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Beneficiaries' lack of Medicare knowledge could lead to dissatisfaction in plans

Survey results indicate a need for people to become better informed about their coverage, which is both a challenge and an opportunity for insurers.

More than two-thirds of Medicare beneficiaries find their insurance confusing and difficult to understand, according to a recent survey by MedicareAdvantage.com, which also revealed that many don't grasp basic insurance terminology.

The study sample included 1,000 respondents enrolled in Medicare and took place from August 17 to 19. Participants were quizzed about topics ranging from Medicare enrollment and benefits to insurance terms and definitions.

Less than half of the respondents could correctly define deductible or coinsurance. Just over half (52%) could describe what a premium is.

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When it came to cost-related questions, the respondents didn't fare much better. More than 85% thought that Medicare Part A deductibles were annual, when in reality they operate on a cycle of "benefit periods."

About 70% of respondents falsely said that the Centers for Medicare and Medicaid Services will send a notice when it's time to enroll and that Medicare Part A and Part B have yearly out-of-pocket spending limits.

On a brighter note, over half (54%) knew that they can enroll late in Part B, but a late-enrollment penalty may be applied for every month in the plan. And more than three quarters knew that they must pay the Part B premium every month, even if they don't end up using it.

COVID-19 highlighted how little beneficiaries know about their Medicare plans. Only 14% knew that Medicare would cover six COVID-19-related services, including lab tests, a vaccine, medically necessary hospitalizations, telehealth for mental health counseling and preventative health screenings, and virtual visits with physical therapists.

Despite their overall lack of knowledge of Medicare, respondents were confident in their coverage decisions. Over three quarters said they are enrolled in the best Medicare coverage options for their healthcare needs and budget, and more than 80% said their Medicare benefits are worth the time and effort needed to enroll in and use the coverage.

WHAT'S THE IMPACT?

The overall misunderstanding of Medicare insurance could lead to unnecessarily high out-of-pocket costs, poor healthcare choices and diminished overall health among beneficiaries, according to the study's author, Christian Worstell.

The results also indicate a need for people to become better informed about their coverage, which is both a challenge and an opportunity for insurers.

"In the Medicare space, the fact that many customers are unaware of the out-of-pocket costs and coverage gaps associated with Medicare means that insurance carriers have every incentive to educate beneficiaries of those costs and gaps, especially if the private Medicare plans they offer can help fill some of those needs," Worstell told Healthcare Finance News.

Further, when members are uneducated about their plans, it might lead to high unexpected medical bills or necessary services that aren't covered.

"This can lead to dissatisfaction with their insurance plan, which carriers surely want to avoid," Worstell said. "If insurers can clearly explain to beneficiaries the ways their coverage works and saves them money, they may have a better chance of retaining them as customers."

THE LARGER TREND

Research from as early as the 1980s has revealed a knowledge gap in Medicare beneficiaries' knowledge about their health insurance.

CMS has created initiatives to help people gain an understanding over the years, including the "Medicare & You" handbook and the Medicare website.

Still, this most recent survey indicates that the knowledge gap continues to persist, which could present an obstacle for the upcoming Medicare Annual Enrollment Period in October.

ON THE RECORD

"And when you consider that over 62.6 million Americans are enrolled in Medicare, there could be as many as 43 million seniors – including your parents, your grandparents, or even yourself – who fail to receive the best care for their needs simply by not fully understanding their own coverage," Worstell said in the study.

Twitter: @HackettMallory
Email the writer: mhackett@himss.org