Most Medicare Beneficiaries Don’t Compare Plans Before Enrolling

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Most Medicare Beneficiaries Don’t Compare Plans Before Enrolling

A large majority of people enrolled in Medicare don’t compare their options before enrolling in or renewing a plan, according to a new report from the Kaiser Family Foundation — potentially resulting in out-of-pocket health care costs that are unaffordable to many people.

In the United States, Medicare is the federal health insurance program for eligible residents ages 65 and older, as well as some people with disabilities. Medicare Advantage plans are private insurance plans that cover the same services — such as doctor visits and hospital stays — as traditional Medicare, along with prescription drug benefits, under one unified plan. In contrast, people who enroll in traditional Medicare — which is directly administered by the federal government — must select a separate prescription drug plan, also known as a Medicare Part D plan. According to the latest report, in 2021 the average Medicare beneficiary in the United States can chose from 33 Medicare Advantage plans or from 30 Part D prescription drug plans that supplement traditional Medicare.

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The report notes that exactly what is covered under Medicare Advantage and Medicare Part D plans, as well as the associated costs, can change from year to year. For example, the list of health care providers in a Medicare Advantage plan’s network may change from one year to the next, resulting in loss of access to a preferred doctor even if the enrollee simply renews membership in the same health plan. At the same time, both Medicare Advantage and Medicare Part D plans may change what prescription drugs they cover and the cost-sharing requirements (deductibles and copayments) for various drugs from one year to the next, so that even if your prescriptions don’t change, your out-of-pocket costs might go up (or down) dramatically. Of course, many people see their health care needs — including prescription drugs — change over the course of any given year, so they may benefit from reevaluating their health plans for this reason.

Majority of enrollees not comparing plans

As noted in a press release on the new report, 71% of Medicare enrollees said that they didn’t compare plans before selecting their coverage options during the 2018 open enrollment period. Among those who were enrolled in Medicare Advantage plans — a total of 21.4 million people in 2021 — 68% said that they didn’t compare plans before enrolling.

Among those enrolled in traditional Medicare — 29.2 million people — 73% didn’t compare plans, showing very little difference between the two groups. What’s more, 81% of Medicare Advantage enrollees and 72% of Medicare Part D drug plan enrollees said that they didn’t compare their current plan’s prescription drug coverage with that of other plans before enrolling. And 47% of all Medicare beneficiaries said that they had never visited the Medicare website for information or guidance, while 53% had never called the Medicare helpline (1-800-MEDICARE [633-4227]) and 31% had not read the official “Medicare & You” handbook that all beneficiaries are supposed to receive.

“The marketplace of Medicare private plans operates on the premise that people with Medicare will generally compare plans to select the best source of coverage, given their individual needs and circumstances,” the report authors wrote. “This analysis finds that most Medicare beneficiaries did not compare plans.” What’s more, many of the people who stand to benefit the most from comparing plans — those who are older or in worse health, or who are under age 65 and have disabilities — were even less likely than the typical Medicare enrollee to compare plans. Taken together, these results show that Medicare plans may not be working as intended to optimize coverage and reduce costs for beneficiaries — and, in fact, the large number of plans and the complexity of comparing them may be deterring most people from making an informed decision.

The latest open enrollment period for Medicare began on October 15, 2021, and runs through December 7.

Want to learn more about saving on your diabetes care? Read “Save Money on Medicines,” “How Your Healthcare Team Can Help You Save on Medications” and “Do’s and Don’t’s for Saving Money With Diabetes.” 

Quinn Phillips

Quinn Phillips

Quinn Phillips on social media

A freelance health writer and editor based in Wisconsin, Phillips has a degree from Harvard University. He is a former Editorial Assistant for Diabetes Self-Management and has years of experience covering diabetes and related health conditions. Phillips writes on a variety of topics, but is especially interested in the intersection of health and public policy.

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