Why Do Medicare Beneficiaries Prefer Traditional Medicare Over Medicare Advantage Plans

Medicare reported 22.8 million consumers have signed up for 2026 individual market health insurance coverage through the marketplace since the start of the 2026 Marketplace Open Enrollment Period on November 1, 2025. 

Medicare Advantage plans have grown in popularity, with over half of eligible beneficiaries enrolled in these private plans by 2024. Despite this growth and the availability of Medicare Advantage options, many beneficiaries still choose traditional Medicare. This preference raises important questions about the differences between these two types of coverage and the factors influencing beneficiaries’ decisions.

Recent data shows that Medicare spending is higher among people who switch from Medicare Advantage back to traditional Medicare. This spending increase is mainly due to costs related to skilled nursing facilities, outpatient hospital care, and inpatient hospital stays. Understanding why beneficiaries make this switch and why many initially avoid Medicare Advantage plans requires a closer look at the principles, pricing, and coverage differences between traditional Medicare and Medicare Advantage.

Medicare enrollment office with informational brochures

Differences Between Traditional Medicare and Medicare Advantage

Traditional Medicare consists of Part A (hospital insurance) and Part B (medical insurance), which are managed by the federal government. Beneficiaries can add Medigap supplemental insurance to cover costs not paid by Medicare, such as copayments and deductibles. This system offers broad access to providers nationwide without network restrictions.

Medicare Advantage plans, also known as Part C, are offered by private insurers approved by Medicare. These plans often include additional benefits like vision, dental, and prescription drug coverage (Part D). However, they usually require beneficiaries to use specific provider networks and may have more complex rules for accessing care.

Why Some Beneficiaries Choose Traditional Medicare

1. Greater Flexibility in Choosing Providers

Traditional Medicare allows beneficiaries to see any doctor or specialist who accepts Medicare. This flexibility is especially important for people with chronic conditions or those who require specialized care. Medicare Advantage plans often limit choices to network providers, which can be a barrier for some beneficiaries.

2. Concerns About Access to Needed Care

Research indicates that beneficiaries who switch from Medicare Advantage to traditional Medicare often do so because they feel they cannot get the care they need under Medicare Advantage. Restrictions on referrals, prior authorizations, and network limitations can delay or limit access to certain services.

3. Medigap Coverage and Pre-existing Conditions

Medigap plans help cover out-of-pocket costs not paid by traditional Medicare. However, beneficiaries with pre-existing conditions may face barriers when trying to purchase Medigap if they are enrolled in Medicare Advantage. This limitation can discourage some from choosing Medicare Advantage initially or prompt them to switch back to traditional Medicare when their health needs increase.

4. Higher Spending on Skilled Nursing and Hospital Care

A 2022 analysis by the Kaiser Family Foundation found that beneficiaries who switched from Medicare Advantage to traditional Medicare had higher Medicare spending, mainly due to skilled nursing facility care (34%), outpatient hospital care (23%), and inpatient hospital care (20%). This suggests that some beneficiaries may require more intensive services that Medicare Advantage plans do not cover as fully or easily.

Cost Considerations and Premiums

Medicare Advantage plans often have low or zero premiums, with an average premium of about $13 per month in 2025 for MA-PD (Medicare Advantage Prescription Drug) plans. This low cost can be attractive, but beneficiaries must consider other out-of-pocket expenses, such as copayments, coinsurance, and costs for out-of-network care.

Traditional Medicare requires beneficiaries to pay Part B premiums, deductibles, and coinsurance, but Medigap policies can help manage these costs. For some, the predictability and transparency of traditional Medicare expenses outweigh the lower premiums of Medicare Advantage.

Who Chooses Medicare Advantage and Who Chooses Traditional Medicare?

Studies show that people who use more healthcare services tend to prefer traditional Medicare. This group includes those with multiple chronic conditions or complex medical needs. They value the freedom to see any provider and the ability to purchase supplemental coverage.

Conversely, healthier beneficiaries or those who want additional benefits like dental and vision coverage may find Medicare Advantage plans appealing. The extra benefits and lower premiums can be a good fit for those with fewer medical needs.

What This Means for Medicare Beneficiaries

Choosing between traditional Medicare and Medicare Advantage depends on individual health needs, financial situations, and preferences for provider access. Beneficiaries should carefully evaluate:

• Their current and anticipated healthcare needs

• The importance of provider choice and network restrictions

• The availability and cost of supplemental insurance like Medigap

• Out-of-pocket costs beyond premiums

• Additional benefits offered by Medicare Advantage plans

  
  

Final Thoughts

The decision to choose traditional Medicare over Medicare Advantage often comes down to the desire for flexibility, access to care, and predictable costs. While Medicare Advantage plans offer attractive premiums and extra benefits, they may not meet the needs of beneficiaries who require frequent or specialized care.

Beneficiaries should review their options annually during the open enrollment period and consider consulting with a Medicare counselor or trusted advisor. Understanding the trade-offs between these plans can help ensure that beneficiaries select coverage that best supports their health and financial well-being.