Medicare Advantage unused benefit reminder letters delayed until 2026

Federal Medicare overseers were poised this year to require Medicare Advantage insurers to send midyear reminders to enrollees who have not used the supplemental benefits included in their plan.

But the rule requiring those reminders, originally scheduled to land in mailboxes sometime in July, was delayed until 2026 to give insurers more time to prepare.

The federal Centers for Medicare & Medicaid Services cited industry feedback that plans lacked the ability to track supplemental benefit use reliably. Without time to upgrade technology and processes, the agency said, plans could end up sending reminders that are incomplete, outdated or misleading.

While some insurers asked the Medicare program to delay the policy until 2027, the agency wrote that starting in 2026 would give Advantage plan sponsors enough time to plan and implement the notices.

Medicare Advantage plans often tout supplemental benefits, such as dental care, gym memberships, over-the-counter allowances, or transportation assistance, but many beneficiaries don’t fully understand or take advantage of these perks. That’s why the government in 2024 announced plans to require insurers to send out notifications when extras go unused in the first six months of the year. These reminders were scheduled to arrive by mail between June 30 and July 31, complete with instructions on how to use the benefits.

Supplemental benefits have become a cornerstone of Medicare Advantage marketing during open enrollment, with insurers heavily promoting extras to attract seniors. But watchdog groups have found that many beneficiaries never take advantage of the services.

In a 2024 Commonwealth Fund survey, three in ten Medicare Advantage enrollees reported using no supplemental benefits in the last year.

Other research suggests enrollment in Medicare Advantage, despite broader coverage, doesn’t necessarily translate into higher use of these services compared to traditional Medicare.

A study published in JAMA Network Open in January found that although more Medicare Advantage enrollees had coverage for supplemental services than those in traditional Medicare, they did not use them more often. Researchers concluded that barriers such as cost-sharing, paperwork and awareness may be holding people back.

The underuse is striking given the resources dedicated to these benefits. In 2024, Medicare Advantage plans received an estimated $67 billion in extra federal money on top of what traditional Medicare spends. That money is supposed to go back to beneficiaries in the form of additional perks and services rather than boost profits.

kdeleon@oregonian.com