A new survey released by Medicare Advantage.com prior to the Annual Election Period finds a widespread lack of knowledge among beneficiaries about Medicare enrollment and basic health insurance terms.

The Medicare Literacy Survey, which was conducted September 28 through October 7 using a pool of 1,087 Medicare beneficiaries, finds many seniors don’t understand the program. Among the key findings:

  • Three out of four Medicare beneficiaries describe the program as “confusing and difficult to understand.”
  • Four out of five beneficiaries do not know the earliest date that one may sign up for Medicare.
  • Large majorities of beneficiaries are unable to define basic Medicare terms, despite a self-reported extreme confidence in their ability to do so.
  • High percentages of beneficiaries are unaware that Medicare covers certain services, or they incorrectly believe it covers others. 

Confusion about the program appears to begin with a lack of understanding about basic health insurance terms, according to survey authors. More than half of beneficiaries were unable to correctly define a premium, a deductible, or coinsurance. Most beneficiaries could not correctly identify other aspects of Medicare, including the Medicare Part A deductible and how it works, Medicare excess charges, and the lack of out-of-pocket spending limits. 

Nearly a quarter of the beneficiaries surveyed were unaware that certain health care providers can charge patients more than the Medicare-approved amount for their services. Lack of awareness about these out-of-pocket costs could leave some beneficiaries vulnerable to potentially high health care costs and "surprise" medical bills. 

Furthermore, many Medicare beneficiaries don’t have a solid understanding of the benefits available to them. The survey found that more than one in four beneficiaries incorrectly believed that original Medicare covers prescription drugs, while a significant percentage of beneficiaries wrongly believe original Medicare covers prescription glasses and contact lenses (22 percent), insulin pens or syringes (27 percent), routine dental care (25 percent), and all costs of ambulance transportation (28 percent).  

An even higher percentage incorrectly think that Medicare does not cover services like an annual wellness visit (62 percent), medically necessary walkers and wheelchairs (68 percent), hospice care (66 percent), flu shots (60 percent), and mental health care (59 percent).  

More than a third of beneficiaries did not know Medicare would cover COVID-19 hospitalizations or COVID-19 lab tests. And between 53 percent and 83 percent didn’t know Medicare covered certain virtual telehealth services that can be critical during a pandemic.