Each year, people with Medicare have the opportunity to review their coverage options and change plans during the open enrollment period (October 15 to December 7). Medicare beneficiaries with traditional Medicare can compare and switch Medicare Part D stand-alone drug plans or join a Medicare Advantage plan, while enrollees in Medicare Advantage can compare and switch Medicare Advantage plans or elect coverage under traditional Medicare instead. For 2021, the average Medicare beneficiaries can choose among 33 Medicare Advantage plans and 30 Part D stand-alone prescription drug plans (PDPs).

Medicare Advantage and Part D plans vary significantly from each other in terms of costs and coverage. Plans often change from one year to the next, which could lead to unexpected and avoidable costs for beneficiaries who do not review their options annually. Plan changes can also lead to disruptions for beneficiaries in Medicare Advantage plans, if their doctors do not remain in their plan’s network from one year to the next, or if their drug plan no longer covers one of their medications, or makes a change in their pharmacy network, or increases costs for covered drugs. Further, beneficiaries’ health care needs, including the list of drugs they take, can change from one year to the next, making it even more important to compare coverage options annually, as the Centers for Medicare & Medicaid Services (CMS) recommends.

Previous KFF analysis shows that only a small share of Medicare beneficiaries voluntarily switch plans. This “stickiness” may indicate that beneficiaries are satisfied with their current coverage, but it may also indicate that many people on Medicare find it difficult to compare plans, are unaware of the open enrollment period, or are not confident in their ability to select a better plan. This analysis builds on previous KFF work by examining beneficiaries’ knowledge and behavior related to the Medicare open enrollment period, based on an analysis of the 2018 Medicare Current Beneficiary Survey (the most recent year available). All reported results are statistically significant.

Findings

More than Half (57%) of Medicare Beneficiaries Do Not Review or Compare Coverage Options Annually

In 2018, 43% of all Medicare beneficiaries reported they review or compare Medicare coverage options at least once every year, and 57% reported that they do not review or compare options annually. This latter group includes 24% who never compare plans, 22% of beneficiaries who rarely compare plans, 8% who compare once every few years, and 3% who compared only once when they first signed up for Medicare or their Prescription Drug Plan (Figure 1; Table 1).

Figure 1: More Than Half of Medicare Beneficiaries Report They Do Not Review or Compare their Coverage Options Annually

The share of Medicare beneficiaries who do not annually review their coverage options is higher among people ages 85 and older, with lower incomes, lower education levels, and in fair or poor health (Figure 2).

Figure 2: A Larger Share of Medicare Beneficiaries Who Are Older, With Lower Incomes, Lower Education Levels, and in Fair or Poor Health Do Not Compare Their Coverage Options Annually, Compared to Beneficiaries Overall

More specifically:

  • Two-thirds of Medicare beneficiaries age 85 and older (66%) reported they do not review coverage options annually compared to 56% of beneficiaries age 65 to 74. As many as 33% of people 85 and older say they never review their coverage options.
  • A larger share of Medicare beneficiaries with incomes less than $10,000 a year said they do not review coverage options annually than compared to people with incomes of more than $40,000 (63% versus 56%).
  • Nearly two-thirds of Medicare beneficiaries with less than a high school education (63%) reported not reviewing coverage options annually compared to 53% of individuals with a bachelor’s degree or higher. One-third (33%) of people with Medicare with less than a high school degree say they never review their options.
  • A larger share of beneficiaries in fair or poor health reported they do not review coverage options annually compared to individuals in good, very good, or excellent health (61% versus 56%).
  • In 2018, 61% of beneficiaries in traditional Medicare said they do not review coverage options annually; among Medicare Advantage enrollees, the share was lower (51%).

One in Three Medicare Beneficiaries Report Difficulty Understanding the Program or Comparing Coverage Options

While most people on Medicare say it was very easy (23%) or somewhat easy (46%) to understand the Medicare program, about one in three people with Medicare overall (30%) said the Medicare program was somewhat difficult (23%) or very difficult (7%) to understand, with larger shares for specific subgroups (Figure 3; Table 2).

Figure 3: About One-third of Medicare Beneficiaries Report Difficulty Understanding the Medicare Program, While Some Groups Report Higher Rates

More specifically:
  • A larger share of Medicare beneficiaries under the age of 65 with long-term disabilities reported it was somewhat or very difficult to understand the Medicare program, compared to those 65 to 74 (38% versus 30%)
  • Four in ten (41%) Medicare beneficiaries in fair or poor health reported it was somewhat or very difficult to understand the Medicare program, compared to 28% of beneficiaries in good, very good, or excellent health.
  • Similarly, 38% of Medicare beneficiaries with five or more chronic conditions reported it was somewhat or very difficult to understand Medicare, compared to a quarter (26%) of beneficiaries with one or no chronic conditions.

Half (55%) of Medicare beneficiaries reported it was very easy (16%) or somewhat easy (39%) to review and compare their Medicare options, while one in three overall (33%) said it was somewhat difficult (24%) or very difficult (9%), and 12% reported they do not make decisions about their coverage options (Table 3). A larger share of Medicare beneficiaries who are under the age of 65 with long-term disabilities and beneficiaries in fair or poor self-assessed health reported reviewing their Medicare coverage options was somewhat or very difficult.

Most Medicare Beneficiaries Do Not Use Medicare’s Official Information Sources

  • More than one-third (38%) of people with Medicare said they (or someone for them) had ever visited the official Medicare website for information, but a larger share (44%) said they had never visited the website, and the remainder reported they did not have access to the internet or had no one to access it for them (18%) (Figure 4).
  • More than a quarter (28%) of all Medicare beneficiaries reported they had ever called the 1-800-MEDICARE helpline for information, but a much larger share (53%) reported they had never called, and another 19% said they were not aware the 1-800-MEDICARE helpline existed.
  • Half (50%) of Medicare beneficiaries reported they had read thoroughly or some parts of the Medicare & You handbook, while almost one-third (32%) reported they had not read it at all. Nearly one in five (19%) Medicare beneficiaries reported they did not receive it or did not know if they had received it.

Figure 4: Most Medicare Beneficiaries Do Not Use Medicare’s Official Information Resources

Discussion

The marketplace of Medicare private plans operates on the premise that people with Medicare will compare plans to select the best source of coverage, given their individual needs and circumstances. Past KFF analysis, based on focus groups, has revealed that many Medicare beneficiaries know about the open enrollment period, are generally aware that they should compare plans, but find the process of comparing plans challenging. This analysis, based on survey data, finds that most beneficiaries do not compare coverage options each year. In fact, nearly half never or rarely compare their Medicare health coverage options. We also find that the very people who may have the most at stake during the open enrollment period, such as those in relatively poor health, are least likely to compare their plan options, which can lead to unanticipated outcomes, such as higher out-of-pocket costs. Moreover, a relatively small share of beneficiaries uses Medicare’s official information resources which are designed to support informed decision-making.

With a growing number of Medicare private plan choices available each year, the fact that such a large share of seniors and people with disabilities are not comparing coverage options each year warrants attention, given the potential consequences of these decisions.

Tables

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