Medicare Savings-Medicare Enrollment

Third Way asked Avalere Health to estimate the federal and beneficiary cost and savings associated with proposed Medicare’s default choice to highest-value plan policy. Under this proposal, new Medicare enrollees who do not actively choose to enroll either in a Medicare Advantage (MA) plan or fee-for-service (FFS) would be automatically enrolled in the highest-value plan in their region. These new enrollees who are assigned to default choice plan would then have the option to change to their enrollment to another plan, either in a MA plan or to traditional FFS.

Avalere estimates this proposal would reduce the federal deficit by $69.5 billion over the FY 2015 – FY 2024 budget window. We estimate $80.5 billion in lower federal spending as new enrollees are automatically enrolled in high value MA plans rather than traditional FFS plans. We estimate $11.0 billion in higher federal spending due to market shifts as MA plans respond to the new risk profile of enrollees.

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