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 by eHealth (NASDAQ: EHTH) shows that people enrolled in Medicare Advantage plans are very satisfied with what they have.
Among people who purchased a Medicare Advantage plan through the eHealth website, 88% were very or somewhat satisfied with their coverage and only 6% were dissatisfied. Almost the same percentage (86%) say 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 like dental, vision, hearing, and fitness benefits .
Nearly half (46%) of respondents chose Medicare Advantage because they wanted all of their Medicare benefits in one plan.
Among those previously enrolled in other types of Medicare coverage, 61 percent said they preferred Medicare Advantage, and 24 percent said they were just as satisfied with Medicare Advantage as they were with other Medicare coverage.
Specifically, 59 percent of respondents who purchased Medicare supplement plans—also known as Medigap—were more satisfied with their Medicare Advantage plan. Two-thirds (67%) of those said Medigap is too expensive. A quarter said they prefer Medicare Advantage because Medigap doesn’t offer drug coverage.
Other reasons respondents chose to enroll in Medicare Advantage included preferred physician, hospital, and pharmacy coverage; prescription drug coverage; and affordable monthly premiums.
Yet some of the same reasons for enrolling in Medicare Advantage were also the main reasons cited among the minority of respondents who reported dissatisfaction with Medicare Advantage. For example, 29% of dissatisfied respondents blamed their dissatisfaction on the lack of coverage for their preferred doctors, hospitals or pharmacies. Another 22% cited a lack of prescription drug coverage.
The survey also found a high degree of price sensitivity among respondents. Nearly half (48%) said they could not afford to pay any monthly premiums, and another 25% said they could only afford monthly premiums under $50. Three-quarters (74%) report they can only afford annual out-of-pocket expenses of $1,000 or less.
These findings may help explain the growing popularity of Medicare Advantage plans.
In 2021, 26 million people — 42 percent 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). Almost 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 chose zero-premium plans. Another 20% pay less than $50 a month for their Medicare Advantage plan with prescription drug coverage.
However, the picture for Medicare Advantage is not entirely rosy.
A federal report released in April 2022 suggests that Medicare Advantage plans may be delaying or denying needed medical care. A review of denied claims showed that 13% met Medicare coverage criteria, suggesting that Medicare Advantage plans apply additional criteria not found in Medicare rules. In addition, the review found that some requests for additional documentation were unnecessary. These findings suggest that Medicare Advantage plans create an undue burden for patients to receive the care they need.
The latest report was consistent with a 2018 review of high levels of successful appeals. Of the denied claims that beneficiaries tried to appeal, 75% of the denials were overturned, indicating that they may have been denied inappropriately.
In the eHealth survey, respondents reported relatively few denials of coverage. Overall, 13% had a claim or prior authorization request denied. Far fewer were denied coverage for a specific prescription (3%), visits to a specific doctor (2%), or coverage for hospitalization (1%).
Of those who were denied, 43 percent said it was because the requested service was excluded from their plan’s coverage, and 15 percent said the denial was because their request was not deemed medically necessary. Ultimately, 15% reported that the initial denial was eventually reversed and paid by their insurer.
Overall, eHealth results reflect well on Medicare Advantage as an option. Most (61%) survey respondents said they see Medicare Advantage as a good example of public/private collaboration.
Bob Rees, vice president of Medicare eHealth sales, described the benefits of combining government with private sector players in the Medicare Advantage market. In fact, he says, that’s part of the program’s success.
“On the one hand, the efficiency of the private sector keeps costs down, and there’s great convenience in having all your coverage wrapped up in one plan. On the other hand, private insurers may limit beneficiaries from receiving care within their physician and hospital networks,” Rees said. “There’s always room for improvement, but it’s important to listen to the user and understand what works and what doesn’t. As our report shows, affordability and convenience trump other considerations for a strong majority.”