How are Seniors Choosing and Changing Health Insurance Plans?

What drives some people on Medicare to switch plans?

If beneficiaries decide to change plans (or to at least look into new options), the way they go about this is similar to the way they chose their initial plan. They collect information during open enrollment and engage trusted sources to help them navigate it all and make a decision. As during their initial plan selection process, insurance agents play an important role for many.

Beneficiaries’ needs change

Some beneficiaries change plans after incurring higher costs or not getting the care they thought they needed. 

For those who have changed Part D plans in recent years, increasing costs seem to be the main driver. For example, a few people sought new Part D plans because they kept falling into the coverage gap (‘donut hole’) and wanted to find new plans that would help limit their out-of-pocket expenses for medications. Others switched Part D plans because a medication they needed to take regularly was not covered and they could not figure out any workarounds. A few people with Part D plans explained that they eventually switched plans once their premiums had increased year after year.

When my wife fell and broke her leg she was in rehab and [the insurance company] shut her off.  They refused to cover her.  So we both said “Forget this Charlie.”
-Medicare Advantage Beneficiary
(Tampa, FL)

Cost is also an important driver for people with Medicare Advantage plans to change plans. The most common cases mentioned in our focus groups seemed to be situations in which people were looking to save money by either switching to a plan with a very low premium but relatively high co-pays (if they did not use many healthcare services) or moving away from such a plan (if they ended up needing more healthcare than they had originally anticipated). In other words, among this group of beneficiaries, their decision to change plans was more often about choosing a plan that made the most financial sense for them and not usually a reaction to an increase in costs.

Plans change

Higher drug costs, tougher utilization management restrictions, and limited pharmacy networks cause people to change plans.

Many seniors in this study relied on medications to maintain their health.  They often had strong preferences when it comes to their medications – and where they obtain them.

They wanted me on a less expensive statin and I would not change. I would not change. I would not change.  So they kept elevating the price until I finally left them.
-PDP Beneficiary (Baltimore, MD)

Changes in their plan’s drug formulary or which pharmacies are covered are reasons a number of seniors say they would consider changing plans.  Seniors also said that they would change plans if the costs of their drug goes up too much, it is more difficult to obtain their drug due to preauthorization requirements or other restrictions, or if their drug was no longer covered by their plan.  

Learning that a valued doctor or hospital is no longer covered in the plan is a motivating factor to change plans.  While not as common of a motivator as costs, for people in Medicare Advantage plans, finding out that a preferred doctor or hospital is no longer covered by a plan has motivated some people to change or consider changing plans. In some cases, this is about losing access to a primary care physician with whom they have a long-standing relationship. In other cases, it is about losing access to a valued specialist for a chronic condition. Learning that they can no longer access a specific hospital – even if they do not have current needs to go there – has also raised red flags for some people. Some are concerned about infection rates in hospitals as well as making sure they can get the best care for a given condition (again, even if they do not currently have it). One Floridian woman, for example, explained that she was concerned that a particular plan was no longer referring patients to a specialty cancer center even though she did not have cancer.

While most are not that vigilant when it comes to reviewing their plans and considering other options, some are more sensitive to changes in their plans than others. For example, people who have a chronic illness, take multiple medications, or see many specialists are much more aware of the details of their plans and more sensitive to plan changes in coverage and costs. They still tend to be resistant to changing plans, but if a strongly preferred doctor or hospital is no longer covered, they would consider changing. Likewise, if increases in costs pass a tolerable threshold, they are more likely to consider changing.

Why do Medicare beneficiaries tend to stay in the same health plan from one year to the next? What do beneficiaries suggest to improve the system?

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