Medicare Advantage member satisfaction on the decline

The Medicare Advantage program has undergone significant policy changes during the past year, affecting deductibles, out-of-pocket costs, provider networks and prior authorization determinations.

These changes have contributed to increased confusion, lower member satisfaction and a widespread lack of trust among Medicare Advantage plan members, according to the J.D. Power 2025 U.S. Medicare Advantage Study.

Overall customer satisfaction with Medicare Advantage plans is 623 (on a 1,000-point scale), down 29 points from a year ago. The primary cause of this decline in customer satisfaction, said analysts, is a 39-point drop in members’ overall level of trust in their Medicare Advantage plan.

Products and coverage, and ease of doing business were other metrics that are on the decline.

Analysts said that some of the profitability challenges confronting Medicare Advantage plans are due to factors that are within their ability to control and address.

“Top-performing plans that invest in robust new-member onboarding, increased transparency, new digital tools, broader networks and social support services are proving that they are better equipped to maintain member trust and satisfaction – even in a volatile environment,” said Christopher Lis, managing director of global healthcare intelligence at J.D. Power. “These digital tools in particular can help drive increased personalization, automated and more consistent onboarding and increased transparency with real-time updates that members need.”

WHAT’S THE IMPACT

One key criteria that separates the highest-performing Medicare Advantage plans from the lowest-performing plans is the ability to engage with members via digital channels, analysis said. Digital satisfaction among members of the highest-performing plans is 98 points higher, on average, than among those of the lowest-performing health plans.

What’s more, 85% of members of high-performing plans have used their member portal (as opposed to 76% of low-performing plans), and 52% of members of high-performing plans find the features or tools offered on their plan’s website very easy to use (versus 40% of low-performing plans).

When new members join a Medicare Advantage plan, the numbers suggest their first year often comes with confusion, unmet expectations and administrative challenges. Only 38% of first-year members say their insurer fulfills their service expectations, and that number rises to 45% among established members, or those who have been with the same plan for more than one year.

Common challenges cited by new members include explanation of benefits, how to find in-network doctors, deductibles, prior authorizations and usage of their Health Savings Account or Health Retirement Account.

THE LARGER TREND

Recent quarterly reports from the large insurers show Medicare Advantage profitability is on the decline. The headwinds, executives said during recent earnings calls, have been due to greater than expected utilization of benefits and lower than expected reimbursement from the government. 

One exception was Humana. While earnings fell short of expectations, the company reported higher than expected revenue in the second quarter. This was driven primarily by the CenterWell Pharmacy. Humana is expected to lose up to 500,000 MA members by the end of 2025 as it continues to exit plans and geographic markets that are not profitable. 

Adding to MA's margin challenges are providers who are making the decision to cut their ties with MA plans, rather than deal with delays in prior authorization and claims payments.

Despite that, the highest gross margins among insurers come from Medicare Advantage, which boasted gross margins per enrollee of $1,982 on average by the end of 2023, compared to $1,048 in the individual market, according to a recent KFF analysis of insurers' financial performance.

When KFF examined gross margin trends in Medicare Advantage last year, it found that while MA margins reverted back to pre-pandemic levels in 2021, those margins were still double those seen in other markets.