The Future of Medicare: Why Original Medicare Remains Vital as Advantage Plans Grow

As Medicare Advantage (MA) plans continue to gain popularity, enrolling over half of eligible beneficiaries, the importance of a strong Original Medicare (OM) program is often overlooked. A recent report from the AARP Public Policy Institute (PPI) underscores why maintaining a robust Original Medicare is critical for all beneficiaries, regardless of whether they choose traditional Medicare or a Medicare Advantage plan, and for the overall health of the Medicare program itself.

The Growing Popularity of Medicare Advantage

Over the past two decades, enrollment in Medicare Advantage has steadily increased. In 2025, 34 million people – 49% of all Medicare enrollees – were covered by Original Medicare [1]. This shift in enrollment necessitates a careful examination of the role and future of Original Medicare.

Why Original Medicare Matters

Original Medicare, also known as traditional Medicare, provides health coverage to nearly half of all Medicare beneficiaries. It offers several key advantages:

• Freedom of Choice: OM allows beneficiaries to see any doctor or hospital nationwide that accepts Medicare.
• Fewer Barriers to Care: Generally, OM doesn’t require referrals to see specialists or prior authorizations for covered treatments.
• Coverage Stability: Benefits, cost-sharing rules, and provider access remain relatively stable year to year.
• Comprehensive Coverage: Original Medicare covers all providers nationwide, allowing individuals to seek care anywhere in the United States.

Original Medicare’s Role Beyond Direct Enrollment

The benefits of a strong Original Medicare extend beyond those directly enrolled in the program. OM plays a crucial role for individuals enrolled in Medicare Advantage plans as well:

• Hospice Care: Original Medicare provides hospice benefits, even for those enrolled in MA plans. When an MA enrollee elects hospice care, Original Medicare becomes the primary payer.
• A Safety Net for Changing Needs: Beneficiaries may switch from MA back to Original Medicare when facing complex health conditions, such as a new cancer diagnosis, or requiring extensive care like nursing facility or home health services.

Key Functions Reliant on Original Medicare

Original Medicare isn’t just a coverage option. it’s foundational to the entire Medicare system:

• Core Benefit Definition: All benefits covered by Original Medicare must also be covered by Medicare Advantage plans.
• Cost Benchmarking: MA plan costs are benchmarked against the average costs of services under Original Medicare.
• Data and Transparency: Policymakers and researchers rely heavily on Original Medicare data for program administration, improvement, and policy development. MA data is less comprehensive.
• Cost Efficiency: Original Medicare generally costs less per person than Medicare Advantage.

AARP’s Recommendations for Strengthening Original Medicare

To ensure Original Medicare remains a viable and strong option, AARP suggests several key policy changes:

• Payment Alignment: Eliminate differences in Medicare spending between OM and MA. Higher payments to MA plans contribute to their growth and marketing efforts.
• Stable Part D Market: Support a stable market for stand-alone Part D prescription drug plans, ensuring affordable access to prescription drugs for those in Original Medicare.
• Modernized Benefits: Expand Original Medicare benefits to include dental, vision, and hearing care, and improve cost protections, such as adding an out-of-pocket spending limit.
• Improved Medigap Access: Ensure access to affordable Medigap supplemental insurance plans for those who want to switch from MA to OM, and for Medicare enrollees under age 65.
• Unbiased Information: Provide beneficiaries with access to useful, unbiased information and support to navigate Medicare, removing incentives for brokers to steer enrollees towards MA plans.

Looking Ahead

Strengthening Original Medicare is essential for ensuring all beneficiaries have access to high-quality, affordable healthcare. Addressing policy and payment imbalances between OM and MA, and prioritizing beneficiary needs, will be crucial for the future of Medicare [2].