AARP Examines Ways to Strengthen Original Medicare 

OM covers all providers nationwide who take Medicare, allows individuals to see health care professionals anywhere in the United States, and generally does not require referrals to see a specialist or prior authorizations before obtaining coverage for prescribed treatments or other services.
OM offers stability of coverage and supports lasting relationships with health care providers. Original Medicare’s benefits, cost sharing rules, and access to providers apply nationwide and do not generally change significantly from year to year. As a result, OM enrollees do not have to face the stress, confusion, and financial risks associated with potential annual changes in benefits, cost sharing, and provider networks for medical care.

OM offers the ability to enroll only in Medicare Part A. This is particularly important for individuals who continue to work beyond age 65 and wish to delay enrolling in Part B until their employer-sponsored coverage ends—a group that has grown steadily over the past several decades.
OM can mean fewer cost-related barriers. Evidence indicates that a lower proportion of people with OM face cost-related barriers to receiving health care—15% compared with 19% of people with MA.
OM provides hospice benefits, including for people with MA. After an MA enrollee elects the hospice benefit, traditional Medicare becomes the primary payer for most Medicare-covered health care services. It pays for MA enrollees’ hospice and other care. In 2023, 52% of people enrolled in an MA plan who died that year used the hospice benefit (this proportion was similar for people with OM).
For people with MA, OM is an important option in case their circumstances, preferences, or health care needs change. Research has found that people are more likely to disenroll from MA and switch to OM when they are newly diagnosed with cancer, in the last year of life, living with complex conditions, and receiving nursing facility or home health care services.

OM determines Medicare’s core benefits—all Part A and Part B benefits covered by OM must also be covered by MA plans.
It also impacts MA enrollee costs. MA enrollees expected costs for Part A and Part B services must be less than or equivalent to the average costs for those services under OM. For some benefits (including hospital inpatient and skilled nursing facility care, dialysis, and durable medical equipment), MA plans cannot charge more than OM does. And MA’s cap on enrollee spending is based on average out-of-pocket spending by people with OM.
OM data plays a critical role in administering Medicare and informing future policy. For program operation and improvement purposes, policymakers and researchers rely heavily on data generated by OM. MA data is less available and robust; there are significant gaps in information and transparency.
OM promotes cost efficiencies. It is a testing ground for innovative models of health care delivery and payment, and it helps constrain Medicare’s spending growth because it costs less per person than MA.

Eliminating differences in Medicare spending for people in OM and MA. Higher payments for MA enrollees relative to comparable OM enrollees have been a significant driver of both Medicare spending and MA marketing and enrollment in recent years. Aligning MA and OM payments would help level the playing field between the two coverage options.

Ensure a stable market for stand-alone Part D prescription drug plans. AARP explains that largely due to payment differences, the number of stand-alone Part D plans has declined steeply while the number of MA plans that include Part D has grown significantly. To address this imbalance, policymakers must “recognize that stand-alone Part D plans are a distinct market and ensure traditional Medicare enrollees have affordable access to prescription drug coverage.”

Ensure all Medicare enrollees have access to equivalent benefits and cost. To further improve the OM-MA balance, AARP recommends modernizing OM benefits—for example, by expanding coverage to include dental, vision, and hearing care—and cost protections, including by “ensuring that those who qualify for financial help paying for Medicare premiums and other expenses receive that help, expanding eligibility for financial assistance to more people with low incomes, adding an out-of-pocket spending limit in traditional Medicare, and continuing efforts to negotiate lower Medicare prescription drug prices.”

Improve Medigap Access. Ensuring that people who want to switch from MA to OM, as well as Medicare enrollees under age 65, have access to affordable Medigap supplemental insurance plans would lower barriers to coverage and care.

Ensure individuals have access to useful, unbiased information and adequate support navigating Medicare. Policies that support unbiased information could help empower enrollees and strengthen the program. Approaches could include removing distortions in brokers’ incentives that encourage them to enroll people in MA, establishing stronger guardrails around MA marketing, improving beneficiary-facing enrollment tools and communications, and adequately funding the State Health Insurance Assistance Program (SHIP), which offers unbiased and personalized counseling, helping enrollees and their families navigate Medicare.