Complex Medicare Advantage Program May Overwhelm Seniors

The large variety of managed care plans offered by the Medicare Advantage program may be counterproductive.

The large variety of managed care plans offered by the Medicare Advantage program may be counterproductive, according to the results of a new study conducted by researchers from the Harvard Medical School’s Department of Health Care Policy. The study found that elderly patients, particularly those with low cognitive ability, often make poor decisions, or no decisions at all, when faced with an overwhelming number of complex insurance choices. One problem with that is that those with impaired cognition may benefit most from the more generous coverage often offered by Medicare Advantage plans.

“We are providing the most complex insurance choices to the very population that is least equipped to make these high-stakes decisions,” J. Michael McWilliams, MD, assistant professor of health care policy and medicine at Harvard Medical School, said in a press release. “Most other Americans choose from just a few health plans, but elderly Medicare beneficiaries often have to sift through dozens of options,” added McWilliams, who is also a practicing general internist in the Division of General Medicine at Brigham and Women’s Hospital. The study was published online ahead of print in Health Affairs.

The Medicare Modernization Act of 2003 initiated a series of payment increases to the Medicare Advantage program that dramatically increased the number of private plans participating in the program and encouraged plans to compete for enrollees by offering lower premiums and more generous benefits.

McWilliams and his team looked at 21,815 enrollment decisions from 2004 to 2007 made by 6,672 participants in a national longitudinal survey and compared enrollment decisions between participants with different cognition levels and different plan offerings in their area.

The researchers found that, on average, an increase in the number of plans was associated with increased Medicare Advantage enrollment, provided the number of available plan options was fewer than 15. When the number of options surpassed 30, as it did in 25% of US counties, such increases were actually associated with decreased enrollment. More importantly, beneficiaries with low cognitive function were substantially less likely than their peers with high cognitive function to appreciate the advantages offered by these plans, choosing to remain in the traditional Medicare program instead.

The authors suggest the reason for lower enrollment could be that beneficiaries became overwhelmed and chose traditional Medicare by default. Furthermore, elderly Medicare beneficiaries with limited cognitive abilities may have difficulty identifying the most valuable option from a complex set of Medicare alternatives. This is particularly concerning given the high and rising prevalence of cognitive impairment and dementia in the aging Medicare population.

SourceComplex Choices in Medicare Advantage Program May Overwhelm Seniors, Study Finds [Health Affairs]