Plan Comparison May Prevent Medicare Beneficiaries Switching Plans

December 04, 2019 - Update 12/6/2019: This article has been updated to reflect that the 8 and 10 percent voluntary shifts happened in unsubsidized MA plans and Medicare prescription drug plans, respectively. An earlier version said that the shift occurred among enrollees who used low-income subsidies for their MA and prescription drug plans.

Few Medicare beneficiaries switched their plans during open enrollment in 2016 potentially because of the complexity of health plan comparison, a recent analysis from Kaiser Family Foundation (KFF) found.

“Our finding that a majority of MA-PD and PDP enrollees stay in the same plan during the annual open enrollment period may not be a concern, but it raises a question as to whether ‘stickiness’ leads to avoidable costs, or unrealized benefits, for a large share of the Medicare population,” the KFF researchers said.

Of those who were in subsidized MA plans with prescription drug coverage, only eight percent voluntarily switched their plans. Similarly, around 90 percent of individuals in unsubsidized Medicare plans with a Part D prescription drug plan chose to maintain their plan from the previous year.

There were some who switched involuntarily. However, the percentage was only slightly over three percent between MA and traditional Medicare combined and almost exclusively among MA beneficiaries.

The study excluded “crosswalked” beneficiaries from the count of those who involuntarily switched plans. Approximately eight percent of MA and three percent of prescription drug plan beneficiaries were moved—or “crosswalked”—from their low star-rated plan to a plan with high star ratings without their healthcare payers adjusting the beneficiaries’ care quality.

Earlier this year, CMS implemented a star ratings system on the Affordable Care Act exchanges in part to prevent payers from “crosswalking” beneficiaries in this way.

It is typical for beneficiaries to involuntarily switch their plans during open enrollment and the trend extends beyond low-income beneficiaries with subsidized plans. Between 2007 and 2016, only six to 11 percent of enrollees whose MA plans were not subsidized voluntarily switched their plans. For traditional Medicare, the rate was slightly higher, with 10 to 13 percent voluntarily switching in that nine-year time period.

According to the KFF report, 35 percent of Medicare beneficiaries pointed to the challenge of comparing Medicare plans as one barrier to switching, characterizing the process as “very” or “somewhat” difficult. Those who said they were in “fair” or “poor” health were more likely to find the process challenging. Forty percent of those living with five or more chronic conditions had difficulty comparing health plans.

Since 2016, the Medicare Plan Finder underwent its first redesign in ten years. This year, Medicare beneficiaries had the opportunity to explore the new version.

Nevertheless, seniors remain confused, as demonstrated by the high demand for Medicare navigators.

Fifty percent of beneficiaries said that they do not consider other plan options but simply retain the same plan year to year.

It is possible, with half of all Medicare beneficiaries not reviewing their Medicare coverage each year, that health plan satisfaction is very high.

Alternatively, plan switching might be challenging due to lack of information. If beneficiaries are not armed with the tools and knowledge to research their health plans, then they may simply maintain the same coverage.

Especially in Medicare Advantage plans, plan stasis can be limiting for enrollees. Medicare plans are constantly evolving, for example by adding new benefits or changing deductibles, premiums, and copays. As a result, the plan which fits a beneficiary’s needs in 2019 may not the best possible choice for the same beneficiary in 2020.

With enrollment down possibly due to early technical failures, experts have been especially vocal about the need to research and enroll in a Medicare plan during this open enrollment season.

Recognizing these challenges is not only critical for beneficiaries, but for policymakers as well.

"Given that some presidential candidates and policymakers are discussing proposals to build on Medicare and the marketplace model or to broaden the role of private plans in Medicare, understanding the barriers that people on Medicare experience will continue to be important for policy discussions,” the KFF researchers explained.