For the more than 32 million Americans enrolled in Medicare Advantage plans, supplemental benefits are an attractive incentive. They are designed to help members live healthier lives by expanding access to health-related services and addressing social determinants of health. However, whether members use these benefits, and the effectiveness of the benefit in improving health outcomes and lowering healthcare costs, is another issue.
Earlier this year, the Centers for Medicare and Medicaid Services announced changes to guidelines on supplemental benefits to ensure that taxpayer dollars are deployed responsibly and that health plans are meeting the needs and the preferences of their members. In 2026, plans will be required to send a mid-year notification to each enrollee of unused supplemental benefits, which may increase pressure on health plans and supplemental benefits providers to drive sustained engagement and more detailed reporting. As plans also navigate changes to payment methodology and an increase in medical costs by seniors, supplemental benefits with utilization-based business models that can demonstrate proven outcomes will emerge as the best partners to support health plans in this environment.
Here are a few questions to consider:
Navigating the future of Medicare Advantage supplemental benefits
Hill Ferguson is the president and CEO of Tivity Health.
Improving health outcomes should be the foundation of all supplemental benefits, but demonstrating ROI takes time and commitment. In addition, the correlation between some benefits and health improvement is more difficult to track. But for providers of the most popular and widely utilized supplemental benefits, such as vision, dental and fitness, having outcomes data is critical, and should guide plan decisions on benefit design.
Physical activity is not only proven to help prevent and manage chronic disease, adults 65 and older reap additional benefits, such as reduced risk of falling, more years of independent living, and improved brain health. Offering a fitness benefit as part of a Medical Advantage plan helps remove many of the barriers that may prevent an older adult from being active.
Regular exercise can help boost strength, stability, flexibility, cardiovascular function and mental health, which can have a direct correlation with lower healthcare costs. Individuals not participating in a fitness program who experience medical events, such as a fall, become less likely to have repeat incidents after they begin participating in a fitness program.
At Tivity Health, we know physical activity improves health, but we also prioritize demonstrating the link between SilverSneakers, offered to more than 19 million Medicare Advantage, Medicare Supplement and group retiree plan members, and health outcomes. In a comprehensive study Avalere Health conducted in 2021, total average healthcare expenses for SilverSneakers® participants were reduced by 16% compared to non-participating Medicare Advantage members, illustrating that SilverSneakers generates positive health outcomes and reduces costs.
Demonstrating that our program works is part of our responsibility to our health plans, our members and to the taxpayers who fund Medicare Advantage.
New CMS guidelines reflect a concern that many supplemental benefits aren’t being utilized and underscore the importance of engaging beneficiaries in proven programs. In 2026, plans will be required to send a mid-year notification to each enrollee notifying them of unused supplemental benefits. To improve health outcomes, it is imperative that supplemental benefits providers have a business model that drives utilization.
Simply put, supplemental benefits can’t improve health if they aren’t being used. Traditional PMPM models, which reimburse a fixed fee per patient per month, can discourage utilization because incentives are misaligned – the supplemental benefits provider is not incentivized to increase utilization. A utilization-based business model that is accountable for driving participation and demonstrating positive health outcomes is a more sustainable model, aligned with CMS expectations. This model prioritizes sustained a targeted engagement strategies focused on long-term behavior change.
At Tivity Health, driving and tracking utilization has always been foundational to our business model, and it is important to note that fitness is one of the most frequently utilized supplemental benefits. In a recent Senior Healthy Living Survey, beneficiaries cited vision, dental and fitness as the supplemental benefits they value and utilize most. For some of our health plan partners, 50% of members have engaged with SilverSneakers.
For some supplemental benefit providers, adapting to reporting requirements will pose a significant challenge, and these new guidelines will likely influence how health plans evaluate their benefits package. Plans should seek out supplemental benefits providers that have demonstrated experience tracking utilization and outcomes. Those with a history of adapting to the evolving needs of clients and members as well as policy or regulatory changes are better prepared to manage these new expectations.
Seasoned supplemental benefit providers understand the challenges plans are facing and can work with them to maintain the best possible outcomes for members while protecting the future of Medicare Advantage.
With the Medicare annual enrollment period fast approaching, the impact of the changing Medicare Advantage environment on members will begin to materialize. Seniors are a savvy consumer audience, and their definition of health is expanding to a more holistic description. Member feedback is critical for supplemental benefits providers and health plans to ensure that the benefits that are most important to them continue to be available.
SilverSneakers has been around for more than 30 years, and we regularly gather member insights through an “always on” approach that tracks the lifestyles, demands and preferences of the senior population. In a 2024 survey, 93% of respondents expressed satisfaction with both the SilverSneakers Fitness Program and their health plan. Sixty-one percent indicated that SilverSneakers was very important in their decision to join their health plan, and more than half (57%) said they would likely switch to another health plan if SilverSneakers were no longer offered.
The bottom line is, it is more important than ever that supplemental benefit providers have the capabilities, data and commitment to measurable health improvement needed to thrive in today’s Medicare Advantage environment. Those who are already aligned with CMS’ expectations will help make this transition easier for health plans and most importantly, for the members we all support.
Hill Ferguson is the president and CEO of Tivity Health, which offers SilverSneakers, the leading fitness program for older adults, as a supplemental benefit to health plans nationwide. He has over 20 years of experience leading innovative companies in health care and financial services including serving as CEO at Doctor On Demand and Chief Product Officer at PayPal. He currently serves on the board at Concert Health. Ferguson holds a bachelor’s degree and an MBA from Vanderbilt University.
Tivity Health® is a leading provider of healthy life-changing solutions that reduce costs and create healthier communities, including SilverSneakers®, Burnalong®, Prime® Fitness and WholeHealth Living®. Tivity helps adults improve their health through in-person and virtual physical activity and condition-specific programming delivered via an insights-driven, personalized, interactive experience. www.tivityhealth.com