America's Benefit Specialist December 2022

MEDICARE MATTERS

THE KEY FACTORS UNDERLYING AMERICANS’ CHOICE OF TRADITIONAL MEDICARE OR MEDICARE ADVANTAGE

with the highest incomes (over 400% of FPL) cited the additional benefits (36% vs. 20%, respectively) and a smaller share of du al-eligible beneficiaries (low-income adults enrolled in both Medicare and Medicaid) cited the out-of-pocket limits (eight percent vs. 22%, respectively) as their main reason for choosing Medicare Advantage over traditional Medicare. Greater choice in providers was the reason most frequently given for choosing traditional Medicare. This was true for beneficiaries who supplement their cover age with a private insurance plan as well as those who don’t supplement, although beneficiaries with supplemental coverage cited provider choice as the primary reason at two times the rate of those without it (50% vs. 22%). Decision-Making: Medicare beneficiaries have a variety of sources for information and advice on Medicare plan choices. According to the survey, about 40% did not receive any help with their plan choice. A larger proportion of people with incomes above 400 percent of FPL reported not receiving help (56%). In 2022, people who received help with their plan choice most frequently turned to brokers and agents for help; this was true for both traditional Medicare and Medicare

rollment in Medicare Advantage plans has grown rapidly over the past decade. Forty-five percent of Medicare beneficiaries are enrolled in Medicare Advantage plans in 2022, a share that is projected to rise to more than 50% by 2025. In its 2022 Biennial Health Insurance Survey, The Commonwealth Fund asked people age 65 and older who were enrolled in Medicare as their primary source of cov erage why they chose Medicare Advantage or traditional Medicare, and what resources they used to choose their coverage. The survey firm SSRS interviewed a nationally representative sample of 8,022 adults age 19 and older between March 28 and July 4, 2022. This analysis focuses on 1,605 respon dents age 65 and older who were enrolled Choice: Extended benefits were the most common reasons cited for choosing a Medi care Advantage plan. About one in four (24%) Medicare beneficiaries enrolled in a Medicare Advantage plan cited its addition al benefits, while one in five (20%) pointed to a limit on out-of-pocket spending as the main reason for their choice. A larger share of people with the lowest incomes (below 100% of the federal poverty level) than those in Medicare. FINDINGS

Since almost the inception of the Medicare program, beneficiaries have had the choice of receiving coverage through traditional Medicare or private insurance plans, known today as Medicare Advantage plans. Each year, during Medicare open enrollment, ben eficiaries can reassess their coverage options to decide which coverage best meets their health needs and budget. Little research has been conducted to understand how and why beneficiaries make these choices. Beneficiaries weigh several trade-offs. On one hand, Medicare Advantage plans typically provide some coverage for benefits not included in traditional Medicare, such as eyeglasses. Plans also have a cap on out-of-pocket expenses for services covered by traditional Medicare, while traditional Medicare does not have a similar limit. On the other hand, traditional Medicare allows beneficiaries to go to any doctor, hospital or other health care provider that accepts Medicare, without the need for prior approval; Medicare Advantage enrollees typically need a referral from their primary care physician as well as plan approval if they want services from specialists, such as oncologists, covered by the plan. Historically, most Medicare beneficia ries have chosen to receive their benefits through traditional Medicare but en

MEDICARE BENEFICIARIES, REGARDLESS OF THEIR SOURCE OF COVERAGE, SEEM TO MOST FREQUENTLY RELY ON THE ONE-ON-ONE HELP PROVIDED BY BROKERS AND AGENTS IN CHOOSING A MEDICARE PLAN.

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