Beneficiaries are choosing Medicare Advantage over traditional Medicare due to the benefit offerings and out-of-pocket cost limits, a survey shows.
Almost one-fourth of MA beneficiaries cited additional benefits as the main factor in their decision to enroll, and the share was larger among people with the lowest incomes compared with the highest-income enrollees – 36% versus 20%, according to the Commonwealth Fund survey.1
Meanwhile, 20% pointed to the out-of-pocket spending limit, with 8% of dual-eligible beneficiaries naming it as the main factor in their decision, compared with 22% of those who were eligible for Medicare but not Medicaid.
Beneficiaries who chose traditional Medicare over MA did so due to flexibility in provider choice, with 50% of beneficiaries with supplemental coverage citing provider choice as the main factor, compared with 22% of those without.
Understanding what drives beneficiaries’ decisions will be key as MA enrollment continues to grow. Currently, 45% percent of Medicare beneficiaries are enrolled in MA, and that is expected to increase to more than 50 percent by 2025.2
It is also important to understand how beneficiaries choose a plan, and the survey found about one in three Medicare beneficiaries used insurance brokers or agents to help them with that decision. Another 14% of those in traditional Medicare and 20% of those in MA received help from friends and family in choosing coverage. Use of the Medicare.gov website and hotline and State Health Insurance Assistance Programs was less frequent, with Medicare.gov used most frequently by beneficiaries with the lowest incomes.
About 6% of beneficiaries overall said marketing and advertising helped them choose a plan, though advertisements were more important to decision making by Black beneficiaries and those with low incomes.
About 40% of beneficiaries did not receive any help in selecting a plan, including about 56% of the highest-income enrollees.
MA plans that want to maximize their number of new enrollees should play to their strengths by designing strong benefits packages that address the needs of their prospective members. They should also offer clear, user-friendly information to help them choose a plan and make sure potential enrollees are aware of their benefits and out-of-pocket limits. By ensuring beneficiaries are able to identify and select plans that meet their needs, MA plans can ensure their members are living their best and healthiest lives.
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References
- Leonard, F., Jacobson, G., Haynes, L., Collins, S. Traditional Medicare or Medicare Advantage: How Older Americans Choose and Why. The Commonwealth Fund. Oct. 17, 2022. https://www.commonwealthfund.org/publications/issue-briefs/2022/oct/traditional-medicare-or-advantage-how-older-americans-choose
- Gretchen Jacobson and David Blumenthal, “Medicare Advantage Enrollment Growth: Implications for the U.S. Health Care System,” JAMA327, no. 24 (June 28, 2022): 2393–94.
