CMS Proposes Cancelling Rule on Unused Medicare Advantage Supplemental Benefits Alerts

The Centers for Medicare and Medicaid Services (CMS) proposed vacating a rule that would have required Medicare Advantage plans to notify their enrollees about unused supplemental benefits. Medicare Advantage plans offer extra benefits such as dental, hearing, vision care, gym memberships, and over-the-counter medication allowances, which are often highlighted in marketing efforts to attract subscribers. However, studies from the Commonwealth Fund reveal low utilization rates of these supplemental benefits, with three in ten beneficiaries not using any in the past year. Less than half of enrollees used common benefits like dental and vision, while fewer used hearing and grocery allowances. Despite CMS spending $39 billion in 2025 to provide these benefits, unused funds remain with insurers. Barriers to utilization include lack of awareness, complexity in accessing benefits, administrative hurdles, and limited coverage scope. Surveys indicate many beneficiaries are unaware of all benefits or how to use them, and some report not needing certain benefits. Medicare Advantage plans can be confusing, with unclear coverage parameters, especially in dental and vision benefits, where significant treatments are often excluded or require higher premiums. Medicare Advantage continues to grow in popularity, covering over half of eligible beneficiaries since 2023. It offers advantages beyond supplemental benefits such as integrated coverage, out-of-pocket spending limits, and simplified management compared to traditional Medicare plans plus separate Part D coverage. However, these plans come at a higher federal cost, with payments about 20% more per enrollee, translating to an $84 billion increase in federal spending in 2025. The annual Medicare enrollment period concludes in early December, with additional open enrollment for Medicare Advantage plans extending into March, creating time pressure for beneficiaries to review and utilize their benefits. Despite 80% of enrollees expressing a desire to receive notifications about unused benefits, CMS postponed and then proposed canceling the notification rule, citing administrative challenges raised by insurers. Experts doubt that notification alone would significantly change beneficiary behavior, suggesting it might be lost among other routine mailings. The core appeal of Medicare Advantage lies in features like one-stop shopping and predictable cost-sharing rather than supplemental benefits alone. This situation highlights ongoing challenges in beneficiary education, plan transparency, and administrative complexities in maximizing the use of supplemental benefits under Medicare Advantage programs.