Medicare Overhaul Mandates 3-Year Lock-In and Auto-Enrollment in Lowest-Cost MA Plans Starting 2028

This legislation proposes a massive structural shift for Medicare Advantage (MA) plans, with most of the changes kicking off in 2028. At its core, the bill aims to control costs and change how MA plans interact with both providers and beneficiaries. It introduces mandatory fixed payments for providers, alters how the government calculates payments to the plans, and, most significantly for everyday folks, completely changes how people enroll and switch plans.

The End of Fee-for-Service in MA

Starting in 2028, MA plans generally must switch to a capitated payment system for doctors and hospitals. Think of capitation as a flat monthly fee paid to the provider for each patient, regardless of how many services that patient uses. This is a huge departure from the current fee-for-service model where providers bill for every test, visit, and procedure. The goal here is to push plans and providers toward value-based care and away from over-treatment. For providers who prefer the old system, this means a major workflow change and potentially higher financial risk, but for beneficiaries, it could mean a stronger focus on preventive care to keep costs down.

Playing Fair with Payment Data

The way the government pays MA plans is also getting a big shake-up, specifically regarding risk adjustment. Currently, plans often get higher payments if they can show they have sicker members. The bill tightens the rules for how plans can document those illnesses, stating that starting in 2028, plans can only use diagnoses confirmed during a face-to-face or telehealth visit. This means diagnoses found only during chart reviews or standalone health risk assessments—which some critics say inflate risk scores—will no longer count. For someone with multiple complex conditions, this means it’s more important than ever that their primary care provider accurately documents every diagnosis during their annual physical or check-in, as the plan’s funding depends on it.

The Enrollment Revolution: Auto-Pilot and the 3-Year Lock

This is the provision that hits the hardest and affects nearly every Medicare-eligible person. In 2028, the Secretary must automatically enroll every eligible person into the MA plan with the absolute lowest premium available in their area. If you’re turning 65 or becoming eligible for Medicare, you’ll be enrolled in a plan unless you actively opt out. While the idea of automatically getting the lowest premium sounds great for the budget, it removes the crucial step of evaluating networks, drug coverage, and quality ratings before enrollment.

Even more restrictive is the new three-year lock-in period. Once you are in an MA plan—whether you chose it or were automatically assigned—you are generally stuck there for three years. You cannot switch to another MA plan or go back to traditional Original Medicare unless you meet a specific “hardship event” exception. For busy working people who might move, change jobs, or simply realize their assigned plan’s network doesn’t cover their specialists, this three-year commitment significantly limits flexibility and choice. It’s the difference between being able to change your phone plan every year and being stuck with the same carrier for the life of the phone, regardless of service quality.

Quality Incentives and Safety Nets

Finally, the bill removes a key financial incentive for plans: starting in 2028, MA plans will no longer receive the usual quality benchmark increases they might otherwise qualify for. This eliminates a major financial reward for plans that score highly on quality measures, potentially reducing the motivation to invest in quality improvements. On the flip side, the bill grants the Secretary authority to create a stop-loss payment system to protect MA plans from catastrophic financial losses if their members turn out to be much sicker than expected. This acts as a financial safety net for the insurance companies, but the bill requires the Secretary to ensure this safety net doesn't increase overall Medicare spending.