While many individuals believe they have a firm grasp on their Medicare benefits, the reality is far different, according to a new survey.
Insurance agency eHealth conducted a survey of 1,000 Americans and found that 89% of beneficiaries feel "confident" that they understand their Medicare benefits and coverage options. However, just 13% could identify each of the main facets of Medicare, such as the traditional program, Medicare Advantage, Part D and Medicare supplement plans.
In addition, most (88%) said they did not know there is no annual cap on out-of-pocket spending in traditional Medicare, while 82% of those nearing Medicare eligibility said they were not aware that there is a 20% coinsurance for medical services.
Close to half (42%) of beneficiaries were unaware or underestimated that 20% coinsurance, according to the report.
“The new survey shows that consumer confidence doesn’t always translate into actual understanding,” said Derrick Duke, CEO of eHealth, in a press release. “Enrolling in Medicare isn't just about selecting a health plan — it's about understanding how different coverage options affect your access to healthcare and financial security."
"Our survey shows many Americans are making those decisions without fully understanding how their various Medicare coverage options work, or the potential tradeoffs of each one," Duke continued.
Among the 89% of beneficiaries who said they were confident in their understanding of Medicare, 43% characterized themselves as "very confident" and 46% said they were confident. Fewer than half (42%) could correctly define the traditional Medicare program.
The survey also found that 44% of beneficiaries could accurately describe Part D, while 45% could correctly define Medicare Advantage and Medicare supplement plans.
Confidence was far lower among those who were soon eligible for Medicare, defined in this study as between the ages of 55 and 64. Just 24% said they were confident about their coverage options.
This group was also largely unaware of the potential enrollment deadlines associated with Medicare. For example, 88% did not know that there is a 10% penalty that could be added to their Part B premiums for each 12-month window where they were eligible but did not enroll.
Plus, 80% also said they did not realize they could incur a penalty for delayed Part D enrollment, and 71% said they did not know there was a similar penalty for delayed enrollment in Medicare supplement plans.