Medical Professionals Online

Complexity Of Choices In Medicare Advantage Program May Overwhelm Some American Seniors

June 23, 2017

The wide choice of managed care plans that the Medicare Advantage Program offers could be counter-productive, says a new study published in Health Affairs and authored by Harvard Medical School researchers. Seniors, especially those with poor cognitive abilities, frequently make inadequate choices, or end up making no decision when presented with an excessively wide choice of complex insurance options.

Assistant professor of health care policy and medicine, J. Michael McWilliams, from Harvard Medical School, said:

"We are providing the most complex insurance choices to the very population that is least equipped to make these high-stakes decisions. Most other Americans choose from just a few health plans, but elderly Medicare beneficiaries often have to sift through dozens of options."

Several payment increases to the Medicare Advantage program were initiated under the 2003 Medicare Modernization Act. These increases significantly raised the number of private plans that could participate in the program. They were encouraged to compete for beneficiaries by offering more benefits and cheaper premiums, such as coverage for prescription medications.

McWilliams and colleagues set out to determine what the effects of these expanded benefits and choices of enrollment in Medicare Advantage compared to traditional Medicare might be. The researchers gathered data on 21,815 enrollment decisions from 2004 to 2007 that 6,672 participants had made. They compared enrollment decisions made by participants with varying cognition levels, as well as types of plans offered in their areas.

They found that as long as the number of plan options being offered was fewer than 15, a rise in the number of plans resulted in an increase in Medicare Advantage enrollment. However, when there were over 30 options the number of enrollments actually dropped - this was the case in 25% of US counties.

Of notable concern was that beneficiaries with poor cognitive function appeared to be considerably less likely to understand the advantages these plans offered, compared to their peers with high cognitive function - they would opt to stay in the traditional Medicare program.

McWilliams and team believe that beneficiaries simply became overwhelmed and chose traditional Medicare by default, resulting in lower enrollment.

When faced with a complex series of Medicare alternatives, Medicare beneficiaries with poor cognitive abilities find it very hard to identify the best options. As the prevalence of dementia and cognitive impairment is rising among the country's aging Medicare population, this is of particular concern, they added.

Their findings are especially relevant now, as health insurance exchanges are set up under the recent reform legislation under the Affordable Care Act.

McWilliams said:

"Efforts to limit choice and guide seniors to the most valuable options could especially benefit those with cognitive impairments, who without more help appear to be leaving money on the table. Better enrollment decisions could in turn strengthen competition by rewarding high-value plans with more enrollees."