Medicare Advantage Member Satisfaction Drops Amid Rising Costs and Digital Expectations
Customer satisfaction with Medicare Advantage (MA) plans has dropped significantly by 29 points year over year, primarily due to declining trust among members, according to J.D. Power. The MA sector, once consistently profitable, has been challenged by rising medical costs since 2023 as beneficiaries increased their utilization of healthcare services after the COVID-19 pandemic. This upward trend in medical expenses has continued into 2024, with major insurers like UnitedHealth underestimating cost trends during plan pricing, particularly within the MA segment.
In response to narrowing profit margins, key players such as Humana and CVS have exited certain markets and restructured benefits within their MA offerings. Concurrently, regulatory scrutiny has intensified around Medicare Advantage, with concerns about care restrictions for enrollees and the higher government spending associated with MA plans compared to traditional fee-for-service Medicare. A recent MedPAC report highlighted that Medicare will spend $84 billion more on MA enrollees in 2024 than if those beneficiaries remained in traditional Medicare.
The J.D. Power survey reveals that these financial and policy challenges are adversely impacting member perceptions of their plans. Significant declines were noted in satisfaction with product suitability (down 33 points) and ease of doing business (down 31 points) year over year. New MA beneficiaries express greater dissatisfaction, especially regarding network access and managing deductibles and prior authorizations, with only 38% stating their service expectations were met, compared to 45% among established members.
Digital engagement emerges as a crucial differentiator between high- and low-performing MA plans. Members of top-performing plans report satisfaction levels with digital channels that are 98 points higher on average than those in lower-ranked plans. Moreover, 85% of enrollees in high-performing plans use member portals versus 76% in low-performing plans, with better usability of online tools enhancing overall member experience.
Industry experts indicate that investments in robust onboarding processes, increased transparency, enhanced digital capabilities, broader provider networks, and social support services help maintain member trust and satisfaction amid market volatility. The integration of advanced digital tools facilitates personalized communication, automated onboarding, and real-time updates that members increasingly demand.
Overall, the Medicare Advantage market faces ongoing pressure from rising medical costs, regulatory examination, and shifting member expectations, highlighting the need for insurers to innovate and adapt to sustain satisfaction and financial performance in a complex environment.