How Much Do Medicare Advantage Enrollees Value and Use Their Supplemental Benefits?

Introduction

Medicare beneficiaries receive their Medicare-covered benefits through either traditional Medicare (TM) or private insurance plans known as Medicare Advantage (MA) plans. In 2024, more than half of Medicare beneficiaries were enrolled in MA plans. One feature driving enrollment in MA plans¹ is that they typically provide supplemental benefits not covered by TM.² These can include vision, hearing, dental, fitness, and over-the-counter medication coverage, as well as other benefits.

Because MA plans are allowed to tailor benefit packages, there can be significant differences in the types of benefits covered and the scope of coverage. For example, some MA plans offer only preventive dental services, such as X-rays and cleanings, and others offer more comprehensive dental benefits, such as periodontal care or restorative care. Most supplemental benefits are required to be “primarily health related” — for example, adult day care, bathroom safety devices, nonemergency medical transportation, or therapeutic massage.³ For chronically ill enrollees, however, MA plans can offer other benefits, such as pet food, pest control, grocery shopping, air purifiers, and in-home living support services.

Supplemental benefits are largely financed by rebates that the Centers for Medicare and Medicaid Services (CMS) pays to the plans. Rebate payments are a percentage of the difference between the plan’s per member per month (PMPM) bid to offer Medicare benefits and the maximum PMPM payment that CMS sets annually as the county-level benchmark. Plans with higher quality ratings receive a larger share of the difference.

Over the past decade, annual payments have increased dramatically, from $12.0 billion in 2014 to $60.5 billion in 2023.⁴ Every year, MA plans submit information about the supplemental benefits they will offer for the upcoming plan year, but there are only limited data on beneficiaries’ utilization of these benefits.⁵ Accurate data on the value and use of supplemental benefits could inform policy discussions and the federal government’s oversight of these benefits.

In an earlier analysis of the Commonwealth Fund 2024 Value of Medicare Survey, we found that seven in 10 MA beneficiaries reported using some of their supplemental benefits, with varying rates of use by different types of benefits.⁶ In this brief, we examine the same survey findings to understand how beneficiaries perceive the value of different supplemental benefits and whether that perception is associated with their relative use of these benefits. We analyze the responses by beneficiaries’ annual income level, race/ethnicity, functional limitations, or health-related difficulties in caring for themselves (such as eating or bathing). (See “How We Conducted This Survey” for more details.)

Survey Findings

Eight of 10 Medicare beneficiaries overall reported that supplemental benefits beyond doctor and hospital coverage are very or somewhat important to them. People with an income of less than $50,000 were more likely to report that supplemental benefits were important than were those earning $100,000 or more. Beneficiaries with functional limitations and Black or Hispanic beneficiaries were more likely to report that supplemental benefits were important than beneficiaries without functional limitations and white beneficiaries. This pattern is consistent with previous research indicating that supplemental benefits are more valuable for beneficiaries of lower socioeconomic status and those who identify as Black or Hispanic.⁷

A larger share of MA than TM beneficiaries perceived supplemental benefits to be very or somewhat important in their coverage. A higher percentage of MA beneficiaries who value supplemental benefits used one of their plan’s supplemental benefits in the past 12 months.

We asked about the use of specific supplemental benefits, focusing on the four most common benefits offered by MA plans — dental, vision, hearing, and an over-the-counter (OTC) medication card.⁸ Two of five MA enrollees (42%) reported using dental benefits, with a higher likelihood among those who considered supplemental benefits to be important. The likelihood of using dental benefits was similar across people with different income levels, functional limitations, and racial/ethnic identities.

Similar to dental benefits, two of five MA enrollees (41%) reported using vision benefits, with a higher likelihood among those who considered benefits to be important. The likelihood of using vision benefits was similar across people with different income levels, functional limitations, and racial/ethnic identities.

One of 15 MA beneficiaries (7%) reported using hearing benefits (data not shown). Beneficiaries who reported supplemental benefits to be important were more likely to use hearing benefits than those who did not report benefits to be important (data not shown). The likelihood of using hearing benefits was similar across people with different income levels, functional limitations, and racial/ethnic identities (data not shown).

Nearly half of MA beneficiaries reported using a benefit offered by their plan that helps pay for OTC medications. We found that beneficiaries who perceived supplemental benefits to be important and those with a lower income (<$75,000) were more likely to use OTC benefits than those who did not perceive benefits to be important and those with a higher income ($100,000+). Although more recent estimates are not available, in 2010–11, nearly 64 percent of older adults reported using an OTC medication, including dietary supplements.⁹

Discussion

Use of Medicare Advantage plan benefits may be tied to beneficiaries’ awareness of those benefits, their need for them, and the barriers they encounter when accessing them, such as restricted provider networks, annual limits, or limited coverage. Although most MA enrollees are in plans that offer dental (98%), vision (100%), hearing (96%), and OTC medication (88%) benefits, our findings show that many of these enrollees do not report using them.¹⁰ This is the case despite clinical recommendations that people get regular dental exams,¹¹ such as every six months,¹² an eye exam every one or two years,¹³ and a hearing exam every few years. Moreover, most MA beneficiaries are enrolled in plans that allow one dental, eye, and hearing exam every year without cost sharing. This evidence reinforces other data showing that Medicare beneficiaries tend to underutilize their health care benefits. For example, only about 45 percent of beneficiaries each year use the Annual Wellness Visit benefit, a Medicare benefit with no cost sharing.¹⁴ Clearly, underuse is an area requiring further research.¹⁵

We also found that a higher percentage of Medicare beneficiaries who have lower incomes, live with functional limitations, or identify as Black or Hispanic value the supplemental benefits that are offered by MA plans. The absence of such benefits in traditional Medicare could be driving these traditionally underserved groups to enroll in MA plans and could explain the recent trends showing an increasing enrollment of Black, Hispanic, and dual-eligible beneficiaries in MA.¹⁶ We also found that dental, vision, hearing, and OTC benefits are used more by those who say they value supplemental benefits in general, and benefits for OTC medications are more commonly used by those with a lower household income.

To promote awareness of plan benefits, beginning in 2025, the Centers for Medicare and Medicaid Services is requiring MA plans to provide enrollees a “Mid-Year Enrollee Notification of Unused Supplemental Benefits” each year between June 30 and July 31 of the plan year.¹⁷ This personalized notice will include a list of the supplemental benefits that have not been accessed by the enrollee during the first half of the plan year. The notice also will include details about the benefit scope, cost sharing, network requirements, and any other information required to facilitate access, such as a customer service number.¹⁸

Currently, data on the utilization of supplemental benefits is not publicly available for all plans.¹⁹ This lack of data limits the government’s ability to oversee the spending on and ensure the quality of supplemental benefits. As a first step in this direction, CMS clarified in its recently proposed rules that MA plans must submit utilization data for supplemental benefits beginning with those provided in 2024.²⁰ CMS also provided detailed guidelines, including about updating the forms in the encounter data system, to facilitate this data collection.²¹

In addition, we need more data on why some MA enrollees are not using these benefits, whether the benefits are serving those who need them most, and whether enrollees might find other benefits more valuable. All these data are important for understanding gaps and opportunities in the design and administration of supplemental benefits to ensure that Medicare Advantage plans meet the needs of all their enrollees.