Are Medicare Advantage plans really providing supplemental benefits as advertised?

Medicare Advantage not delivering on supplemental benefits: © wladimir1804 stock.adobe.com

An analysis from researchers at Mass General Brigham casts doubt on the effectiveness of Medicare Advantage plans in providing supplemental benefits like dental, vision, and hearing services, compared to traditional Medicare. Despite being marketed as offering enhanced services, Medicare Advantage beneficiaries did not significantly outperform their traditional Medicare counterparts in utilizing these benefits, according to the study published in JAMA Network Open.

“Medicare Advantage plans receive more money per beneficiary than traditional Medicare plans, but our findings add to the evidence that this increased cost is not justified,” said Christopher L. Cai, M.D., the study’s first author, who conducted this research during his residency at Brigham and Women’s Hospital.

Key findings

The study analyzed data from 76,557 Medicare beneficiaries collected between 2017 and 2021 through the Medical Expenditure Panel Survey and the Medicare Current Beneficiary Survey. Key findings include:

• Only 54.2% of Medicare Advantage beneficiaries were aware of their dental coverage, and 54.3% knew about their vision coverage.
• Medicare Advantage enrollees were no more likely than traditional Medicare enrollees to receive eye exams, hearing aids, or eyeglasses.
• Out-of-pocket spending for supplemental benefits was similar between the two groups. For instance:

1. Eyeglasses: $205.86 for Medicare Advantage vs. $226.12 for traditional Medicare (a 9.% reduction for Medicare Advantage).
2. Dental visits: $226.82 for Medicare Advantage vs. $249.98 for traditional Medicare (a 9.3% reduction).
3. No significant cost differences were observed for optometry visits or durable medical equipment (used as a proxy for hearing aids).

Nationwide, Medicare Advantage plans spent $3.9 billion annually on vision, dental services, and durable medical equipment. However, enrollees still faced $9.2 billion in out-of-pocket costs, while private insurers covered an additional $2.8 billion. The study highlighted that Medicare Advantage plans receive $37.2 billion more annually from taxpayers than traditional Medicare—a surplus partially intended to fund these supplemental benefits.

Lisa Simon, M.D., senior author and assistant professor at Brigham and Women’s Hospital, said there are unmet expectations surrounding Medicare Advantage plans. “Supplemental benefits are a major draw to Medicare Advantage, but our findings show that people enrolled in Medicare Advantage have no better access to extra services than people in traditional Medicare, and that much of the cost comes out of their own pockets,” she said. “Older adults and people with disabilities deserve better from Medicare.”

The researchers say the study’s findings raise questions about the cost-effectiveness and value of Medicare Advantage plans, particularly as they pertain to supplemental benefits. Policymakers may need to reexamine the structure and funding of these plans to ensure that beneficiaries truly receive enhanced services without undue financial burden.