Medicare Advantage programs often tout their additional benefits such as hearing, vision and dental care as enticements to customers. However, many people do not use these benefits.
In fact, three in 10 Medicare Advantage customers don't use it any of their supplemental benefits, according to the 2024 Commonwealth Fund Medicare Value Survey.
the problem? The survey found that a quarter of those who did not use supplemental benefits did not know what their benefits included.
“I generally find that people only have basic knowledge about what their health plan covers,” said Mary Johnson, a Social Security and Medicare policy analyst at the Senior Citizens Research Center. “Perception issues can make understanding insurance coverage more difficult as we age, so I'm surprised the survey didn't find more people who didn't use any of their supplemental benefits.”
There is a disconnect between what subscribers say they want and what they use.
“Additional benefits are cited as an important attraction for people who choose Medicare Advantage plans,” said Meredith Freed, senior policy director for KFF's Medicare Policy Program. “Ninety percent of Medicare Advantage ads mention additional benefits. So, it's interesting that 30% of people don't use them.”
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The Commonwealth Fund found that only four in 10 enrollees reported using dental or vision benefits or an over-the-counter drug allowance.
“It's surprisingly low. People should go to the dentist every year,” said Gretchen Jacobson, lead author of the study and vice president of the Advanced Medicare Program at the Commonwealth Fund.
Medicare Advantage is a private plan that is an alternative to traditional Medicare and provides supplemental benefits that traditional Medicare does not cover, such as dental and vision care. Most plans also provide allowances for over-the-counter medications, hearing care, and fitness benefits, and some provide allowances for grocery or meal delivery services. The open enrollment period, during which beneficiaries can make changes to their Medicare Advantage plans, runs from January 1 through March 31.
These additions come at a trade-off for enrollees because most Medicare Advantage plans limit which network of doctors can be seen and require prior authorization or referrals for some treatment.
Meanwhile, traditional Medicare allows beneficiaries to see any provider without the need for prior authorization or referrals and offers a wider range of Part D plans for prescription drug coverage.
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Of the three in 10 Medicare Advantage enrollees who said they did not use any supplemental benefits in the past year, 63% said they did not need the benefits, 24% said they did not know what benefits their plan offered, and 9% said and found Commonwealth Fund said it was difficult to use benefits, 4% said it cost too much to use benefits, while 6% cited additional reasons.
The survey found that dental care, vision care and over-the-counter drug allowances were the most commonly used benefits.
The survey comes as Medicare Advantage enrollment outpaced traditional Medicare for the first time last year — costing taxpayers more.
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Medicare spends 6% more on Medicare Advantage enrollees than it would if those beneficiaries were enrolled in traditional Medicare, a difference that translates to about $27 billion in additional costs for 2023, according to projections from the Medicare Payments Advisory Commission's report to Congress. .
“As more seniors switch to Medicare Advantage plans and their cost to the federal government increases, it is important to ensure that both programs provide value to Medicare beneficiaries,” Jacobsen said.
So, do the additional benefits justify the additional cost to the Centers for Medicare and Medicaid Services for Medicare Advantage coverage?
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Medicare Advantage plans could use the extra money to provide supplemental benefits, lower the cost of services, and keep some for administrative costs and profits, Freed said.
“Medicare Advantage plans are given more money to provide these benefits. It's important that enrollees take advantage of them,” Freed said.
In November, CMS proposed requiring Medicare Advantage plans to send a personalized notice to enrollees mid-year about unused supplemental benefits available to them to encourage higher utilization. The proposal is expected to be finalized in April, according to the Commonwealth Fund.
“If people choose Medicare Advantage for that reason of additional benefits, it will be a good reminder for people,” Freed said.
Meanwhile, Johnson disagreed.
“I don't think it would make much of a difference to require MA plans to notify people. MA plans are already trying to do that, clogging up snail mail and daily email with a constant stream of stuff that I suspect no one ever reads,” Johnson said.
“I think Medicare beneficiaries would be better served by requiring plans to lower the cap on out-of-pocket expenses rather than burdening plans with things people don't get, or doing something to improve health like automatically offering grocery coupons,” Johnson said.
In other findings, the Commonwealth Fund said that 65% of those with either Medicare Advantage or traditional Medicare said their coverage fully met their expectations — and there was essentially no difference between plan types in that regard.
Larger shares of beneficiaries in Medicare Advantage plans than in traditional Medicare plans reported that they experienced delays in getting care because of the need to obtain prior approval (22% vs. 13%) and were unable to afford care because of copayments or deductibles (12% vs. 7%).
