Health Affairs

From Health Affairs

Choice Overload: Why Some Seniors Avoid Medicare Advantage Plans

Bethesda, MD -- A new study, released online today as a Web First by Health Affairs, found that elderly Americans, when faced with an increasing number of Medicare Advantage plans to choose from, were more likely to enroll in the program when their options were limited. However, they were less likely to opt for Medicare Advantage when their options became too numerous. In the first study to directly examine the influence of cognition on enrollment decisions in Medicare, it was also found that seniors with impaired cognition were less likely than those with better cognitive abilities to enroll in Medicare Advantage when plans offered more generous benefits. This study, also appearing in Health Affairs’ upcoming September edition, is part of its series of Care Span articles, supported by The SCAN Foundation.

Complex Medicare Advantage Choices May Overwhelm Seniors—Especially Those With Impaired Decision Making By J. Michael McWilliams, Christopher C. Afendulis, Thomas G. McGuire and Bruce E. Landon http://content.healthaffairs.org/content/early/2011/08/16/hlthaff.2011.0132 The authors are affiliated with Harvard Medical School’s Department of Health Care Policy and Brigham and Women’s Hospital. The research was supported by the Beeson Career Development Award Program, the National Institute on Aging, and American Federation for Aging Research.

 

To examine the effects of multiple plan options on enrollment in Medicare Advantage, the authors looked at 21,815 enrollment decisions from 2004 to 2007 made by 6,672 participants in the Health and Retirement Study, a national longitudinal survey conducted biennially by the University of Michigan. In comparing enrollment decisions between participants with different cognition levels and plan offerings in their area, they found that if fifteen or fewer plans were available in a region, there was usually an increase in Medicare Advantage enrollment. When the number of options surpassed thirty, as it did in 25 percent of US counties, more choice was associated with decreased enrollment in the program. More importantly, elderly adults with low cognitive ability were much less likely than those with high cognitive ability to switch into Medicare Advantage when the benefits became more attractive relative to the traditional Medicare program. These findings suggest many Medicare beneficiaries are unable to access or process information and consequently make suboptimal enrollment decisions when faced with complex insurance choices. “Health care reforms that restructure and simplify choice in Medicare Advantage could improve beneficiaries’ enrollment decisions…and help invigorate value-based competition among managed care plans in Medicare,” conclude the authors.

Health Affairs is the leading journal at the intersection of health, health care, and policy. Published by Project HOPE, the peer-reviewed journal appears each month in print, with additional Web First papers published periodically and health policy briefs published twice monthly at www.healthaffairs.org. You can also find the journal on Facebook and Twitter. Read daily perspectives on Health Affairs Blog. Download weekly Narrative Matters podcasts on iTunes.

The full text of each Health Affairs Web First paper is available free of charge to all Web-site visitors for a two-week period following posting, after which it switches to pay-per-view for nonsubscribers. Web First papers are supported in part by a grant from The Commonwealth Fund.