Supplemental Medicare benefits still leave dental, vision, and hearing care out of reach for many

Lower-income adults with Medicare Advantage plans are more likely to have difficulty paying for dental, vision, and hearing services than higher-income beneficiaries—despite enrolling in plans that cover these benefits, according to a new study published in Health Affairs.

Medicare Advantage plans offer a private insurance alternative to traditional Medicare coverage for health insurance. The most common supplemental benefits are dental, vision, and hearing, with more than 90 percent of Medicare Advantage plans providing coverage for one or more. These supplemental benefits, which are not available through traditional Medicare, are largely funded by rebate dollars paid by the Centers for Medicare and Medicaid Services (CMS) to the private insurers. 

“The high need for dental, vision, and hearing care among Medicare recipients drives the high demand for supplemental benefits,” said Avni Gupta, a health policy researcher who recently earned her PhD in health policy and management from the NYU School of Global Public Health and is now at the Commonwealth Fund. “However, these added benefits are expensive for Medicare, which pays nearly $20 billion a year in rebates to Medicare Advantage insurers for supplemental benefits.”

An increasing number of low-income older adults are enrolling Medicare Advantage plans over traditional Medicare plans—a shift that may be driven by the supplemental benefits available in these plans. However, supplemental benefits may not provide full financial protection, as beneficiaries still face relatively high out-of-pocket costs and forego needed dental, vision, and hearing care. 

To understand whether coverage for supplemental benefits through Medicare Advantage is meeting the needs of those enrolled, the researchers analyzed nationally representative data from a 2018-19 survey of Medicare Advantage beneficiaries. They analyzed differences by income and the plans’ star ratings, a measure of quality. 

The researchers found that lower-income Medicare Advantage beneficiaries are more likely to experience cost-related barriers in accessing dental, vision, and hearing services than higher-income beneficiaries, even after adjusting for several measures of benefit generosity. Overall, nearly 11 percent of beneficiaries reported unmet dental need, 4 percent reported unmet vision need, and 2 percent reported unmet hearing need because of cost.

The researchers also found that enrolling in higher-quality Medicare Advantage plans—those with the highest star ratings—was associated with lower unmet needs for dental services overall and for lower-income groups, meaning that higher star ratings translated to better dental coverage. This was not true for hearing and vision coverage.

However, despite CMS making higher rebate payments to Medicare Advantage plans with high star ratings, the positive impact of star ratings on dental coverage was not found to be driven by these bonus payments. 

“This raises questions about whether the higher rebate payments to highly rated Medicare Advantage plans in the form of the quality bonus payments actually improve access to the funded services for beneficiaries,” added Gupta.

The researchers note that CMS should consider measuring and monitoring the coverage, quality, and equity of supplemental benefits in order to make coverage more equitable and better link rebate payments to the value of supplemental benefits for Medicare Advantage enrollees.

“As the popularity of Medicare Advantage plans continues to increase, there is a need for more accountability and better oversight on how rebate dollars are being used to improve equitable access to supplemental benefits covering services we all use and need, such as dental, hearing, and vision care,” said José A. Pagán, a professor and chair of the Department of Public Health Policy and Management at the NYU School of Global Public Health. “Good stewardship in rebate payments means that Medicare Advantage beneficiaries should get the highest possible value as a result of financial incentives.”

In addition to Gupta and Pagán, study authors include Diana Silver of the NYU School of Global Public Health, Sherry Glied of NYU’s Robert F. Wagner Graduate School of Public Service, Kenton Johnston of Washington University in St. Louis, and David Meyers of Brown University School of Public Health.