Each year, Medicare beneficiaries have a crucial window—the Open Enrollment Period (October 15 to December 7)—to evaluate their current healthcare coverage and make informed decisions for the upcoming year. This period allows individuals to Compare Plans Medicare options, switch between Original Medicare and Medicare Advantage, adjust their Part D prescription drug coverage, and ultimately ensure they have the most suitable plan tailored to their evolving health needs and financial situations. With a plethora of choices available – an average beneficiary could choose from approximately 43 Medicare Advantage plans and 21 stand-alone Part D drug plans in 2024 – the importance of plan comparison cannot be overstated.
The foundation of the Medicare private plan market rests on the principle of informed consumer choice. Beneficiaries are expected to actively compare plans medicare options to secure the best possible coverage. However, the landscape of Medicare plans is dynamic. Coverage details and associated costs are subject to annual changes, varying significantly across both Medicare Advantage and Part D plans. Failing to compare plans annually can expose beneficiaries to unexpected financial burdens and disruptions in their healthcare access. For instance, shifts in Medicare Advantage provider networks might restrict access to preferred physicians, while alterations in drug formularies and cost-sharing structures could inflate out-of-pocket expenses for medications. Furthermore, individual health requirements are not static; they evolve. Even without plan modifications or health status changes, beneficiaries might discover plans that better align with their current needs and offer lower costs if they take the time to compare plans medicare choices available to them.
Insights from focus groups conducted by KFF underscore these very concerns. Medicare beneficiaries consistently emphasize out-of-pocket costs, access to specific healthcare providers, and comprehensive prescription drug coverage as pivotal factors in their Medicare coverage decisions. Yet, many express feeling overwhelmed by the complexity of comparing plan options and bombarded by relentless television advertising, predominantly for Medicare Advantage plans. This highlights a significant gap between the ideal of informed choice and the reality faced by many beneficiaries.
This analysis delves into the critical issue of plan comparison among Medicare beneficiaries. It examines the proportion of individuals who actually reviewed their coverage and compared plans during the 2021 open enrollment period for coverage in 2022. It also investigates the utilization of official Medicare information resources and explores variations across different demographic groups. The findings are based on an in-depth analysis of the 2022 Medicare Current Beneficiary Survey (MCBS), the most recent data available, offering a comprehensive look at beneficiary behavior during Medicare’s open enrollment.
Key Findings: A Snapshot of Plan Comparison and Information Usage
- Widespread Lack of Plan Comparison: A striking 69% of Medicare beneficiaries did not compare their existing Medicare coverage against other available options during the 2021 open enrollment. Notably, a higher percentage of beneficiaries in traditional Medicare (73%) than in Medicare Advantage (65%) did not compare plans.
- Inadequate Review of Existing Medicare Advantage Plans: Among Medicare Advantage enrollees, over 40% (43%) neglected to review their current plan for potential changes in premiums and out-of-pocket costs. A similar proportion (44%) did not check for modifications in covered treatments, drugs, and services for the upcoming year.
- Limited Comparison of Prescription Drug Coverage: A significant majority of beneficiaries with Medicare Advantage prescription drug plans (MA-PDs) (82%) and stand-alone prescription drug plans (PDPs) (69%) did not compare their drug coverage with alternatives in their area.
- Underutilization of Medicare Information Resources: Medicare’s official resources, including the 1-800 Medicare helpline, the Medicare website, and the Medicare & You handbook, are accessed by half or fewer of Medicare beneficiaries. Only 26% reported using the helpline, 42% visited the website, and 54% read portions of the handbook.
Figure 1: Bar chart illustrating that approximately 69% of Medicare beneficiaries did not compare Medicare coverage options during the 2021 open enrollment period for 2022 coverage, highlighting the majority’s lack of plan comparison.
The Stark Reality: Most Medicare Beneficiaries Forego Plan Comparison
The data reveals a concerning trend: the majority of Medicare beneficiaries (69%) are not actively engaging in comparing their Medicare plan options during the crucial open enrollment period (Figure 1, Table 1). Even among Medicare Advantage enrollees, who are often subject to annual plan changes impacting provider networks and authorization requirements, nearly two-thirds (65%) did not compare coverage options for 2022. This widespread lack of comparison underscores a potential vulnerability for beneficiaries, who may be missing out on better coverage or cost savings.
Furthermore, the propensity to not compare plans is amplified among specific demographic subgroups. Beneficiaries with lower incomes and educational attainment, Hispanic individuals, those dually enrolled in Medicare and Medicaid, younger beneficiaries under 65 with disabilities, older adults aged 85 and above, and individuals with cognitive impairments are even less likely to compare plans (Figure 2, Appendix Table 1). These disparities highlight the need for targeted outreach and support to ensure equitable access to information and resources for all beneficiaries, enabling them to effectively compare plans medicare options.
Figure 2: Column chart detailing the percentage of Medicare beneficiaries who did not compare Medicare coverage options during the 2021 open enrollment period for 2022, broken down by various subgroups such as income level, education, ethnicity, age, disability status, dual enrollment, and cognitive impairment, illustrating disparities in plan comparison across different populations.
Overlooking Changes in Existing Medicare Advantage Plans: A Costly Mistake
Medicare Advantage plans, while offering comprehensive coverage and often additional benefits, are not static. Premiums, cost-sharing arrangements, and out-of-pocket limits can fluctuate annually and vary significantly across plans. Medicare Advantage plans possess the latitude to modify cost-sharing for most services, within regulatory boundaries. They may also offer supplemental benefits beyond Original Medicare, but the nature and extent of these benefits are subject to yearly adjustments. Moreover, prior authorization requirements, prevalent in virtually all Medicare Advantage plans, can change, along with drug formularies and provider networks.
Despite these potential year-to-year changes, a substantial 43% of Medicare Advantage enrollees did not review their current plan during the open enrollment period to identify any modifications in monthly premiums, deductibles, co-payments, or other out-of-pocket expenses. Similarly, 44% did not check for alterations in covered treatments, drugs, and services for 2022. This lack of review can lead to unexpected costs and limited access to necessary care.
Certain subgroups of Medicare Advantage enrollees are even less likely to review their existing plans for changes. These include individuals with lower incomes and education levels, Black and Hispanic enrollees, those reporting fair or poor health, adults aged 85 and older, and beneficiaries dually eligible for Medicare and Medicaid (Figure 3, Appendix Table 2). For instance, half of Medicare Advantage enrollees in fair or poor health did not check for changes in costs or covered services. Nearly two-thirds of Hispanic and half of Black Medicare Advantage enrollees also failed to review their plans for cost changes. These findings underscore the critical need for targeted interventions to encourage plan review, especially among vulnerable populations.
Figure 3: Bar chart illustrating the proportion of Medicare Advantage enrollees who did not review their current plan for changes in costs or services for 2022, segmented by subgroups such as income, education, race/ethnicity, health status, age, and dual eligibility, highlighting disparities in plan review behavior within Medicare Advantage.
Prescription Drug Coverage: A Missed Opportunity for Savings
Part D plan costs, encompassing premiums, deductibles, and cost-sharing, are also subject to annual changes and plan-specific variations. Part D plans can modify their formularies, potentially removing or adding drugs, and introduce or alter utilization management protocols like prior authorization and step therapy.
The Inflation Reduction Act’s prescription drug provisions are set to significantly reshape Part D, including a landmark $2,000 out-of-pocket spending cap starting in 2025. Anticipating these changes, Part D plan sponsors may adjust premiums, formularies, and cost-sharing structures, making it paramount for beneficiaries to diligently compare their prescription drug options during open enrollment to maximize savings and ensure optimal coverage.
However, the data reveals a significant gap in beneficiary behavior. Approximately 82% of enrollees in Medicare Advantage plans with prescription drug coverage (MA-PDs) did not compare their drug coverage to other MA-PDs in their area during the 2021 open enrollment (Figure 4; Appendix Table 3). Among stand-alone prescription drug plan (PDP) enrollees, a slightly lower, but still substantial, 69% did not compare drug coverage options. This widespread lack of comparison signifies a missed opportunity for many beneficiaries to potentially lower their drug costs and access more suitable coverage.
Similar to overall plan comparison and Medicare Advantage plan review, certain demographic groups are less likely to compare drug coverage options. These include women, beneficiaries with lower incomes and education levels, Hispanic beneficiaries, older adults aged 85 and older, and dual-eligible individuals (Appendix Table 3). Addressing these disparities is crucial to ensure equitable access to affordable and comprehensive prescription drug coverage.
Figure 4: Stacked bar chart showing the percentage of Medicare beneficiaries with Medicare Advantage Prescription Drug (MA-PD) or stand-alone Prescription Drug Plan (PDP) coverage who did not compare drug coverage options during the 2021 open enrollment period for 2022, differentiated by plan type (MA-PD vs. PDP), highlighting the higher rate of non-comparison among MA-PD enrollees.
Medicare’s Information Resources: Underutilized and Underknown
Medicare provides a range of resources designed to empower beneficiaries to understand their benefits, coverage choices, and costs. These include the 1-800 Medicare toll-free helpline, the official Medicare.gov website, and the comprehensive Medicare & You handbook, distributed annually to all beneficiaries. However, these invaluable resources remain significantly underutilized, particularly the toll-free helpline (Figure 5, Appendix Table 4).
Only about a quarter (26%) of Medicare beneficiaries reported contacting the 1-800-MEDICARE helpline for information. A substantial 74% either never used the helpline (51%) or were unaware of its existence (23%). Similarly, while 42% of beneficiaries or their representatives visited the Medicare website for information, over half (58%) either never accessed the site (36%) or lacked internet access or assistance (22%). The Medicare & You handbook fares slightly better, with 54% of beneficiaries reporting reading at least parts of it. However, a considerable 46% either did not read it (31%) or did not recall receiving it (15%).
Utilization rates of Medicare information resources are even lower among specific subgroups, including Black beneficiaries, individuals aged 75 to 84, and dual-eligible beneficiaries (Appendix Table 4). These findings point to critical gaps in awareness, accessibility, and effective dissemination of Medicare information resources. Improving outreach and tailoring information delivery methods to diverse beneficiary needs are essential steps towards promoting informed decision-making.
Figure 5: Horizontal bar chart depicting the utilization of Medicare information sources among all Medicare beneficiaries, showing the percentages who used the 1-800-MEDICARE helpline, visited the Medicare website, and read the Medicare & You handbook, highlighting the relatively low usage rates of these resources.
Conclusion: Bridging the Gap Between Choice and Informed Action
The findings unequivocally demonstrate that a significant majority of Medicare beneficiaries are not actively comparing plans during the open enrollment period. This widespread lack of plan comparison and limited utilization of Medicare information resources pose substantial challenges to the effectiveness of the Medicare program and its ability to serve beneficiaries optimally. The consequences of not comparing plans can be significant, leading to higher out-of-pocket costs, restricted access to preferred providers or medications, and overall suboptimal healthcare coverage.
Addressing this issue requires a multi-faceted approach. Efforts to enhance beneficiary awareness of the importance of plan comparison are paramount. Simplifying the plan comparison process, improving the accessibility and user-friendliness of Medicare’s information resources, and tailoring outreach strategies to reach underserved populations are crucial steps. Furthermore, innovative approaches to personalize information delivery and provide decision support tools could empower beneficiaries to make more informed choices about their Medicare coverage. Ultimately, fostering a culture of proactive plan comparison is essential to ensuring that Medicare beneficiaries can truly benefit from the choices available to them and secure the healthcare coverage that best meets their individual needs and circumstances.
Methods
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| This analysis is based on data from the Centers for Medicare & Medicaid Services (CMS) 2022 Medicare Current Beneficiary Survey (MCBS) Survey File, focusing on community-dwelling Medicare beneficiaries. The study utilized questions from the Medicare Plan Beneficiary Knowledge topical segment to assess plan comparison behaviors and the use of Medicare information resources. Data were weighted to represent the ever-enrolled Medicare population in 2022, employing the KNSEWT topical survey weight and relevant replicate weights. Beneficiaries newly enrolled in Medicare were excluded from the analysis of plan comparison and Medicare Advantage plan review. The analysis of MA-PD/PDP drug plan comparison employed questions from the Rx Medication topical segment, using the RXSEWT topical survey weight and relevant replicate weights. This analysis excluded beneficiaries with Part A or Part B only, those with Medicare as secondary payer, and those residing in long-term care facilities. All reported differences are statistically significant at p<0.05. |
Appendix
