MA Beneficiaries Satisfied With Coverage but Face Financial Barriers

March 24, 2023 - Medicare Advantage beneficiaries face more financial barriers than Medicare Supplement beneficiaries, but plan satisfaction is high for both groups, an eHealth report found.

The report reflects survey responses from 3,880 Medicare Advantage and Medicare Supplement beneficiaries collected in February 2023.

Almost 90 percent of Medicare Advantage beneficiaries (89 percent) and Medicare Supplement beneficiaries (87 percent) said they were satisfied with their health plan coverage. Just 4 percent of members in each group reported dissatisfaction with their coverage.

Medicare Advantage beneficiaries (41 percent) were more likely to say their satisfaction was greater than a year ago than those with Medicare Supplement (20 percent). Around half of Medicare beneficiaries said their satisfaction remained the same compared to 71 percent of Medicare Supplement beneficiaries.

Despite similar satisfaction levels, the two beneficiary groups experience different financial circumstances.

More than 70 percent of Medicare Advantage beneficiaries live on less than $50,000 per year. Thirty-nine percent reported an annual household income of less than $25,000 per year, 34 percent said their household makes between $25,000 and $50,000 per year, and 27 percent said their household income is $50,000 or greater.

In contrast, 50 percent of people with Medicare Supplement have an annual household income over $50,000. Just 19 percent said their household income is less than $25,000 and 31 percent have a household income between $25,000 and $50,000.

Due to lower incomes, Medicare Advantage beneficiaries have more limits on what they can afford. For example, 52 percent said they could only afford Medicare coverage without a monthly premium. Eighteen percent of beneficiaries can only afford a monthly premium of $25 or less.

Meanwhile, 43 percent of beneficiaries enrolled in Medicare Supplement plans said they can afford monthly premiums between $100 and $200, and 17 percent said they could afford more than $200 per month.

The groups also differ in their ability to cover out-of-pocket costs.

Only 37 percent of Medicare Advantage beneficiaries said they have enough savings to cover their maximum out-of-pocket costs if hospitalized, while 63 percent do not. Over half of beneficiaries (65 percent) said out-of-pocket costs higher than $1,000 are unaffordable.

Over a third of beneficiaries can afford no more than $250 in out-of-pocket expenses, 14 percent can afford between $250 and $500, and 15 percent can afford $500 to $1,000.

Among Medicare Supplement beneficiaries, 61 percent have enough savings to cover their maximum out-of-pocket costs and 39 percent do not. Fifty-eight percent of beneficiaries can afford $1,000 or more in out-of-pocket expenses; 22 percent can afford between $1,000 and $2,000, 18 percent can afford between $2,000 and $4,000, and 18 percent can afford more than $4,000.

Just 16 percent of people with Medicare Supplement said they could not afford out-of-pocket costs higher than $250.

When it comes to concerns about the future of their medical care, Medicare Advantage and Medicare Supplement beneficiaries differ once again. The top worry for Medicare Advantage beneficiaries is not being able to afford their medical care, with 39 percent voicing this concern. A smaller share (28 percent) are concerned about their Medicare benefits being reduced.

The priorities are switched for Medicare Supplement beneficiaries, with 32 percent worried about their benefits being reduced and 27 percent concerned about being unable to afford their care in the future.

The report reinforces similar findings from the Kaiser Family Foundation, which found that traditional Medicare beneficiaries with supplemental coverage experienced fewer cost-related hurdles compared to Medicare Advantage beneficiaries.

Although Medicare Advantage enrollment continues to grow and beneficiaries report high satisfaction, the report indicates that this population may experience more financial barriers to healthcare coverage than other Medicare beneficiaries.