Medicare Advantage’s Little Black Box: Where Does Your $171 Go?

Medicare Advantage markets supplemental benefits aggressively. But can anyone show whether members can access them, afford to use them, or receive meaningful value? (I have some questions)

This article began over Sunday morning coffee, while I was reading The New York Times and my 129-pound bloodhound, Grace, was snoring peacefully beside me. The more I read about Medicare Advantage supplemental benefits (Costco, Kayaks and Netflix: Medicare Advantage’s Perks Get Scrutiny), the more questions I wrote down. Questions about what plans promise, what members can actually use, and what taxpayers receive for the billions of dollars flowing into the program. Those questions eventually became this article.

At its core, healthcare is supposed to be simple: people pay into a system so they can receive care and support when they need it.

But in Medicare Advantage, the connection between promise and reality is becoming harder to see.

Private insurers receive a fixed monthly payment from the federal government for each enrollee. Healthcare plans use part of that funding to offer and market supplemental benefits—including dental, vision, hearing, transportation, meals, grocery allowances, over-the-counter products and fitness programs.

Increasingly, the list also includes lifestyle items such as exercise equipment, pickleball pa

ddles, kayaks and canoes.

These benefits are heavily promoted. They are front and center in enrollment decisions. They are part of the pitch.

But what happens when people actually try to use them?

A Benefit on Paper is Not Always a Benefit in Practice

A woman enrolls in a plan because it advertises a grocery allowance. She receives a card, but the nearest participating store is 50 miles away. When she tries to use it, many items are ineligible. The transaction fails. She is confused, then discouraged, and eventually stops trying.

On paper, she has a benefit.

In reality, she has no groceries.

A Commonwealth Fund survey found that 30% of Medicare Advantage members reported using none of their supplemental benefits during the previous year.

Applied to projected 2026 Medicare Advantage enrollment, that percentage represents an estimated 10.6 million people. This is an illustrative extrapolation, not an observed count of 2026 utilization.

Among survey respondents who used none of their supplemental benefits:

• 63% said they had not needed them

• 24% did not know what benefits their plan offered 

• 9% said the benefits were difficult to use 

• 4% said using the benefits cost too much

Only about four in 10 Medicare Advantage members reported using dental or vision benefits. Just 7% reported using a hearing benefit.

A benefit can appear generous in an enrollment brochure while remaining inaccessible, unaffordable, poorly matched to a member’s needs or too confusing to use.

That raises a deeper question: Are supplemental benefits designed around what members actually need—or around what health care plans can most easily package and market?

Who Determines What Members Actually Need?

Supplemental benefits are not consistently connected to an individualized assessment of what would provide the greatest value to each member.

A plan may offer a fitness benefit to a man with diabetes and limited mobility. But what he actually needs may be transportation to medical appointments, access to healthy food and support managing his condition at home.

Who determines whether the benefits offered address his documented risks?

Who evaluates whether he can access and use them?

Who determines whether a different benefit would provide greater value or produce a better health outcome?

The Commonwealth Fund found that 62% of Medicare Advantage members reported being asked to complete a health assessment. Yet among those who completed one, few said it resulted in a change to their care plan or access to additional services or benefits. Many did not know how the information was used.

That is not the same as a transparent, needs-based process that connects a person’s health risks, functional needs, barriers and preferences to the benefits a plan offers.

We need to know:

• What does the member actually need?

• Is the benefit appropriate for that person?

• Can the member access and afford to use it?

• Is the provider or vendor network adequate?

• Does the benefit address a documented health or social risk?

• Does it improve health, function or quality of life?

• Would another service produce a better outcome?

Without those answers, supplemental benefits can become a collection of marketable extras rather than a coordinated extension of healthcare.

Dental, Vision and Hearing are Healthcare—Not Lifestyle Perks

A man enrolls because a plan advertises dental coverage. When he needs a crown, he discovers that the annual allowance covers only a fraction of the cost. The dentists near him either do not participate or are not accepting new patients.

On paper, he has dental coverage.

In reality, he still cannot afford or access dental care.

Traditional Medicare generally does not cover routine dental, vision or hearing services. Medicare Advantage plans can offer these services as supplemental benefits, but the coverage varies considerably and may include annual limits, restricted services, cost sharing or limited provider networks.

These services depend on real provider networks.

A dental allowance has little value if no participating dentist is available.

A hearing benefit has little value if the allowance does not cover a usable hearing aid or the member cannot reach a participating audiologist.

A vision benefit has little value if the provider directory is inaccurate or no nearby provider is accepting appointments.

CMS has network-adequacy standards for specified Medicare-covered provider and facility types. However, supplemental dental, vision and hearing networks are not included in the same standardized, publicly visible time-and-distance framework that applies to the core provider specialties listed in federal Medicare Advantage network-adequacy regulations.

We still do not have clear public reporting that allows members and taxpayers to determine:

• Whether supplemental dental, vision and hearing networks are adequate

• Whether listed providers accept the coverage

• Whether providers are accepting new patients

• How far members must travel for care

• How long members wait for appointments

• How often members abandon care because they cannot find a provider

• Do members have access to culturally appropriate providers

• What percentage of the actual service cost the benefit covers

CMS requires Medicare Advantage organizations to submit certain supplemental-benefit encounter data and report spending for categories of supplemental benefits. That is progress.

But the available reporting still does not provide a complete, standardized and publicly accessible picture of benefit-level spending, member out-of-pocket costs, denied services, network usability, unmet need or health outcomes.

Utilization alone does not show whether a benefit provides meaningful coverage or whether members receive the care they need.

This leads to a more fundamental policy question:

Why are dental, vision and hearing considered supplemental benefits or lifestyle perks instead of essential components of healthcare?

Transparency Should Not Be Considered Too Expensive

When questioned, insurers have argued that more detailed reporting or individualized communication would be too expensive or administratively burdensome at scale.

According to The New York Times, the industry opposed a proposal requiring plans to send members individualized notices explaining which supplemental benefits remained unused, citing the expense involved.

Think about that.

Healthcare plans can design and advertise these benefits to millions of people. They can receive billions of dollars in federal payments. But clearly telling members what remains available and how to access it is considered too expensive.

These are companies generating billions of dollars in revenue. The argument that transparency costs too much does not hold up when the public investment and consequences for members are this significant.

This is not simply about inconvenience. It is about whether promised healthcare support reaches people.

The Financial and Access Picture Remains Incomplete

There is a deeper structural issue: no one can see the full financial and access picture.

We do not know, in a clear, standardized and publicly accessible way:

• How much insurers receive for each specific supplemental benefit

• How much they spend delivering each benefit at the individual plan level

• How much of the member’s actual cost the benefit covers

• Whether the associated provider network is adequate and usable

• How many members attempt to use a benefit but cannot complete the service

• What happens when benefits go unused

• How supplemental-benefit spending connects to individual need and outcomes

Real access also varies by plan, county, vendor network and local contracting decisions. Two people living in the same state and paying into the same public program can receive completely different benefits depending on their ZIP code and plan selection.

That is not healthcare consistency.

That is a fragmented marketplace wrapped inside a public program.

The Taxpayer Investment is Substantial

In 2026:

• Medicare Advantage is expected to cover approximately 35.2 million people.

• The federal government is projected to pay Medicare Advantage plans nearly $615 billion.

• MedPAC estimates that Medicare Advantage payments will be approximately $76 billion higher than Medicare spending would have been if comparable beneficiaries were enrolled in traditional fee-for-service Medicare.

• Average plan rebates are projected at approximately $2,660 per member annually—or about $222 each month—to fund supplemental benefits, lower cost sharing, reduce premiums and provide other coverage enhancements.

A Commonwealth Fund survey found that 30% of Medicare Advantage members reported using none of their supplemental benefits during the previous year.

Applying that survey percentage to projected 2026 enrollment produces an illustrative estimate of approximately 10.6 million people.

Multiplying that estimated population by the projected average annual rebate of $2,660 produces approximately $28 billion in annual rebate funding associated with members who reported using none of their supplemental benefits.

This is an illustrative calculation. It does not establish that insurers retained $28 billion or that every person in the estimated group received the average rebate amount.

Rebate dollars can also reduce Part A and Part B cost sharing, support Part D benefits, lower premiums and finance other coverage enhancements.

But that is exactly the accountability problem:

We cannot fully trace how the money, benefits, provider networks and members’ actual needs are connected.

This is Not Abstract Government Money. It Is Our Money.

The IRS expects approximately 164 million individual federal income-tax returns for tax year 2025.

Using that number as an illustrative denominator:

• Total Medicare Advantage payments represent approximately $3,750 for every individual federal income-tax return filed in the United States.

• The additional $76 billion that Medicare Advantage is projected to cost compared with traditional Medicare represents approximately $463 per return.

• The estimated $28 billion in rebate funding associated with members who report using none of their supplemental benefits represents approximately $171 per return.

These figures do not mean every taxpayer receives an additional Medicare Advantage bill for those amounts. Medicare is financed through multiple revenue sources, and one joint return may represent more than one taxpayer.

The calculation simply makes the scale understandable.

Every individual federal income-tax return represents the equivalent of approximately $171 going into a financial black box—a system that cannot clearly show what members received in return for that portion of the investment.

Healthcare plans market benefits to attract enrollment. Taxpayers and Medicare beneficiaries finance the program. Members choose plans expecting real support when they need it.

But without transparent reporting on spending, access, provider networks, individual need and outcomes, we cannot answer the most basic questions:

• Are these benefits improving people’s lives—or simply improving enrollment numbers?

• Are members receiving the support they need—or the benefits that are easiest to package and market?

• Would people be better served if dental, vision and hearing were included as meaningful, accountable healthcare benefits rather than offered as variable supplemental extras?

A benefit that a person cannot access, cannot afford to use or cannot find a provider to deliver is not meaningful coverage. It is a marketing promise that never becomes care.

We should be able to see whether Medicare Advantage is delivering real, individual, relevant support. 

We should be able to see what taxpayers are funding, what members can actually access, and whether those benefits result in meaningful care.

I started Sunday morning with an article and a cup of coffee. I ended it with more questions than answers.

Have you—or someone you care for—tried to use a Medicare Advantage supplemental benefit? What happened? Were they able to use the benefit? Were they able to access care?

Sources

The New York Times, “Costco, Kayaks and Netflix: Medicare Advantage’s Perks Get Scrutiny” https://www.nytimes.com/2026/08/08/business/medicare-advantage-benefits.html?smid=nytcore-ios-share

MedPAC, March 2026 Report to the Congress: Medicare Payment Policy, Chapter 12, “The Medicare Advantage Program: Status Report” https://www.medpac.gov/document/chapter-12-the-medicare-advantage-program-status-report-march-2026-report/

MedPAC, Standardized Benefits in Medicare Advantage Plans https://www.medpac.gov/wp-content/uploads/2023/06/Jun23_Ch3_MedPAC_Report_To_Congress_SEC.pdf

KFF, “Gaps in Medicare Advantage Data Remain Despite CMS Actions to Increase Transparency” https://www.kff.org/medicare/gaps-in-medicare-advantage-data-remain-despite-cms-actions-to-increase-transparency/

KFF, "Medicare Advantage in 2026" https://www.kff.org/medicare/medicare-advantage-in-2026-enrollment-update-and-key-trends/?utm_source=chatgpt.com

The Commonwealth Fund, “What Do Medicare Beneficiaries Value About Their Coverage?” https://www.commonwealthfund.org/publications/surveys/2024/feb/what-do-medicare-beneficiaries-value-about-their-coverage

The Commonwealth Fund, “How Much Do Medicare Advantage Enrollees Value and Use Their Supplemental Benefits?” https://www.commonwealthfund.org/publications/surveys/2025/feb/how-much-do-medicare-advantage-enrollees-value-use-supplemental-benefits

CMS, Submission of Supplemental Benefits Data on Medicare Advantage Encounter Data Records https://www.cms.gov/files/document/submissionofsupplementalbenefitsdataonmaencounterdatarecordsg.pdf-0

CMS, Part C and Part D Reporting Requirements https://www.cms.gov/medicare/coverage/prescription-drug-coverage-contracting/part-c-part-d-reporting-requirements

Federal Medicare Advantage Network-Adequacy Regulation, 42 C.F.R. § 422.116 https://www.ecfr.gov/current/title-42/chapter-IV/subchapter-B/part-422/subpart-C/section-422.116

IRS, “IRS Opens 2026 Filing Season” https://www.irs.gov/newsroom/irs-opens-2026-filing-season

All per-return figures and calculations applying survey results to projected enrollment are illustrative estimates. They are intended to explain the scale of public spending, not to represent literal, equally divided tax bills or observed utilization among every 2026 Medicare Advantage enrollee.