CMS Delays Medicare Advantage Supplemental Benefit Reminder Rule Until 2026

The Centers for Medicare & Medicaid Services (CMS) has postponed the implementation of a rule requiring Medicare Advantage (MA) insurers to send midyear reminders to enrollees about unused supplemental benefits, deferring the mandate until 2026. This delay responds to industry concerns about the current inability of plans to reliably track supplemental benefit usage, citing the need for improved technology and processes to avoid sending inaccurate or misleading reminders. The original rule, intended to enhance beneficiary engagement by informing them midyear about unutilized perks such as dental care, gym memberships, and transportation assistance, was scheduled to take effect in July 2024.

Supplemental benefits in Medicare Advantage plans have become a key marketing feature, aiming to differentiate from traditional Medicare through additional perks. However, studies and surveys indicate a significant underuse of these benefits; for instance, a 2024 Commonwealth Fund survey found that 30% of MA enrollees did not use any supplemental services in the previous year. Further research published in JAMA Network Open highlights persistent barriers such as cost-sharing, administrative complexities, and lack of awareness, which hinder utilization despite broader coverage.

Medicare Advantage plans receive substantial federal funding, estimated at $67 billion above traditional Medicare spending in 2024, to support these additional benefits. The underutilization raises concerns about whether these funds are effectively enhancing beneficiary access and health outcomes or primarily increasing plan profits. CMS’s delayed rollout of reminder communications aims to balance oversight with operational feasibility, allowing plans more preparation time to implement accurate beneficiary notifications.

This development has implications for insurers, regulators, and policymakers focused on maximizing the value of Medicare Advantage supplemental benefits. Improved beneficiary engagement through timely notifications could drive better utilization rates, aligning spending with intended patient services. However, technical and administrative challenges remain significant hurdles in achieving this goal. The 2026 implementation timeline provides a window for MA plans to refine their data tracking and communication systems to comply with forthcoming regulatory expectations.