30% of Medicare Advantage subscribers aren’t using their extra benefits

The problem? One-quarter of those who hadn’t used supplemental benefits didn’t know what their benefits included, the survey found.

“I find in general people only have the most basic knowledge about what their health plan covers,” said Mary Johnson, Social Security and Medicare policy analyst with the Senior Citizens League think tank. “Cognition issues can make understanding insurance coverage even more difficult as we age, thus I’m surprised that the survey didn’t find even more weren’t using any of their supplemental benefits.”

There’s a disconnect between what subscribers say they want and what they’re using.

“Extra benefits are cited as an important draw for people selecting Medicare Advantage plans,” said Meredith Freed, senior policy manager for the program on Medicare policy at KFF. “Ninety percent of Medicare Advantage ads mention the extra benefits. So, it’s interesting that 30% of people aren’t using them.”

Read: What is Medicare Advantage and what does it cover?

Only four in 10 subscribers reported using their dental or vision benefits or an allowance for over-the-counter medications, the Commonwealth Fund found.

“It’s surprisingly low. People should be going to the dentist every year,” said Gretchen Jacobson, lead study author and vice president of the advancing Medicare program at the Commonwealth Fund.

Medicare Advantage is the private plan 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 groceries or meal-delivery services. The open enrollment period, when beneficiaries can make changes to their Medicare Advantage plans, runs from Jan. 1 through March 31.

These extras come at a tradeoff for subscribers because most Medicare Advantage plans dictate what 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 to obtain prior authorization or referrals and offers a larger selection of Part D plans for prescription drug coverage.

Read: The pros and cons of Medicare vs. Medicare Advantage

Of the three in 10 Medicare Advantage subscribers who said they did not use any supplemental benefits in the past year, 63% said they hadn’t needed the benefits, 24% said they did not know what benefits their plan offered, 9% said the benefits were hard to use, and 4% percent said it cost too much to use the benefits, while 6% cited additional reasons, the Commonwealth Fund found.

Dental care, vision care, and an allowance for over-the-counter medications were the benefits most often used, the survey found.

The survey comes as enrollment in Medicare Advantage surpassed traditional Medicare for the first time last year – which cost taxpayers more.

Read: Medicare is quietly being privatized. Does anyone care?

Medicare spends 6% more for Medicare Advantage enrollees than it would spend if those beneficiaries were enrolled in traditional Medicare, a difference that translated into about $27 billion in extra costs 2023, according to projections from the Medicare Payment Advisory Commission report to Congress.

“As more older adults shift into Medicare Advantage plans and its cost to the federal government grows, it is important to ensure that both programs deliver value to Medicare beneficiaries,” Jacobsen said.

So, do the extra benefits justify the extra cost for Centers for Medicare & Medicaid Services to cover Medicare Advantage?

Read: Nearly 20% of seniors on Medicare are ‘underinsured’ — and Medicare Advantage is no better

Medicare Advantage plans can use the extra money to provide the supplemental benefits, lower the cost of services, and retain some for administrative costs and profit, Freed said.

“Medicare Advantage plans are given more money to provide these benefits. It’s important that subscribers do take advantage of them,” Freed said.

In November, the CMS proposed requiring Medicare Advantage plans to send a personalized notification to their enrollees mid-year of the unused supplemental benefits available to them to encourage higher utilization. That proposal is expected to be finalized in April, according to the Commonwealth Fund.

“If people are selecting Medicare Advantage for that reason of extra benefits, that would be a good reminder to people,” Freed said.

Meanwhile, Johnson disagreed.

“I don’t think it will make a big difference to require MA plans to notify people. MA plans try to do so already, clogging the snail mail and daily email with a steady 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 out-of-pocket maximum instead of loading up plans with stuff people aren’t getting, or do something to improve health such as automatically provide vouchers for groceries,” 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 – there was essentially no difference between the types of plans in that respect.

Larger shares of beneficiaries in Medicare Advantage plans than in traditional Medicare reported they experienced delays in getting care because of the need to obtain prior approval (22% vs. 13%) and couldn’t afford care because of copayments or deductibles (12% vs. 7%).