Medicare Advantage (MA) enrollment continues to surge in the U.S., as insurers attract seniors with bundled perks and out-of-pocket savings. But new research indicates that many of these widely advertised benefits go largely unused, prompting fresh debate over whether the plans deliver the value they promise. With healthcare spending trends influencing public budgets, insurers’ earnings, and broader market sentiment, the findings could reshape how investors view the fast-growing MA segment.

Seniors are offered more benefits — but often don’t access them

The study, published by a leading U.S. health-policy institute, found that a substantial share of seniors enrolled in Medicare Advantage do not use supplemental benefits, even when those perks are core to the plans’ marketing. Popular offerings such as dental coverage, vision exams, meal support, and transportation were frequently cited as underutilized. Analysts attribute the gap to factors such as lack of awareness, complex eligibility rules, and limited provider availability.

The underuse raises important questions about the true value proposition of MA plans, which now cover more than half of all U.S. Medicare beneficiaries. If seniors are paying premiums or selecting plans based on benefits they never use, regulators may challenge the structure or transparency of supplemental offerings. For insurers, unused perks reduce costs, but they also risk reputational scrutiny — particularly as U.S. policymakers monitor the sector’s rapid expansion and rising subsidy levels.

Financial and market implications for major insurers

Medicare Advantage is a lucrative business line for large insurers, including UnitedHealth Group, Humana, CVS/Aetna, and Elevance Health. Supplemental benefits play a key role in differentiating plans amid intense competition during annual enrollment periods. However, the new findings suggest that some benefits may function more as marketing tools than as utilized services — a dynamic that could influence actuarial pricing, reimbursement assumptions, and regulatory expectations.

From a market perspective, MA profitability has become a central focus for healthcare investors. While unused benefits lower claims expenses, any regulatory push to standardize or audit supplemental offerings could increase compliance costs. Equity analysts are also watching for potential reforms in the Centers for Medicare & Medicaid Services (CMS) risk-adjustment framework, which influences how much revenue plans generate per enrollee. For global investors, including institutions in Israel with exposure to large U.S. health insurers, the study adds a layer of caution around the sustainability of recent MA-driven earnings growth.

Implications for public budgets and the broader healthcare ecosystem

Beyond private insurers, Medicare Advantage trends have material implications for public spending. Federal Medicare outlays have been rising steadily, and critics argue that MA plans receive higher payments than traditional Medicare on a risk-adjusted basis. If seniors underuse supplemental benefits, policymakers may scrutinize whether taxpayer funds are being efficiently allocated.

Hospitals, physician groups, and specialized service providers also face downstream effects. Many supplemental benefits rely on coordinated-care networks; underutilization may signal inefficiencies that prevent seniors from receiving preventive or supportive services that could reduce long-term healthcare costs. These dynamics could influence debates about care delivery models and reimbursement strategies heading into the next U.S. election cycle.

Looking forward, investors and policymakers will monitor whether insurers enhance communication, simplify eligibility requirements, or redesign benefits to boost utilization. CMS may also incorporate new reporting standards to verify the effectiveness of supplemental perks. As the Medicare Advantage market moves toward its next phase of growth, the balance between competitive marketing and genuine service delivery will play a decisive role in shaping regulatory policy, insurer profitability, and the overall value delivered to America’s aging population.