Wyatt Koma, Juliette Cubanski
Follow @jcubanski on
Twitter , Gretchen Jacobson,
Anthony Damico, and Tricia Neuman Follow @tricia_neuman on Twitter
·
Methods
Each
year, Medicare beneficiaries in private Medicare Advantage plans and Part D
stand-alone prescription drug plans (PDPs) have the opportunity to change plans
during the annual open enrollment period (October 15 to December 7). Medicare’s
private plans vary significantly from each other and can change from one year
to the next, which can have a significant impact on enrollees’ coverage and
costs. The Centers for Medicaid & Medicare Services (CMS) encourages beneficiaries to shop for Medicare Advantage and
prescription drug plans to potentially save money on prescriptions or get new
benefits.
Understanding
how Medicare private plan markets are working is increasingly important for
both beneficiaries and the Medicare program overall. Many presidential
candidates and policymakers have proposed establishing a public program,
modeled on Medicare, to expand coverage, while others want to expand the role
of private plans within Medicare itself. To inform these discussions, this
analysis examines the share of people enrolled in Medicare Advantage
prescription drug plans (MA-PDs) and PDPs who switched plans for the following
year during the open enrollment periods between 2007 and 2016, the most current
year available for analysis of Medicare private plan switching rates. This
analysis excludes enrollees with low-income subsidies; more detailed methods are
described below.
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Overall, a small share of MA-PD and PDP enrollees without
low-income subsidies (8% and 10%, respectively) voluntarily switched to another
plan during the 2016 annual open enrollment period for the 2017 plan year
(Figure 1).
Figure 1: Only a Small Share of Medicare Advantage and Part D
Prescription Drug Plan Enrollees Voluntarily Switched Plans Between 2016 and
2017
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Among 9.4 million MA-PD enrollees without low-income subsidies,
7.6 percent (710,000 beneficiaries) voluntarily switched to another MA-PD
during the 2016 open enrollment period for 2017, and another 0.9 percent
(90,000 beneficiaries) switched from an MA-PD to traditional Medicare (with a
PDP). Among 11.7 million PDP enrollees without low-income subsidies, 8.3
percent (980,000 beneficiaries) switched to another PDP and another 1.7 percent
(200,000 beneficiaries) switched to an MA-PD during the 2016 open enrollment
period for 2017. (A very small share of Part D enrollees switch to MA-only
plans or traditional Medicare without Part D coverage; they are excluded from
this analysis.)
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A substantial majority of Medicare private plan enrollees have
not voluntarily switched plans in any given year over the time period of this
analysis. During the open enrollment periods between 2007 and 2016, the share
of enrollees without low-income subsidies voluntarily switching plans for the
coming year ranged between 6 and 11 percent for people in Medicare Advantage
drug plans, and between 10 and 13 percent among those in stand-alone drug plans
(Figure 2).
Figure 2: During Each of the Annual Open Enrollment Periods
Between 2007 and 2016, Most Medicare Private Plan Enrollees Did Not Voluntarily
Switch Plans for the Coming Year
·
Some share of people who did not switch in any given year are
beneficiaries who were enrolled in plans that exited the market and were
“crosswalked” (i.e., automatically enrolled) by their plan sponsor into a new
plan the following year. This means their plan is different from the previous
year, but they did not voluntarily choose a new plan. For the 2017 plan year
(corresponding to the 2016 open enrollment period), this comprised roughly 8
percent of MA-PD enrollees and 3 percent of PDP enrollees. Another small share
of enrollees involuntarily switched MA-PDs (3%) or PDPs (<1%) because their
plan exited the market for 2017 and they were not automatically crosswalked
into a new plan.
·
Based on our analysis of the Medicare Current Beneficiary
Survey, in 2017, more than one in three (35%) Medicare beneficiaries living in
the community said it is very or somewhat difficult to compare Medicare
options, and this share increased among beneficiaries in fair or poor
self-reported health (44%) and with five or more chronic conditions (40%).
·
In 2017, nearly half (45%) of people on Medicare living in the
community said they rarely or never review or compare their Medicare options;
the share was substantially higher among beneficiaries ages 85 and older (57%).
Discussion
With an
average of 28 Medicare Advantage plans
and 28 stand-alone Part D plans
available to beneficiaries in 2020, beneficiaries have dozens of plan options
from which to choose. Relatively low rates of plan switching during the open
enrollment period could indicate that beneficiaries are generally satisfied
with their current plan and therefore have little motivation to compare and
switch plans, or they may be actively choosing to remain in their plan after
comparing other available options.
But,
low switching rates could also indicate that many beneficiaries find the process of comparing plans
too challenging, are unaware of the open enrollment period, or have
limited confidence in their ability to choose a better plan. Both Medicare
Advantage and stand-alone drug plans can vary significantly in terms of
premiums, deductibles, cost sharing, provider and/or pharmacy networks, and
drugs covered, among other plan features. Comparing all of these factors
simultaneously is the best way to maximize value and lower costs, but it is
also time consuming and challenging, especially for beneficiaries with
cognitive impairments or serious health needs.
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 finding that nearly
half of all Medicare beneficiaries say they never or rarely compare plans
suggests that many beneficiaries may be unaware of important differences across
plans that could have a significant impact on their coverage, costs, and, in
the case of Medicare Advantage plans, access to certain providers. This is not
surprising given the sheer number of Medicare private plans now available and
the many ways in which they differ. 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.
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