Most Medicare Beneficiaries Say Their Coverage
Doesn’t Fit Their Needs, Yet Few Will Make
Adjustments During 2024 Enrollment Period
While many older Americans benefit from Medicare, a federal health insurance program, navigating the complicated system can often prove confusing and stressful. These issues arise during the Annual Enrollment Period (AEP), which runs from October 15 to December 7, 2023.
During this period, millions of older Americans will have the opportunity to modify their Medicare Advantage and prescription drug plans. Previous analysis of Medicare data from the Kaiser Family Foundation found around 10 percent of Medicare Advantage recipients switched plans during the 2020 AEP. According to our new research, a similar percentage plan to make changes to their coverage this year.
Our recent study of over 1,000 Medicare recipients also explores why some customers switch plans during AEP and why they’re dissatisfied with their current coverage. This report is intended to help policymakers and insurers understand how to attract and retain customers, and more importantly, keep consumers happy and healthy.
Key Findings:
- 9% of Medicare enrollees (about 5.9 million people) will adjust their coverage during this year’s AEP. About 26% of Medicare recipients have modified their coverage in the past.
- Cost is the primary driver for those planning to change their Medicare coverage. These people currently pay 40% more per month on medical expenses than those sticking with their current coverage.
- 61% of Medicare recipients feel their current coverage isn’t a good fit for them but believe switching would be too burdensome.
- Only 24% of Medicare beneficiaries felt extremely confident that they understood their Medicare benefits, and another 22% felt confused by AEP marketing materials. This confusion could dissuade individuals from researching new coverage.
- During AEP, all beneficiaries should review their Medicare coverage, but only 42% will do so this year. Nearly half of enrollees will simply allow coverage to renew automatically without considering changes.
A Quick Primer on Medicare Plans and Provisions
For a deeper dive into the details of current Medicare provisions, reference our Complete Guide to Medicare in 2024. Below is a chart of the various parts of Medicare to provide a context for this study’s findings.
Medicare's four primary components include two administered by the federal government (Parts A and B) and two private plans overseen by the government (Parts C and D). Private insurers also offer Medigap policies to supplement governmental coverage.
During AEP, Medicare beneficiaries can make a few different types of adjustments to the various parts of their coverage, such as:
- Switching from Original Medicare (Parts A and B) to Medicare Advantage
- Switching from Medicare Advantage to Original Medicare
- Selecting a new Medicare Advantage plan
- Adding or removing prescription drug coverage from a Medicare Advantage plan
- Switching or removing Part D plans
How Many Medicare Beneficiaries Will Adjust Their Coverage During AEP?
As of June 2023, there were over 66 million Medicare enrollees, all eligible to adjust their Medicare Advantage or prescription drug coverage beginning on October 15. Despite the availability of plentiful options and various price points designed to fit myriad medical needs, only two out of five Medicare recipients will even review their coverage this year.
Nine percent of participants – or about 5.9 million people – will ultimately change their Medicare coverage during this Annual Enrollment Period. Those who fail to change, or even review, their coverage during the AEP may regret not taking advantage of the opportunity. Personal health situations and plan provisions can change year-over-year. While those enrolled in Medicare Advantage plans may adjust their coverage during the Medicare Advantage Open Enrollment Period (January 31-March 31), failure to review coverage during the AEP can result in insufficient coverage during the following year.
Diane Omdahl, co-founder of the Medicare consulting service 65 Incorporated, emphasizes the importance of reviewing coverage annually. “Recipients are often amazed at how much can change from one year to the next. I have heard from too many beneficiaries in January who did not pay attention and are now stunned at the changes they must live with for the year,” she said.
Here are a few insurance elements that can change yearly, which are important to track:
- Premiums: Monthly costs can go up or down.
- Deductibles: The amount beneficiaries pay before insurance kicks in can change.
- Copayments and coinsurance: Beneficiaries’ share of service costs might have been updated.
- Drug formularies: The list of covered medications may change.
- Provider network: Doctors and hospitals in the plan may change.
What Are the Main Reasons Medicare Beneficiaries Change Coverage?
Generally, older Americans looking to adjust their Medicare Advantage coverage were far less satisfied with their network providers, quality of care, and healthcare prices than those who were not making changes this year.
The emphasis on pricing dissatisfaction echoes the primary driver for Medicare plan changes in previous years. About 26 percent of current enrollees have changed their coverage at least once in earlier AEPs. A need for lower premiums was the leading cause for those adjustments.
| What caused you to switch your coverage plan or provider? | Percentage of beneficiaries who changed coverage in past AEPs |
|---|---|
| Needed lower premium costs | 32% |
| Lack of coverage for specific treatments or medications | 17% |
| Limited network of doctors or hospitals | 13% |
| Relocation to a new area | 13% |
| Recommendations from friends or family | 11% |
| Change in health needs or conditions | 10% |
| Unsatisfactory customer service | 9% |
| Plan no longer covered important medications | 9% |
| Employer no longer offered that plan | 7% |
| I didn’t use enough of the plan benefits | 5% |
| Difficulty in using the plan's services (e.g., claims, approvals) | 4% |
| Poor plan reviews | 2% |
Note: Multiple selections allowed
Though premiums were the primary factor behind most historical switches, service quality, and coverage breadth also played significant roles. Many enrollees adjusted their coverage to ensure that specific medical conditions and prescriptions remained covered. Others changed coverage because of limited networks, unsatisfactory customer service interactions, or feedback from friends, family members, or online reviewers.
Providers should take note of these concerns. Though only nine percent of current enrollees are committed to changing their Medicare coverage this autumn, we found that another nine percent are open to altering their coverage or switching Advantage providers in the future.
Again, healthcare costs emerged as the main reason these recipients would consider changing Medicare coverage, though limited networks and specific coverages carried nearly the same weight. Poor customer service and administrative difficulties would also drive many to dump their current insurance.
| What would cause you to look for different insurance coverage in the future? | Percent of Medicare beneficiaries |
|---|---|
| Increased cost (premium, deductibles, or copayments) | 59% |
| If all my doctors/hospitals were not covered | 57% |
| Lack of coverage for specific treatments or medications | 55% |
| Difficulty in using the plan's services (e.g., claims, approvals) | 36% |
| Unsatisfactory customer service | 30% |
| Poor plan reviews or low customer ratings | 13% |
| Recommendations from friends or family | 8% |
Note: Multiple selections allowed
With so many Medicare recipients either planning or willing to alter their current coverage, carriers should not take their customers for granted. Quality customer service, quick claim approval, inclusive networks, and coverage for a broader range of treatments are the best ways to instill loyalty among clients.
Limiting out-of-pocket expenses, however, consistently proves most important.
Medicare Costs: A Rising Concern
Medical costs have soared since the pandemic, with insurance rates poised for another spike in 2024. The U.S. spends more than twice as much on healthcare per capita than other developed nations, leaving little wonder that medical expenses are the number one concern among American households.
Medicare's inherent controls help insulate recipients against such price increases. Still, with many recipients on fixed incomes already ravaged by inflation, any medical cost fluctuation is impactful.
We’ve seen above how plan premiums and out-of-pocket expenses greatly influence Medicare decisions. These choices are not based merely on perception but on discernible dollars and cents. Enrollees intent on changing their coverage in the upcoming AEP pay 40 percent more per month than satisfied customers set on keeping their coverage.
Note: Monthly medical expenses included insurance premiums, copayments, medications, and other out-of-pocket expenses not covered by insurance
This difference in monthly outlays can prove significant or even tragic. For older Americans, managing healthcare expenses often becomes a balancing act. When medical costs bite into budgets, it can force difficult decisions affecting positive outcomes and overall quality of life.
We found that surprising numbers of Medicare-eligible citizens had avoided medical attention, skipped prescription doses, or delayed surgeries due to financial concerns. About 23 percent admitted to at least one of these omissions, and nearly 40 percent were concerned about their access to quality, affordable medical care.
Many Medicare recipients need to find coverage that better fits their needs or budgets – so why aren't more switching coverage?
Medicare Confusion: Information Overload Makes it Hard to Pick the Right Plan
Though fewer than 10 percent of Medicare recipients intend to adjust their coverage during this AEP, the other 90 percent aren’t necessarily happy with their coverage. In fact, 61 percent of enrollees told us that even though their current coverage isn’t a great fit, changing their insurance seemed more trouble than it was worth.
Part of the problem is a lack of clarity regarding Medicare’s complicated options and rules. To make informed decisions, recipients require a firm grasp of Medicare provisions, yet too many eligible Americans have misconceptions about the program.
As part of this research, we administered a short quiz about the basic tenets of Medicare (concerning premiums, coverage, providers, and enrollment). Only half of Americans age 65+ answered all Medicare knowledge questions correctly.
| Medicare quiz questions | Correct answer | Percent answering correctly |
|---|---|---|
| True or false: Medicare original has no premiums, deductibles, or copayments. It’s free for everyone aged 65 and over. | FALSE | 75% |
| True or false: Medicare Parts B, C, and D have premiums that must be paid. | TRUE | 86% |
| True or false: To get any Medicare coverage, you must go through private insurers. | FALSE | 96% |
| When does Medicare’s Annual Enrollment Period (AEP) take place? This is also known as the Medical Annual Election Period. | October-December | 83% |
Just 24 percent of enrollees felt extremely confident that they understood their Medicare benefits. The public needs to be better informed, yet knowing where to turn in an age of aggressive marketing and misinformation can prove challenging.
Competition among private insurers for Medicare business (Advantage, Medigap, Plan D policies) invariably bombards seniors with dubious advertising, further cluttering the matter.
Only 11 percent of recipients trust the unsolicited marketing material received ahead of the AEP. Far more feel indifferent, skeptical, overwhelmed, confused, or frustrated by the deluge.
| How do you feel about the ads, brochures, and information you’ve received about this year’s AEP? | Percent of Medicare beneficiaries |
|---|---|
| Indifferent 😐 | 36% |
| Skeptical 🤨 | 26% |
| Overwhelmed 😫 | 24% |
| Curious 🤓 | 22% |
| Confused 😖 | 16% |
| Frustrated 😡 | 16% |
| Trusting 😌 | 11% |
| Relieved 🙂 | 11% |
| Anxious 😨 | 10% |
| Empowered 💪 | 9% |
Note: Respondents could select up to three answer choices
Medicare advertising has become so misleading that the Senate Finance Committee investigated the practices. That inquiry found evidence that “beneficiaries are inundated with aggressive marketing tactics as well as false and misleading information.” As a result, the Centers for Medicare & Medicaid Services (CMS) enacted a new rule this year designed to “hold health insurance companies to higher standards…by cracking down on misleading marketing schemes.”
These measures should clarify matters, but eligible Americans shouldn't be relying on marketers for their information in the first place.
Scott R. Maibor, LIA, Licensed Insurance Advisor and Managing Director at Senior Benefits Boston, advises enrollees to turn to unbiased information sources like the Medicare.gov website to compare their current coverage with recommendations for the coming year. “If you are uncomfortable doing it alone, get help from a Medicare volunteer or advisor trained to evaluate your needs and compare plans,” Maibor added.
Thankfully, most Americans 65+ already take this advice. More than half of respondents cited the government’s website as the most trustworthy source for Medicare coverage information.
Recommendations from friends and family proved the second most reliable source. While first-hand experience from confidants can be helpful, any word-of-mouth advice should also be confirmed by a medical or coverage authority.
When seeking definitive Medicare info, David Walls of D&D Insurance LLC says, “Get a professional! If an insurance broker does their job correctly, the decision should be easy-to-understand, stress-free, and not too time-consuming.” It’s important to note that unaffiliated insurance brokers differ from insurance companies or agents representing a single interest.
After being inundated with Medicare information from ad campaigns, many people consult their acquaintances, doctors, and industry insiders. Then, many enrollees do their own homework to make the final decision on Medicare coverage.The average American 65+ invested nine hours of research and analysis before finalizing their insurance coverage.
| Which of these were most influential in helping you choose your Medicare coverage? Select up to three. | Percent of Medicare beneficiaries |
|---|---|
| Comparing plan options myself | 52% |
| Medicare website | 32% |
| Spouse, family member, or caregiver helped with the selection | 19% |
| Friend or family recommendation | 18% |
| Doctor or other medical professional | 13% |
| Financial advisor | 11% |
| Help/assistance phone lines | 11% |
| Insurer advertisements or mailers | 11% |
Finally deciding on the best Medicare plan is a relief but should never be considered a final answer. Enrollees need to remain apprised of changes in the law, their insurance coverage, and their health each year.
Terri Swanson, president of Aetna Medicare, said, “Consumers can become comfortable with their plans and may not realize that benefits can change yearly or that they might qualify for additional benefits. It’s important to take some time each year to review your plan options to ensure your plan meets your unique and changing needs as you age.”
Beneficiaries should review the Annual Notice of Changes sent out for every plan and check in with annual government reports detailing updates in Medicare regulations.
This year’s most notable revisions include reduced prescription prices and capped insulin costs (courtesy of the Inflation Reduction Act), expanded mental health outpatient services and chronic pain treatment, elimination of some catastrophic coverage prescription copayments, and free recommended vaccinations.
Conclusion
Medicare coverage provides invaluable protection against medical expenses to Americans 65 and older. Unfortunately, the convoluted nature of various provisions can make it difficult for the average recipient to identify an optimal plan.
The Annual Enrollment Period provides a yearly opportunity for enrollees to alter their coverage. Finding a plan that best fits one’s medical and financial needs can improve quality of life and facilitate better healthcare decisions. Unfortunately, a morass of misleading marketing materials may muddy the Medicare waters.
Vigilant Americans will rely on trusted government sources and unbiased professionals to empower themselves with accurate information. Armed with that knowledge, they can use the AEP to adjust coverage (or renew their current coverage with confidence).
Only 43 percent of enrollees will review their coverage this year, and less than 10 percent will change coverage. Hopefully, our readers will take the time and use our resources to ensure they have made the right choices.
Our Data
In September 2023, TheSeniorList.com conducted an online poll of 1,015 Americans aged 65 or older. Responses were weighted to balance the proportion of men to women in this age group according to the 2020 U.S. Census (45% men and 55% women). Among our respondents, 27% were enrolled in Medicare Advantage only, 18% had Medicare Advantage and another type of coverage, 18% had no Medicare whatsoever, 27% had Original Medicare plus another type of coverage, and 9% had Original Medicare plus a Medigap plan. Another 18% were enrolled in Medicaid. The median household income of study participants was between $50,000 and $74,999 annually.
