Many consumers choose Medicare Advantage (MA) plans for the wider breadth of benefits, while others choose traditional Medicare for more choice in providers, a new report showed.

The Commonwealth Fund survey was released Monday, two days after the beginning of open enrollment for Medicare. It analyzed responses from 1,605 adults aged 65 years and older who were enrolled in Medicare.

When asked why they chose MA plans, 24% of respondents said more benefits and 20% said the limit on out-of-pocket costs. Other reasons included being recommended by trusted people (15%) and the plan being offered by their or their partner’s former employer (11%).

For traditional Medicare beneficiaries, 40% said they chose that plan because they have more options on doctors, hospitals and providers. The second most common reason was being recommended by trusted people (9%) and the third was continuing coverage from an employer (7%).

“On the one hand, Medicare Advantage plans typically provide some coverage for benefits not included in traditional Medicare, such as eyeglasses,” the report stated. “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 healthcare provider that accepts Medicare, without the need for prior approval.”

Many Medicare beneficiaries did not receive help in choosing a plan: 45% of traditional Medicare enrollees and 37% of MA enrollees had no assistance. Those who did receive assistance, however, most frequently received it from brokers, at about 30% for both. Another 14% of traditional Medicare enrollees and 20% of MA enrollees made decisions based on friends and families’ advice. 

The Medicare hotline and Medicare.gov were found less influential in people’s decisions, as well as advertisements and state health insurance assistance programs (SHIPs). This is a bit worrisome, as it shows that many beneficiaries may not be aware of these more unbiased information sources, the report stated.

“Brokers and agents are paid commissions by insurers, which can influence the kind of information they provide,” the report said. “While government-funded SHIPs are designed to provide unbiased, one-on-one help, these programs remain underutilized. That’s perhaps because they rely heavily on volunteers, and because their staff lack the capacity that brokers and agents have to reach beneficiaries, many of whom may not be aware of SHIPs. The relatively low percentage of respondents who used Medicare.gov or the Medicare hotline also raises questions about whether these resources are known to beneficiaries and are meeting their needs.”

Despite the lack of reliance on advertisements, complaints about misleading or false marketing for Medicare plans increased almost twofold between 2020 and 2021. About 6% of all respondents said they used marketing to choose plans. But when broken down by race, 12% of Black respondents said they relied on advertisements compared to 5% of White respondents. This was also true for 12% of low-income respondents, compared to 2% of high-income respondents.

With Medicare Advantage enrollment increasingly becoming more popular, the report said it’s essential for healthcare players to understand why members choose certain plans.

“It’s important to learn how these sources inform beneficiaries, whether they are equitably accessible, and what kinds of services and information are needed to fill any gaps,” the researchers stated. “Regardless of where beneficiaries get information for making their coverage decisions, having accurate, easy-to-use tools would help them evaluate their options.”

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