayers versus industry framing: competing interpretations
Independent analyses from MedPAC and other advisers estimate MA payments exceed what traditional Medicare would have cost by about 20–22%, equating to roughly $83–$84 billion in recent-year comparisons; critics point to those figures to argue that payment increases funnel taxpayer dollars to insurers instead of reducing federal spending [3] [4]. The administration and industry present payment increases as statutory or necessary adjustments to maintain plan offerings and benefits; watchdogs counter that stronger oversight and payment accuracy would better protect Medicare’s finances [2] [3].
5. Risk adjustment, “upcoding,” and the accounting behind higher payments
Policymakers have flagged risk‑adjustment and coding intensity as central drivers of MA payments, with CMS opening discussion of changes while also proposing to ease some quality measures. Observers worry the combination of higher base payments and continued coding incentives could sustain or increase per‑enrollee spending in MA relative to fee‑for‑service Medicare [9] [3]. MedPAC’s estimates — repeatedly cited by analysts and advocates — underpin concerns that MA’s higher payments are not solely due to higher medical need among enrollees [3] [4].
6. Policy levers still available — enrollment defaults, rulemaking, and Congressional oversight
Several sources note that major shifts — like making MA the default for new enrollees — could be implemented administratively in part but would face legal, political and technical hurdles; Project 2025 and other advisories describe executive paths to promote MA, but such steps would attract scrutiny and likely litigation or legislative pushback [7] [8]. Congress, MedPAC and advocacy groups remain active oversight voices, and they are citing the payment and quality changes as priorities for review [3] [4].
7. Bottom line: who benefits, who pays, and what’s unsettled
Available reporting shows insurers benefited financially from the administration’s MA policies — higher payments, restored bonuses and relaxed metrics — while independent estimates say taxpayers and traditional Medicare enrollees bear higher costs through elevated Part B premiums and program overpayments; the long‑term impact on enrollment, benefits and care quality will depend on subsequent rulemaking, enforcement and possible Congressional action [2] [4] [1]. Sources do not provide a definitive causal estimate tying every policy to precise enrollment changes beyond projections and stated agency cost estimates; available sources do not mention a complete longitudinal accounting tying each policy move to exact enrollment shifts [1] [5].