The organization has written to President-elect Barack Obama, saying Medicare should be open to "all Americans."
Consumerwatchdog says forcing consumers to buy insurance policies is good for insurance companies but not for the nation.
The proposal is getting high marks from many consumer groups, but not the California Association of Health Plans.
"The Medicare system announced it could run out of money in eight years, so what would it be like if millions more people were on a system that's bound to run out of money; the way to tackle this is to bring down the cost of health care," spokesperson Chris Ohman said.
Generally insurance companies blame providers for high costs, providers -- the nurses and doctors -- blame the insurance companies, and consumers are left in the middle.