A Comparatively Small Share of Medicare Beneficiaries In contrast Plans Throughout a Current Open Enrollment Interval


Each year, people with Medicare can review their coverage options and change plans during the annual open enrollment period (October 15 to December 7). Medicare beneficiaries with traditional Medicare can compare and switch Medicare Part D stand-alone drug plans or join a Medicare Advantage plan, while enrollees in Medicare Advantage can compare and switch Medicare Advantage plans or elect coverage under traditional Medicare with or without a stand-alone drug plan. Beneficiaries have no shortage of plans to choose from: in 2022, the average Medicare beneficiaries can choose among 39 Medicare Advantage plans and 23 Part D stand-alone prescription drug plans (PDPs).

Coverage and costs vary widely among both Medicare Advantage plans and Part D prescription drug plans. Plans can change from one year to the next, which could lead to unexpected and avoidable costs and disruptions in care for beneficiaries who do not review their options annually. For example, changes in provider networks could mean beneficiaries lose access to their preferred doctors, while changes in the list of covered drugs and cost-sharing requirements could result in higher out-of-pocket drug costs. Further, beneficiaries’ health care needs can change from one year to the next, making it even more important to compare coverage options annually. Even without a change made by their plan or a change in health status, beneficiaries may be able to find a plan that better meets their individual needs or lowers their out-of-pocket costs. The Centers for Medicare & Medicaid Services (CMS) recommends that beneficiaries review and compare Medicare plans each year.

In this analysis, we examine the share of Medicare beneficiaries who reviewed their coverage and compared plans during the open enrollment period for 2020 (that takes place in the Fall of 2019), and who made use of Medicare’s official information resources, as well as variations by demographic groups, based on an analysis of the 2020 Medicare Current Beneficiary Survey (the most recent year available). All reported results are statistically significant.

During the Medicare open enrollment period for 2020, we find:

  • Just 3 in 10 (29%) Medicare beneficiaries compared their current Medicare plan with other Medicare plans offered in their area.
  • About half (54%) of all Medicare Advantage enrollees reviewed their current plan’s coverage to check for potential changes in their plan’s premiums or other out-of-pocket costs, while the remaining half (46%) did not. The same share (54%) said they reviewed their current plan for potential changes in the kinds of treatments, drugs, and services that would be covered in the following year.
  • Fewer than 2 in 10 Medicare Advantage prescription drug plan (MA-PDs) enrollees (18%) and 3 in 10 stand-alone prescription drug plan (PDPs) enrollees (27%) compared their plan’s drug coverage with drug coverage offered by other plans in their area.
  • Medicare’s official information resources are generally not widely used by Medicare beneficiaries, although a larger share of beneficiaries report accessing the Medicare website and reading the Medicare & You handbook than calling the toll-free number. For instance, 7 in 10 (71%) beneficiaries report not calling the toll-free number while just over half report not using the Medicare website or the handbook.

Findings

Three in 10 Medicare Beneficiaries Compared Medicare Plans During the Open Enrollment Period for 2020 Coverage

Just 3 in 10 Medicare beneficiaries (29%) reported that they compared their current Medicare plan to other Medicare plans that were available during the 2019 open enrollment period for coverage in 2020 (Figure 1, Table 1). Despite year-to-year changes (e.g., changes in provider networks or prior authorization requirements) in Medicare Advantage plans, only about a third (32%) of Medicare Advantage enrollees reported that they compared Medicare plans for coverage in 2020.

Certain subgroups of Medicare beneficiaries were less likely than others to compare their current Medicare plan with other plans that were offered during the open enrollment period for 2020:

  • Income. Lower income Medicare beneficiaries (below $10,000) were less likely than higher income beneficiaries (at or above $40,000) to say they compared their current Medicare plans with other Medicare plans that were available during the open enrollment period (18% vs 31%) (Figure 2, Table 1).
  • Race/Ethnicity. A smaller share of Hispanic Medicare beneficiaries (19%) said they compared their current plan with other plans during the annual open enrollment period compared to White beneficiaries (30%). About a quarter of all Black beneficiaries (26%) said they compared plans that year, similar to the rate reported by White beneficiaries.
  • Age. The share of beneficiaries who said they compared their current plan with other plans was lower among those ages 85 and older (18%) and under age 65 with long-term disabilities (22%) compared to those ages 65-74 (34%). Medicare beneficiaries ages 85 and older and under 65 are more likely to have a cognitive impairment and other chronic health conditions, which may limit their ability to compare plans on their own.
  • Dually eligible (Medicare and Medicaid) beneficiaries. Smaller shares of beneficiaries enrolled in both Medicaid and Medicare – for example, 16% of full-benefit dually eligible beneficiaries – reported that they compared their current Medicare plan with other plans, compared to beneficiaries who were not dually eligible (31%).

About Half of All Medicare Advantage Enrollees Checked Their Current Plan for Potential Changes in Covered Services or Costs for the Coming Year

The open enrollment period offers beneficiaries an opportunity to review and understand annual changes to their Medicare premiums, cost-sharing requirements, and benefits. For Medicare Advantage enrollees, premiums, cost sharing, and out-of-pocket limits can vary from year to year and across plans, with Medicare Advantage plans having the flexibility to modify cost sharing for most services, subject to limitations. Medicare Advantage plans may provide extra (“supplemental”) benefits that are not covered in traditional Medicare, but the type and scope of specific services often varies from one year to the next. Additionally, Medicare Advantage plans have flexibility to impose prior authorization requirements for certain services, alter the list of covered drugs, and broaden or narrow their network of physicians and other providers from one year to the next, subject to federal standards.

Just over half (54%) of Medicare Advantage enrollees reviewed their current plan during the open enrollment period to see whether there would be changes for 2020 to their monthly premiums, deductibles, co-payments, or other out-of-pocket expenses, while the other half (46%) did not, despite the potential for such changes.

The share of Medicare Advantage enrollees who reviewed their plan for changes in costs was lower among certain enrollees. Specifically:

  • Race/ethnicity. The share of Medicare Advantage enrollees who reviewed their plan for any changes to their costs was lower among Hispanic (34%) and Black (49%) beneficiaries than White beneficiaries (59%) (Figure 3, Table 2).
  • Income level: Only a third (32%) of Medicare Advantage enrollees with income of less than $10,000 reviewed their plan for any changes to their costs compared to more than half (55%) of those with income of $40,000 or above.
  • Dually eligible (Medicare and Medicaid) beneficiaries: Smaller shares of dually eligible beneficiaries in Medicare Advantage plans – for example, 34% of full-benefit dually eligible beneficiaries –reviewed their plan for any changes to their costs compared to beneficiaries who were not dually eligible (59%).
  • Cognitive impairment: 41% of Medicare Advantage enrollees with a cognitive impairment reviewed their plan for any changes to their costs compared to those without such impairment (58%).

Similarly, slightly more than half (54%) of Medicare Advantage enrollees reviewed their current plan for changes to the kinds of treatments, drugs, and services offered for their coverage in 2020, with rates lower among certain enrollees (Figure 3):

  • Race/ethnicity. Smaller shares of Hispanic (37%) and Black (50%) Medicare Advantage enrollees reported that they reviewed their current plan for changes in the kinds of treatments, drugs, and services offered, compared to White enrollees (57%).
  • Income level. Over a third (37%) of Medicare Advantage enrollees with income of less than $10,000 reviewed their current plan for changes in the kinds of treatments, drugs, and services offered compared to half of beneficiaries with income of $40,000 or above (62%).
  • Dually eligible (Medicare and Medicaid) beneficiaries. Smaller shares of Medicare Advantage enrollees with both Medicare and Medicaid – for example, 39% of full-benefit dually eligible beneficiaries – reviewed their current plan for changes in the kinds of treatments, drugs, and services, compared to those who were not dually eligible beneficiaries (57%).
  • Cognitive impairment. Fewer than half of Medicare Advantage enrollees with a cognitive impairment (45%) reviewed their current plan for changes in the kinds of treatments, drugs, and services offered in 2020 compared to those without such impairment (57%) (Figure 3, Table 2).
Most Medicare Beneficiaries with Part D Prescription Drug Coverage Did Not Compare Their Plan’s Drug Coverage to Drug Coverage Offered by Other Medicare Plans

Part D plan costs, including premiums, deductibles, and cost-sharing requirements can change from year to year and vary by plan. Additionally, Part D plans can also modify their formularies, including adding or dropping drugs from coverage, and adding or modifying utilization management requirements that apply to specific drugs, such as prior authorization and step therapy.

Fewer than 2 in 10 (18%) beneficiaries in Medicare Advantage plans with prescription drug coverage (MA-PDs) said they compared the drug coverage offered by their current MA-PD to other MA-PDs in their area during the 2019 open enrollment period (Figure 4; Table 3). Among stand-alone prescription drug plan (PDP) enrollees, 27% said they compared drug coverage offered by their current PDP to other PDPs.

The share of beneficiaries in both types of drug plans who compared drug coverage offered for coverage in 2020 was lower among Black and Hispanic beneficiaries compared to White beneficiaries, beneficiaries ages 85 and older compared to those ages 65-74, beneficiaries with lower incomes (e.g., incomes under $10,000) compared to those with an income of $40,000 or above, beneficiaries with lower education levels (e.g., less than a high school diploma) compared to those with a bachelor’s degree or above, and dually eligible beneficiaries compared to those not enrolled in both Medicaid and Medicare (Table 3).

Medicare’s Information Resources—Especially the 1-800 Medicare Toll-Free Number—Are Not Widely Used by Beneficiaries

Medicare provides information resources to help beneficiaries understand their Medicare benefits, coverage options, and costs, including the 1-800 Medicare toll free number, the Medicare.gov website, and the Medicare & You handbook that is provided each year to all Medicare beneficiaries. But these resources are not widely used, particularly the toll-free number.

  • 7 in 10 (71%) Medicare beneficiaries reported that either they had never called the 1-800-MEDICARE helpline for information (52%) or they were not aware this helpline existed (19%), while 29% reported they had called the helpline (Figure 5, Table 4).
  • More than half (56%) of Medicare beneficiaries said either they had never visited the official Medicare website for information (43%) or they did not have access to the internet or had no one to access it for them (13%), while 44% said they (or someone for them) had visited the website.
  • Half (51%) of Medicare beneficiaries reported that either they had not read the Medicare & You handbook (29%) or they did not receive it or did not know if they had received it (22%), while 49% reported they had read thoroughly or some parts of the handbook.

Figure 5: Medicare’s Resources—Especially the 1-800 Toll-Free Number—Are Not Widely Used by Beneficiaries

The share of Medicare beneficiaries who did not use Medicare information sources varied among subgroups of beneficiaries (Table 4). For example, 60% of beneficiaries ages 85 and above reported not calling 1-800 MEDICARE compared to 51% of beneficiaries ages 65-74. Half (51%) of beneficiaries with a high school diploma never visited the Medicare.gov website compared to about a third (34%) of beneficiaries with a bachelor’s degree or higher. Just over a third (38%) of Hispanic beneficiaries read the Medicare & You handbook compared to half (51%) of White beneficiaries. Further, a larger share of Black (46%) than White (42%) beneficiaries did not visit the Medicare.gov website, with larger shares of Black (24%) and Hispanic (31%) beneficiaries reporting not having access to the internet or someone to access the internet for information for them compared to White beneficiaries (10%).

Discussion

The marketplace of Medicare private plans operates on the premise that people with Medicare will compare plans to select the best source of coverage, given their individual needs and circumstances. Our analysis finds that a relatively small share of Medicare beneficiaries compared plans during the 2019 open enrollment period for coverage in 2020. Despite year-to-year changes in premiums, deductibles, cost sharing, and out-of-pocket limits in Medicare Advantage plans, just over half of Medicare Advantage enrollees reviewed their current plan in 2019 to check for potential changes to their coverage and costs for the coming year. Additionally, we find that, with regard to Medicare’s information resources that support informed decision making, while more beneficiaries used Medicare’s toll-free helpline or website than the Medicare and You handbook, none of these resources were used by more than half of all beneficiaries.

With a relatively small share of beneficiaries actively comparing their Medicare coverage options during the open enrollment period, it is no surprise that an even smaller share of Medicare Advantage and Part D prescription drug plan enrollees switch plans plans from one year to the next. This “stickiness” could indicate that beneficiaries are satisfied with their coverage and do not think they need to shop for better coverage, but it could also signal a more fundamental issue that arises when consumers face a multitude of plan choices and become too overwhelmed to make a decision.

With a growing number of Medicare private plan choices available each year, the fact that a small share of Medicare beneficiaries report comparing their current plan with other available plans during the open enrollment period warrants attention, given the potential consequences of year-to-year plan changes for beneficiaries’ coverage, access to care, and out-of-pocket costs.

This analysis uses survey data for community-dwelling Medicare beneficiaries from the Centers for Medicare & Medicaid Services (CMS) Medicare Current Beneficiary Survey (MCBS) 2020 Survey File.

The analysis of 1) the share of beneficiaries who compared Medicare plans during the open enrollment period for 2020 coverage, 2) the share of Medicare Advantage enrollees who reviewed their current coverage for changes in costs or services, and 3) the share of beneficiaries who used Medicare’s official information sources used questions from the Medicare Plan Beneficiary Knowledge topical segment. This analysis was weighted to represent the ever-enrolled Medicare population in 2020 using the topical survey weight KNSEWT and relevant replicate weights. The analysis of the share of beneficiaries who compared Medicare plans and the share of Medicare Advantage enrollees who reviewed their current coverage for changes in costs or services excluded beneficiaries who reported just enrolling in Medicare.

The analysis of MA-PD/PDP drug plan comparison used questions from the Rx Medication topical segment; similar as above, the analysis was weighted to represent the ever-enrolled Medicare population in 2020 using the topical survey weight RXSEWT and relevant replicate weights.

Both analyses excluded beneficiaries with Part A or Part B only, those with Medicare as secondary payer, and those living in long-term care facilities. All reported differences in the text are statistically significant at p<0.05.



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