Each year, Medicare beneficiaries have a window of opportunity known as the Open Enrollment Period to assess their healthcare coverage and make changes to their plans. This period, running from October 15 to December 7, is a critical time for individuals to ensure their Medicare coverage best meets their evolving health needs and financial situations. During this time, those with traditional Medicare can evaluate and switch Medicare Part D stand-alone drug plans or enroll in a Medicare Advantage plan. Similarly, Medicare Advantage enrollees can compare and switch Medicare Advantage plans or opt for traditional Medicare, potentially with a stand-alone drug plan. With a wide array of options available – in 2024, beneficiaries could choose from an average of 43 Medicare Advantage plans and 21 stand-alone prescription drug plans – the importance of plan comparison is undeniable.
The Medicare private plan system is built upon the idea that beneficiaries actively compare plans during open enrollment to secure the most suitable coverage. However, a recent study reveals a concerning trend: a significant majority of Medicare beneficiaries do not engage in this crucial comparison process. Coverage details and costs can vary significantly between Medicare Advantage and Part D prescription drug plans, and these aspects can change annually. Failing to review and compare plans can lead to unexpected expenses and disruptions in healthcare access. Changes in Medicare Advantage provider networks, for instance, could restrict access to preferred physicians. Similarly, alterations in drug formularies and cost-sharing structures could inflate out-of-pocket medication costs. Furthermore, beneficiaries’ healthcare needs are not static; they evolve. Even without plan modifications or health status changes, beneficiaries might discover plans that better align with their current needs or offer reduced out-of-pocket expenses if they take the time to Medicare Compare Plans.
Insights from focus groups conducted by KFF (Kaiser Family Foundation) highlight that Medicare beneficiaries recognize the importance of factors like out-of-pocket costs, access to specific doctors, and prescription drug coverage when selecting their Medicare plan. However, these same beneficiaries often express feeling overwhelmed by the complexity of comparing plan options and bombarded by a relentless stream of advertisements, predominantly for Medicare Advantage plans. This complexity and marketing saturation may contribute to the lack of plan comparison among beneficiaries.
This analysis delves into the proportion of Medicare beneficiaries who assessed their coverage and compare medicare plans during the 2021 open enrollment period for coverage in 2022. It also examines the utilization of official Medicare information resources and variations across different demographic groups, based on data from the 2022 Medicare Current Beneficiary Survey, the most recent data available.
Key Findings: Low Rates of Medicare Plan Comparison
- A striking 69% of Medicare beneficiaries did not compare medicare plans with other available options in their area during the 2021 open enrollment period. Conversely, only 31% undertook this comparison. A higher percentage of beneficiaries in traditional Medicare, compared to those in Medicare Advantage, did not compare their coverage options (73% versus 65%).
- Among Medicare Advantage enrollees, over 40% (43%) did not review their existing plan’s coverage for potential changes in premiums or out-of-pocket costs. A similar proportion (44%) did not check for changes in the treatments, drugs, and services covered in the subsequent year.
- The majority of enrollees in Medicare Advantage prescription drug plans (82%) and stand-alone prescription drug plans (PDPs) (69%) did not compare medicare plans for drug coverage with other plans in their area.
- Medicare’s official information resources are underutilized, with only about a quarter (26%) of beneficiaries contacting the toll-free number, 42% visiting the Medicare website, and slightly over half (54%) reading parts of the Medicare & You handbook.
Majority of Beneficiaries Miss Opportunity to Compare Medicare Plans
The data reveals that a significant 69% of Medicare beneficiaries reported not comparing their current Medicare plan with other available options during the 2021 open enrollment period for 2022 coverage (Figure 1, Table 1). Even among Medicare Advantage enrollees, nearly two-thirds (65%) did not compare medicare plans for 2022. This is particularly noteworthy given that Medicare Advantage plans are known for year-to-year changes that can impact access to care, such as alterations in provider networks or prior authorization requirements.
Alt: Bar chart showing that 69% of Medicare beneficiaries did not compare Medicare coverage options during the 2022 open enrollment period, while 31% did.
Certain subgroups of beneficiaries showed even lower rates of plan comparison. These include beneficiaries with lower incomes and education levels, Hispanic beneficiaries, those dually enrolled in Medicare and Medicaid, individuals under 65 with disabilities or aged 85 and older, and beneficiaries with cognitive impairments (Figure 2, Appendix Table 1). These vulnerable populations may face additional barriers to accessing and understanding information about their Medicare options, highlighting the need for targeted outreach and support to encourage them to compare medicare plans.
Alt: Figure 2 displays a bar chart showing the percentage of Medicare beneficiaries who did not compare Medicare coverage options in 2022, broken down by subgroups including income, education, ethnicity, dual enrollment status, age and cognitive impairment, revealing disparities in comparison rates across these groups.
Lack of Reviewing Current Medicare Advantage Plans for Changes
Medicare Advantage plans are characterized by annual fluctuations in premiums, cost sharing, and out-of-pocket limits. Plans have the autonomy to adjust cost sharing for most services within certain limits. While Medicare Advantage plans often offer supplemental benefits beyond traditional Medicare, these benefits, along with the specific services covered, can change from year to year. Furthermore, prior authorization requirements are prevalent in Medicare Advantage, and plans can modify drug formularies and provider networks annually, adhering to federal guidelines. Therefore, reviewing current plans is as critical as to medicare compare plans overall.
Despite the potential for significant changes, a substantial 43% of Medicare Advantage enrollees did not review their current plan during the open enrollment period to check for changes in monthly premiums, deductibles, co-payments, or other out-of-pocket expenses for 2022. Similarly, 44% did not review their plan for changes in the treatments, drugs, and services covered (Figure 3, Appendix Table 2). This lack of review can lead to beneficiaries being unaware of critical changes that could affect their healthcare costs and access.
Alt: Figure 3 is a bar chart illustrating that 43% of Medicare Advantage enrollees did not review their plan for cost changes and 44% did not review for service changes in 2022, highlighting a significant portion unaware of potential plan modifications.
Similar to the overall plan comparison rates, certain groups of Medicare Advantage enrollees were less likely to review their existing plans for changes. These included those with lower incomes and education levels, Black and Hispanic enrollees, individuals reporting fair or poor health, enrollees aged 85 and older, and those dually eligible for Medicare and Medicaid (Figure 3, Appendix Table 2). These disparities suggest that targeted educational efforts are needed to encourage plan review, especially among vulnerable populations who may be most impacted by plan changes.
For instance, half of Medicare Advantage enrollees in fair or poor health did not check for changes in premiums, deductibles, or co-payments, or in covered treatments, drugs, and services. Nearly two-thirds of Hispanic (65%) and half of Black (50%) Medicare Advantage enrollees did not review their plans for cost changes, with similar patterns for service changes (64% vs 48%, respectively). Additionally, almost 60% of adults aged 85 and older did not review their plans for changes in costs (57%) or services (58%). These statistics underscore the need to improve outreach and communication strategies to ensure all beneficiaries, particularly those at higher risk, understand the importance of plan review and comparison.
Limited Comparison of Part D Prescription Drug Coverage
Part D plan costs, encompassing premiums, deductibles, and cost-sharing, are subject to annual changes and vary across plans. Formularies can also be modified, with drugs being added or removed from coverage, and utilization management requirements like prior authorization and step therapy can be introduced or altered. With the Inflation Reduction Act bringing significant changes to lower out-of-pocket drug costs, including a $2,000 cap in 2025, Part D plan sponsors may adjust premiums, formularies, and cost-sharing. This makes it especially crucial for beneficiaries to compare medicare plans for prescription drug coverage during open enrollment.
However, approximately 82% of enrollees in Medicare Advantage plans with prescription drug coverage (MA-PDs) did not compare their drug coverage with other MA-PDs in their area during the 2021 open enrollment period (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 indicates a widespread failure to actively seek potentially better or more cost-effective drug coverage.
Alt: Figure 4 is a bar chart comparing the percentage of Medicare beneficiaries with Part D coverage who did not compare drug coverage options in 2022 for MA-PD and PDP plans separately, showing higher non-comparison rates for MA-PD plans.
Subgroups with MA-PD or PDP coverage who were less likely to compare medicare plans for drug coverage in 2022 included women, beneficiaries with lower incomes and education levels, Hispanic beneficiaries, those aged 85 and older, and dual-eligible individuals (Appendix Table 3). These findings highlight the need for targeted interventions to improve drug plan comparison rates among these vulnerable populations.
Underutilization of Medicare’s Information Resources
Medicare provides various resources to help beneficiaries understand their benefits, coverage options, and costs. These include the 1-800 Medicare toll-free number, the Medicare.gov website, and the annual Medicare & You handbook. Despite their availability, these resources are not widely used, particularly the toll-free helpline (Figure 5, Appendix Table 4).
Alt: Figure 5 presents a bar chart showing the utilization rates of Medicare information resources, including the Medicare helpline, website, and handbook, among beneficiaries, indicating low usage of helpline and website compared to the handbook.
- Only about 26% of Medicare beneficiaries reported calling the 1-800-MEDICARE helpline for information. A significant 74% either never called (51%) or were unaware of its existence (23%).
- Four in ten (42%) beneficiaries visited the Medicare website for information. Over half (58%) either never visited (36%) or lacked internet access or assistance (22%).
- While more than half (54%) reported reading the Medicare & You handbook, 46% either did not read it (31%) or did not receive it or know if they received it (15%).
Use of Medicare information resources was lower among Black beneficiaries, individuals aged 75 to 84, and dual-eligible individuals (Appendix Table 4). These findings suggest a need to enhance awareness and accessibility of Medicare’s information resources, particularly among underserved populations, to empower them to effectively compare medicare plans and make informed coverage decisions.
| ###### Methods |
|---|
| This analysis is based on survey data from the Centers for Medicare & Medicaid Services (CMS) Medicare Current Beneficiary Survey (MCBS) 2022 Survey File, focusing on community-dwelling Medicare beneficiaries. It examines plan comparison rates, Medicare Advantage plan review rates, and the utilization of Medicare information resources using questions from the Medicare Plan Beneficiary Knowledge topical segment. The data is weighted to represent the 2022 Medicare population using the topical survey weight KNSEWT and relevant replicate weights. Analyses of plan comparison and Medicare Advantage plan review exclude newly enrolled beneficiaries. Drug plan comparison analysis uses data from the Rx Medication topical segment, weighted with RXSEWT and replicate weights. Both analyses exclude beneficiaries with Part A or Part B only, secondary payer Medicare, and those in long-term care facilities. All reported differences are statistically significant at p<0.05. |
Appendix
Conclusion: Empowering Beneficiaries to Compare Medicare Plans
The analysis reveals a concerning lack of engagement in Medicare plan comparison and review among beneficiaries. The majority do not compare medicare plans during open enrollment, potentially missing out on better coverage and cost savings. This is particularly critical as plan details and healthcare needs can change annually. Low utilization of Medicare’s information resources further exacerbates this issue, hindering beneficiaries’ ability to make informed decisions.
Addressing this challenge requires multifaceted strategies. Enhanced outreach and education are crucial, particularly for vulnerable subgroups with lower comparison and review rates. Simplifying plan information and comparison tools can reduce overwhelm and encourage active participation. Promoting awareness and accessibility of Medicare’s information resources is also vital. By empowering Medicare beneficiaries to compare medicare plans effectively, we can ensure they receive the optimal coverage to meet their healthcare needs and financial circumstances. Encouraging beneficiaries to utilize resources like Medicare.gov and the 1-800-MEDICARE helpline can significantly improve their understanding and decision-making during the crucial Open Enrollment Period.
