Open enrollment for Medicare beneficiaries starts on Oct. 15th. With Medicare Advantage premiums projected to drop by 16% in 2027 , this could further boost the percentage of seniors and disabled folks who choose the privately run alternative to traditional Medicare. But critics of the program suggest it’s overly restrictive in terms of coverage. They also cite problematic overpayments by the federal government to Medicare Advantage plans, which wind up burdening taxpayers.

Trump Administration Pushing Medicare Advantage

KFF reports that 55% of Medicare beneficiaries are currently enrolled in Medicare Advantage. This percentage has increased steadily over the past 20 years. This week, Administrator of the Centers for Medicare and Medicaid Services, Mehmet Oz, touted the projected 16% premium decline for 2027.

The Trump administration’s preference appears to be to grow the Medicare Advantage market at the expense of traditional Medicare. This is stipulated in Project 2025, a conservative blueprint on government policy. And, prior to his assuming his role at CMS, Oz declared he favored a “Medicare Advantage for All” healthcare system. This would extend beyond the confines of Medicare, suggestive of Medicare Advantage being a possible model for broader healthcare reform.

Notably, the administration finalized a 2027 payment rate increase of 2.5% to Medicare Advantage plans that was far larger than the 0.1% rate initially proposed in January. And last year, the administration also decided upon a generous payment increase to Medicare Advantage plans of 5.1% for 2026. This differed substantially from the 2.2% increase proposed by the Biden administration in the waning days of its tenure. The payment increases may (partially) offset the financial headwinds facing the Medicare Advantage program, including rising medical costs and increased utilization of healthcare services and technologies by beneficiaries. Insurers also must deal with challenges caused by the Inflation Reduction Act’s redesign of the outpatient drug benefit called Part D. The restructuring exposes plans to much greater cost liability, especially for high-cost beneficiaries.

Currently the default for enrollment is traditional Medicare. But the Trump administration is actively exploring the possibility of auto-enrollment in Medicare Advantage by seniors.

Additionally, CMS is loosening regulations on the so-called star ratings system. CMS eliminated 11 of the quality and care metrics Medicare Advantage plans are graded on, which include, among others, call center performance, appeals and complaints. The evaluations are designed to measure the quality and performance of health plans based on patient satisfaction and the use of clinically appropriate tests and treatments. By lowering the number of metrics plans are held accountable for, this may generate close to $19 billion for insurers in bonuses over the next 10 years.

Critiquing Medicare Advantage

Former health insurance executive turned whistleblower, Wendell Potter, is a staunch critic of Medicare Advantage. As president of the Center for Health and Democracy , he has cited multiple practices that potentially harm Medicare beneficiary health as well as impose disproportionate burdens on taxpayers relative to traditional Medicare. Medicare Advantage’s coverage restrictions encompass much more extensive use of prior authorization protocols and narrower networks of physicians and hospitals than traditional Medicare.

Whether patients fare better in traditional Medicare or Medicare Advantage depends to a large degree on their health status and need for specialized care. Patients with complex or serious conditions who are enrolled in traditional Medicare face fewer barriers to seeing top specialists.

And in stark contrast to traditional Medicare, involuntary disenrollments are a growing threat to Medicare Advantage plan recipients. A Johns Hopkins Bloomberg School of Public Health analysis found that approximately 10% of Medicare Advantage enrollees — roughly 2.9 million seniors — were forced to find new coverage for 2026 as insurers exited markets. The average disenrollment rate for Medicare Advantage beneficiaries jumped from 1% in 2018-2024 to 7% in 2025, and then to 10% (nearly 3 million people) in 2026. In Vermont, 92% of enrollees had to find alternative plans or revert to original Medicare.

Medicare Advantage insurers have also been accused of and found liable for overcharging the federal government and upcoding. This illegal medical billing practice occurs if an insurer submits codes for a more severe diagnosis or more expensive treatment than what was actually provided in order to receive greater reimbursement. CMS says it’s committed to more oversight and wants to expand audits to crack down on overpayments. But thus far the penalties incurred have been relatively minor .

Potter has characterized Medicare Advantage as a corporate “heist” that extracts billions in taxpayer funds while restricting patient care .

Medicare Advantage Basics

Beneficiaries in traditional Medicare get medical benefits such as hospital and physician services. They can also sign up for prescription drug coverage (Part D) through stand-alone plans that manage the pharmacy benefit.

Alternatively, those eligible for Medicare can enroll in Medicare Advantage, also known as Part C. Here, private insurers receive a set monthly fee per enrollee from the government to cover health services, including hospital, outpatient and physician services as well as in most plans, prescription drug coverage, all integrated under one insurer. Medicare beneficiaries are often attracted by low premiums and supplemental benefits such as vision and dental care not offered by traditional Medicare. The Medicare Advantage program generally lowers out-of-pocket costs so long as beneficiaries stay within the designated network.