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In the sometimes bleak landscape of American health insurance coverage—which 71% of Americans rate as fair or poor—there may be a bright spot: Medicare Advantage.
New research, released today from eHealth (NASDAQ
Among people who had who purchased a Medicare Advantage plan through eHealth’s website, 88% were very or somewhat satisfied with their coverage and just 6% were dissatisfied. Nearly the same percentage (86%) said they would recommend Medicare Advantage to a friend or family member; only 3% said they would not.
Medicare Advantage, also known as Medicare Part C, combines Original Medicare—Parts A and B which cover hospitalizations and outpatient care—with other benefits, often including Part D prescription coverage and extras such as dental, vision, hearing, and fitness benefits.
Nearly half (46%) of survey respondents opted for Medicare Advantage because they wanted all their Medicare benefits in one plan.
Among those who had previously been enrolled in other types of Medicare coverage, 61% said they preferred Medicare Advantage and 24% said they were just as satisfied with Medicare Advantage as they’d been on other Medicare coverage.
Specifically, 59% of respondents who had purchased Medicare Supplement plans—also known as Medigap—were more satisfied with their Medicare Advantage plan. Two-thirds (67%) of those said Medigap was too costly. One-quarter said they preferred Medicare Advantage because Medigap does not offer drug coverage.
Other reasons respondents chose to enroll in Medicare Advantage included coverage of preferred doctors, hospitals, and pharmacies; prescription drug coverage; and affordable monthly premiums.
Yet some of the very same motivations for enrolling in Medicare Advantage were also the top reasons cited among the minority of respondents who reported being dissatisfied with Medicare Advantage. For example, 29% of dissatisfied respondents blamed their dissatisfaction on lack of coverage for their preferred doctors, hospitals, or pharmacies. Another 22% pointed to lack of prescription drug coverage.
The survey also found a high degree of price sensitivity among respondents. Nearly half (48%) said they couldn’t afford to pay any monthly premiums and another 25% said they’d only be able to afford monthly premiums of less than $50. Three-quarters (74%) reported that they could only afford annual out-of-pocket costs of $1,000 or less.
Those findings may help explain the growing popularity of Medicare Advantage plans.
In 2021, 26 million people—42% of all Medicare beneficiaries—chose Medicare Advantage. Medicare Advantage enrollment has more than doubled in the past ten years.
According to the Kaiser Family Foundation, most (59%) Medicare Advantage plans with prescription drug coverage on the market in 2022 charged no additional monthly premiums (beyond the standard Medicare Part B premium from Original Medicare). Nearly all (98%) Medicare beneficiaries had access to at least one zero-premium Medicare Advantage option that included prescription drug coverage.
These are popular options. Nearly two-thirds (65%) of enrollees have chosen zero-premium plans. Another 20% pay less than $50 per month for their Medicare Advantage plan with prescription drug coverage.
The Medicare Advantage picture is not entirely rosy, though.
A federal report released in April 2022 suggested that Medicare Advantage plans may be delaying or denying medically necessary care. A review of denied claims showed that 13% met Medicare coverage criteria, suggesting that Medicare Advantage plans were applying additional criteria not found in the Medicare rules. Additionally, the review found that some requests for additional documentation were unnecessary. These findings suggest that Medicare Advantage plans were creating undue burdens on patients to receive needed care.
The latest report was consistent with a 2018 review which high levels of successful appeals. Of denied claims that beneficiaries tried to appeal, 75% of denials were overturned, indicating they may have been inappropriately denied in the first place.
In eHealth’s survey, respondents reported relatively few coverage denials. Overall, 13% had had a claim or prior authorization request denied. Many fewer had been denied coverage for a specific prescription (3%), visits with a specific doctor (2%), or coverage for hospitalization (1%).
Of those who’d received denials, 43% said the reason was that the requested service was excluded from their plan coverage and 15% said the denial was because their request was deemed not to be medically necessary. Ultimately, 15% reported that the original denial was eventually overturned and paid by their insurer.
Overall, the eHealth results reflect well on Medicare Advantage as an option. Most (61%) survey respondents said they see Medicare Advantage of a good example of public/private cooperation.
Bob Rees, vice president of Medicare sales for eHealth, described the benefits of combining government with private sector players in the Medicare Advantage market. In fact, he says, it’s part of the program’s success.
“On the one hand, private sector efficiencies keep costs down and there’s a lot of convenience in having all your coverage wrapped up in a single plan. On the other hand, private insurers can limit beneficiaries to receiving care within their doctor and hospital networks,” Rees said. “There’s always room for improvement but it’s important to listen to the consumer and understand what works and what doesn’t. As shown in our report, for the strong majority, affordability and convenience trump other considerations.”
This article was updated to include Bob Rees’ comments.
