How are Seniors Choosing and Changing Health Insurance Plans?

The focus group participants included Medicare beneficiaries ages 65 or older who make health coverage decisions for themselves and/or their spouse. Participants included beneficiaries in traditional Medicare, with  Part D stand-alone plan coverage, and beneficiaries enrolled in Medicare Advantage plans.  Because the study focused on decisions around health plans, we excluded beneficiaries with retiree coverage from a former employer or union and beneficiaries dually eligible for Medicare and Medicaid.

The focus groups were conducted in four cities:  Baltimore, Maryland; Memphis, Tennessee; Seattle, Washington; and Tampa, Florida.  The selection of cities was based on several criteria, designed primarily to reflect the variation in Medicare marketplaces across the country, including:

  • the number of Medicare Advantage plans available to beneficiaries.  In 2013, the average Medicare beneficiary could choose from 20 Medicare Advantage plans, 31 PDPs, as well as a multitude of Medigap plans;1
  • the extent to which Medicare Advantage enrollment was concentrated within a small number of companies, as an indicator of the amount of Medicare marketplace competition among insurers.  In 2013, three firms or affiliates accounted for 55 percent of Medicare Advantage enrollment, and similarly, 3 firms accounted for 50 percent of enrollment in PDPs, indicating that enrollment is highly concentrated in many Medicare Advantage and PDP markets;2
  • Medicare Advantage penetration rate, to reflect the diversity of beneficiaries’ familiarity, comfort and experience with respect to Medicare Advantage plans; an
  • the percentage of enrollees in Medicare Advantage plans with prescription drug coverage (MA-PDs) that charged a monthly premium, to help examine whether premiums played a larger role in plan selection in some areas than others.  In 2013, 87 percent of Medicare beneficiaries had access to a MA-PD with no monthly premium, but only 55 percent of Medicare Advantage enrollees were in a plan with no premium, with large variations across counties in the share of enrollees in plans with premiums.3

In addition, to ease focus group recruitment efforts, we identified cities with high percentages of individuals ages 65 and older, and relatively low percentages of beneficiaries dually eligible for Medicare and Medicaid (who were not included in this study) (Table 1).

Table 1.  Profiles of Focus Group Sites
Site Number of stand-alone prescription drug plans (PDPs) offered Number of Medicare Advantage (MA) plans offered Share of enrollees in plans offered by the largest MA Insurer Largest MA Insurer MA penetration rate Share of MA enrollees paying plan premiums Share of population ages 65+ Percent of beneficiaries dually eligible
Baltimore, MD
(Baltimore County)
29 17 66% Cigna 10% 93% 15% 16%
Memphis, TN
(Shelby County)
33 15 32% Cigna 21% 35% 11% 13%
Seattle, WA
(King County)
30 21 34% Group Health Cooperative 32% 63% 12% 15%
Tampa, FL
(Hillsborough County)
34 46 42% Humana 43% 3% 12% 17%
SOURCE: Medicare Advantage penetration rates, number of plans, enrollees by insurer, and percent of enrollees paying plan premiums from KFF analysis of CMS enrollment files, 2013.  Percent of beneficiaries dually eligible from KCMU and Urban Institute analysis of FY2008 MSIS.  Percent of population ages 65 and older from American Fact Finder, U.S. Census Bureau, 2012.

The focus groups were conducted in November of 2013, in order to overlap with the Medicare open enrollment period, which starts October 15 and ends December 7 of each year.  Each focus group included 6-8 participants, differing by age, gender, race/ethnicity, and health status.  After an initial screening, we separated participants into groups of Medicare Advantage enrollees, and beneficiaries covered under traditional Medicare.  In total, we conducted 9 focus groups in 4 cities, and each focus group lasted 90 minutes (Table 2).  In some instances, groups were stratified by income, with the groups comprised of only lower income beneficiaries (below $25,000/individual or $50,000/couple) or higher income beneficiaries, to test whether different income levels would alter the process by which beneficiaries select plans.  Additionally, all Medicare Advantage focus groups included participants enrolled in plans offered by different insurance companies and paying different monthly premiums, with the exception of the focus groups in Tampa where all beneficiaries were enrolled in zero-premium plans.

Table 2. Focus Group Characteristics
Site Traditional Medicare Medicare Advantage Income
Baltimore, MD x Lower income
Baltimore, MD x Higher income
Memphis, TN x Mixed income
Memphis, TN x Mixed income
Seattle, WA x Mixed income
Seattle, WA x Mixed income
Tampa, FL x Mixed income
Tampa, FL x Lower income
Tampa, FL x Higher income



Introduction What factors lead beneficiaries to not be enrolled in the “lowest cost” health plan?

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