Join Us Live for a Discussion on Medicare, Democracy, and the Future of Health Care
The Beneficiary Experience: The Costs of Medicare Advantage
Medicare is becoming more costly and beneficiaries are increasingly struggling to afford care. In 2023, 41% of callers to the Medicare Rights national helpline had questions about affording various Medicare costs, nearly double the percentage of callers who were primarily concerned about costs in 2012. With 54% of eligible beneficiaries enrolled in Medicare Advantage (MA) in 2025, with projections indicating this number will continue to grow, reducing MA costs and overhauling its financial structure are key to making Medicare sustainable.
Medicare Advantage Marketing and Compensation
The three new briefs in our Medicare Sustainability series examine how MA plans can overpromise and underdeliver in order to drive up enrollment and compensation to MA organizations. During a time when Medicare costs are rising while coverage gaps remain, people are motivated to find the plan that offers the most benefits and savings. Using agents and brokers who receive commissions for enrolling beneficiaries, MA plans aggressively market supplemental benefits and attractive incentives. Increased enrollment results in increased compensation for plans and third parties, which increases funding for additional benefits and marketing. Combined with MA organizations’ strategy to flood the market with similar plans and make it more difficult for people to switch or leave their plan—discussed earlier in the Medicare Sustainability series—the payment structure of MA creates an ever-increasing cycle of overspending.
The payment structure of MA creates an ever-increasing cycle of overspending.
While federal cost-saving options like Medicare Savings Programs and the Part D Low-Income Subsidy remain underused due to notoriously difficult enrollment processes, MA organizations and third-party marketing organizations steer beneficiaries toward MA plans with benefits that claim to save them money. As a result, beneficiaries are pushed to enroll in plans that may not meet their care needs and don’t deliver the cost assistance they promise, while brokers, agents, and third-party marketers reap commissions.
Beneficiary Experiences from the Helpline
This unsustainable incentive structure and overpayment cycle of MA have real impacts on beneficiaries’ care. The new Medicare Sustainability briefs include real stories from callers to the Medicare Rights national helpline who were misled by MA marketing and steered by biased sources to act against their best interests.
These include people who were misled by marketers and enrolled in new MA plans without being given the chance to make a fully informed choice. These beneficiaries found themselves locked out of previous plans that had worked well for them.
Mr. CG was in an MA plan. A sales representative told Mr. CG that he could “fix his problems” while not switching his plan. Mr. CG was disenrolled from his plan and enrolled in a new plan. He tried to switch back to his old plan but is now in a different plan than his previous first-choice plan.
Some people enrolled in MA plans after being promised large discounts or cash-like benefits, only to find the benefits delayed or inaccessible and the new plan unfit for their health needs.
Ms. BC, who is dually eligible, enrolled in an MA plan in order to access a $250 credit that could be used for OTC or utilities. After enrolling, she learned that she would only be eligible for $193. She attempted to apply the credit to her electric bill. The plan claimed the transaction was complete, but the electric company never received payment. Ms. BC attempted to apply the credit to other bills and was told that those utility companies were not participating with the program.
Many callers enrolled in an MA plan for dental, vision, or hearing coverage, which aim to fill Original Medicare’s significant coverage gaps in those areas. But when they try to receive care, they run into policy restrictions and insufficient coverage.
Ms. NG, who is dually eligible, got a letter from her MA plan approving coverage of two crowns to follow two root canals that had already been done. After receiving one of the crowns, Ms. NG got another letter from the plan denying coverage for both crowns.
Mr. CL, who is dually eligible, has an MA plan. He received an eye exam which his case manager said was covered. Then he started receiving denial letters that this case manager said were in error.
Needed Policy Reforms
Making Medicare Advantage sustainable requires breaking the overpayment cycle and fixing the conditions that allowed it to exist. This means limiting payments to MA organizations, standardizing and regulating MA plans, and expanding Original Medicare’s protections and benefits.
Making Medicare Advantage sustainable requires breaking the overpayment cycle and fixing the conditions that allowed it to exist.
The current system rewards MA organizations for funneling money into marketing that drives enrollment, often against beneficiaries’ best interest. Correcting the rules for MA compensation and removing avenues of overpayment could stabilize the MA market and the financial outlook of the Medicare program.
Ultimately, the MA overpayment cycle exploits Medicare’s existing coverage gaps and inaccessibility. Standardizing MA plans’ offerings and making information about plans readily available could empower people to make independent and informed enrollment decisions without steering from third-party actors. Large-scale reform that equalizes coverage and cost protections between MA and Original Medicare will remove a key incentive driving MA marketing, uprooting the unsustainable structure.
Read the new Medicare Sustainability briefs.
Show Comments
We welcome thoughtful, respectful discussion on our website. To maintain a safe and constructive environment, comments that include profanity or violent, threatening language will be hidden. We may ban commentors who repeatedly cross these guidelines.
Help Us Protect & Strengthen Medicare
Donate today and make a lasting impact
More than 67 million people rely on Medicare—but many still face barriers to the care they need. With your support, we provide free, unbiased help to people navigating Medicare and work across the country with federal and state advocates to protect Medicare’s future and address the needs of those it serves.
The Latest
Most Read
Add Medicare to Your Inbox
Sign up to receive Medicare news, policy developments, and other useful updates from the Medicare Rights.
Follow Us on Bluesky
One Comment on “The Beneficiary Experience: The Costs of Medicare Advantage”
Jim
December 23, 2025 at 11:24 amWhen I retired in 2025 my company and Union provided me an Advantage PPO from Humana, Always having a PPO I signed up with it! It has a low out of pocket max 1600 10% coinsurance in network. Works like my PPO while I was working. Knowing I have to pay possible deductibles, I have 3 times my out of pocket max in a High interest savings account, along with a $100.00 a month each month ! Just like I did when I was working. It has grown and I have paid a few minor deductible’s like dental, and regular DR labs ect. However I keep hearing horror stories of Advantage plan’s . Mine don’t change during the 3 year contract period. No past Retirees have complained about it ! I feel comfortable with it feel well prepared! Then Again I have not used it for anything major! So I really don’t know. From some of the things I have read it makes me feel like I have been robed of some benefits! My Dad is on gap. He is 92 and his gap is so expensive I help him pay for it. His pension has reduced some over the years and social security raises are inadequate for rising part B and plan cost. I’m confused as to the proper path for me. I don’t want to talk to a Salesperson about what I should do if I need to do anything ! So far never been sick enough to see how good it works!