Are taxpayers wasting $86 billion on SilverSneakers and Medicare Advantage goodies they don't use?

By Beth Pinsker

Medicare Advantage plans promote extra benefits like dental and vision coverage and gym memberships, but usage of those services is low

In an activity room at the Bay Ridge Senior Center in Brooklyn, N.Y., about 25 people sit in chairs, lifting their left legs and doing ankle circles, while a handful of others follow along on a video screen.

"Maybe it's making some noises. That's OK," says Mary Coughlin, 69, the stretch-and-tone class instructor and a physical therapist. Everyone laughs and a few people nod knowingly as pops and crackles erupt from all over the room. "It's air pockets, usually," she adds. "We want to keep our ankles strong. It keeps us from toppling over."

The crowd is mostly senior women, along with a few men, and almost everyone is a regular. As people come in late, they are greeted by name. When someone leaves early, people wave and say, "See you later." The class provides a good workout, but for some in the group, that is only one consideration. They're glad to have someplace to go and something to do.

Eric Lai, an 80-year-old who lives in the Bay Ridge neighborhood, says he comes to the senior center almost every day. After class, he hangs around in the small gym adjacent to the activity room and rides the recumbent bike. "I like the movement and the exercise," he says.

Lai is one of the senior center's SilverSneakers participants. SilverSneakers is a benefit offered by many Medicare Advantage plans that allows people to take exercise classes for free or have a gym membership at participating locations. Each time he arrives, Lai adds his name to a special sign-up sheet, and later, the center reports the participant numbers to SilverSneakers.

The center - like any gym or fitness location that is part of the program - receives payment from SilverSneakers, which in turn collects funds from the Medicare Advantage plans involved. The Centers for Medicare & Medicaid Services reimburses the Medicare Advantage plan for the administration of Medicare benefits. Taxpayers, in part, fund Medicare.

SilverSneakers is a "goodie" - an extra that draws people in. Other perks of Medicare Advantage plans might include a cash allowance for groceries or reimbursement for a portion of the Part B Medicare premium that all beneficiaries pay. Core medical ancillary benefits include dental, vision and hearing coverage, which are not covered by original Medicare.

To provide these benefits, Medicare Advantage insurers receive up to $86 billion from the federal government, according to a 2025 report from the Medicare Payment Advisory Commission - the independent agency also known as MedPAC that advises Congress about Medicare. That's up from $21 billion in 2018. The total government expenditure to Medicare Advantage for all services is between $500 billion and $600 billion, according to CMS.

All a consumer like Lai usually knows, however, is that he gets certain benefits with his Medicare Advantage plan.

"I'm very happy with my plan," Lai says, for allowing him to participate in the program.

'It's a shining star'

The stretch-and-tone class at the Bay Ridge Senior Center in Brooklyn.

What's somewhat unusual about Lai is that he regularly uses the exercise benefit. Only 19% of people with Medicare Advantage use the exercise benefit that is part of their plan, according to research by the Commonwealth Fund, a nonprofit research foundation. At the same time, 42% of Medicare Advantage enrollees take advantage of their dental coverage, while 41% use vision benefits and 7% use hearing benefits.

And yet these extra benefits - which are not offered by original Medicare or the competing Medicare supplement known as Medigap - are one of the key reasons people 65 and older say they sign up for Medicare Advantage plans, with 83% considering these benefits to be an important part of their plans, according to the study from the Commonwealth Fund.

Since the first Medicare Advantage plans were launched in 1997 (original Medicare started in 1965), insurance companies have heavily marketed their low- or no-premium plans and the extra perks that are not included in a traditional Medicare plan administered by the federal government.

Two-thirds of people 65 and older surveyed by the Commonwealth Fund said they had reported seeing additional marketing from SilverSneakers and other companies that provide supplemental benefits. The perks and promotions have helped fuel a massive industry, with Medicare Advantage plans now making up 54% of the nation's Medicare marketplace, according to health-policy group KFF. But seniors who have a low- or no-premium Medicare Advantage plan can potentially face higher costs in the form of copays and out-pocket-maximums if they get sick.

Vision, dental and hearing costs have long been problematic for seniors, because those services are not covered under traditional Medicare. People either paid out of pocket, went without these services or bought private policies to cover specific needs. There have been many legislative proposals to add these services to traditional Medicare - most recently in March 2025 - but none have been passed.

SilverSneakers, on the other hand, is a "nice to have" lifestyle extra offered with Medicare Advantage plans that was never intended to be rolled into traditional Medicare coverage. Nevertheless, it can be a huge draw for seniors who are deciding between a Medigap supplement with a monthly premium and a Medicare Advantage plan with no upfront costs and lots of extras.

"It's a shining star," says Karen Bell, a longtime insurance broker based in Rochester, N.Y. "Everyone wants it. Then some go to the gym three days a week, and others go once and never go back again. The ones who go religiously meet up with the same group every day, have coffee and shoot the baloney for an hour or two. That's what they want the most."

Big corporate money

The low usage rates of Medicare Advantage extras are a problem primarily for the taxpayers who fund the programs, but they amount to a big-money opportunity for those making profits off that $86 billion in government funding. SilverSneakers represents just a small slice of that - the costs are not broken out by MedPAC - but it's significant enough that the bootstrap venture has turned into a big business.

SilverSneakers was founded in 1992 by a woman named Mary Swanson to help her father recover from a heart attack, and she built up the program in Arizona. As Medicare Advantage plans took off, the program expanded dramatically, and it's now the main business of a company called Tivity Health.

Over time, the SilverSneakers program came to be offered to members of Medicare Advantage and Medicare supplement plans through contracts Tivity Health had with 16,000 gyms and senior centers. On the SilverSneakers website, Tivity Health advertises its ability to help plans achieve "higher member acquisition." By 2021, the monthly fees SilverSneakers billed the plans generated $363 million in revenue, according to a securities filing. Tivity Health either "generally billed per member per month" or based on a combination of per member per month and member visits to a network location, a 2022 securities filing said. Stone Point Capital, a private-equity firm, bought Tivity Health and its SilverSneakers business for $2 billion in 2022.

In 2022, Tivity Health CEO Richard Ashworth wrote a letter to CMS saying that 97% of Medicare Advantage plans offer a fitness benefit and that data showed that members enrolled in the SilverSneakers program cost their plans 16% less in healthcare expenses than members who were not enrolled. Ashworth attributed the cost savings to the physical activity of SilverSneakers participants. Tivity Health did not respond to requests for comment.

It's easy to understand why seniors might get excited about SilverSneakers and then not actually participate. The statistic for nationwide gym membership among all groups is just as bleak: 67% of people never use their memberships and 50% quit within six months of signing up, according to Exercise.com.

But for more core medical services like dental, vision and hearing, a higher percentage of people might be expected to take advantage of coverage.

"We're still learning that key piece of the puzzle," says Gretchen Jacobson, vice president for Medicare at the Commonwealth Fund. "For one thing, it seems that, for some people, they don't feel like they need the benefit."

In any given year, someone might not have trouble with their teeth or need a new pair of glasses. They might never need hearing aids or a hearing exam. For Jacobson, that raises the question of whether there are more useful medical services that plans could offer instead.

There are also costs associated with using many of the ancillary medical benefits. There might not be an upfront premium, but there could be copays and coinsurance. These all run on a separate cost schedule than primary medical benefits and are offered in a number of different ways. Some Medicare Advantage plans offer a flat-dollar allowance, like $500 for dental care for the year, which the enrolled person can use anywhere, according to Jacobson. Others offer a capped amount for the year if the person uses in-network services.

"There's also a cost associated with using the benefits. I haven't seen a plan that covers absolutely all costs," Jacobson says. "That doesn't mean it couldn't exist, though. Some dental plans only cover preventive care, and some cover both preventive and comprehensive. It all usually requires some cost sharing."

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