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How are Seniors Choosing and Changing Health Insurance Plans?

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

In each focus group a few people had either changed plans at some point or were considering changing plans soon, but the vast majority had not and were not considering doing so. There was general consensus that they are resistant to changing plans. Choosing plans is an unpleasant task they try to avoid. Additionally, they view changing as risky. Focus group participants did not think the “grass was greener” in other plans and were wary of unknown aspects of other plans.  Even if they were not 100% satisfied with their plans, they felt more comfortable staying with what they knew.

There are days when I look at a plan, or look at my plan, and I think about possibly making a change, depending upon what’s out there for me … I’ve reached the age of 78 and I’m saying to myself, “I’m too goddamn tired to investigate this.”
-PDP Beneficiary (Baltimore, MD)

For the most part, people seem to be satisfied (enough) with their plans. Many invested some time and effort in making their initial choice and would need a major reason to revisit that choice. Most have various complaints about their plans, but very few have issues that seem major enough to make them reconsider their options and go back to square one.

Comparing and choosing plans the first time was frustrating enough, and they are reluctant to do it again

Choosing insurance plans is a frustrating, overwhelming process for most.

Beneficiaries describe the choice process as difficult and overwhelming. They receive lots of information from Medicare, insurance plans, insurance agents, friends, and others, and they do not know how to navigate through it all. They find it difficult to compare plans because there are so many details and the information across plans is not presented in a standardized way.

Many say they do not feel confident to make the right choice and just do the best they can. Most would like more help from trusted sources in the process and are grateful for the help they receive from knowledgeable people, especially in-person help from insurance agents and plan representatives.

And because I feel that I did my homework to the hilt initially, that should remain good for me.  If it is up and pricey, that’s okay. I don’t gamble. I am not a gambler.
-PDP Beneficiary (Baltimore, MD)

For most, choosing their initial plan was a very complicated process. The thought of doing all of that again was not appealing. Even the savviest of beneficiaries admit that they find all of the plan information overwhelming and are not sure how to go about choosing another plan again. People who have relationships with insurance agents seem less resistant to change for this reason; they have someone who they feel like they can call and just ask, “Is there something better out there for me?” But even these people are resistant to the idea of changing if there is no major issue with their current plan.

Open enrollment is not typically viewed as an opportunity to find a better quality or more affordable plan.

Open enrollment is viewed by many as a time to change plans only if they are unhappy with their current plan.  Even though the focus groups occurred during open enrollment, most admit they were not reviewing their plan choices and intended to stay put in their current plans. To consider changing plans, it seems that beneficiaries need to be frustrated with some aspect of their current plan. Only then would most people look into other options.

Open enrollment is only once per year and timing may not be ideal.

I think the older you get, the more resistant you are to change in general. There’s that comfort level, also. I wouldn’t want to keep going from one plan to another. There would have to be a big reason.
-PDP Beneficiary (Seattle, WA)

At our age as we get older we learned that the grass is not really greener on the other side.  We’re very cautious about changing to something else that is unfamiliar when we have that [which we] know in front of us.
-PDP Beneficiary (Tampa, FL)

It is important to point out that timing matters when it comes to changing plans. While many people have complaints about their plans, often times the issues arise when the open enrollment period is still in the distant future. In the meantime, they cope – they swallow the extra cost, they find a tolerable workaround, they go without seeing a particular doctor, and so on. For some, it seems that by the time open enrollment comes around, they are not as concerned about the issue as they were initially. They become accustomed to managing and as a result may not end up changing plans. If problems arise or persist during open enrollment, it seems people are much more open to considering changing plans. It becomes a top of mind issue that they feel like they can address immediately.

Change is not perceived as a good thing. Changing plans potentially disrupts their care, which may cause anxiety.  Seniors who use a lot of services are used to going to their preferred pharmacy, their chosen providers, and obtaining the medications they need.  They do not want to risk upsetting a pattern of care that is working well for them, even if there are problems with their plans.  There is a feeling among many seniors that they will be worse off if they leave their current plans.

Newer isn’t always perceived as better.  When it comes to changing plans, many express a view along the lines of “the grass isn’t always greener on the other side.” They say there will always be trade-offs and no plan will meet all of their needs all of the time. Given this reality, it is better to avoid the hassle of changing plans and to stick with what they know.

Beneficiaries are more likely to change their care before their plan

Most will go to considerable lengths to make their existing plan work.

If you can find an alternative [drug] through your doctor, try something else. Then you make the decision whether you need to change your plan.
-PDP Beneficiary (Baltimore, MD)

I figure if someone has gone through medical school and has their diploma on the wall, chances are they know enough about what is wrong with me to treat me. I’m not that committed to one particular doctor. Now if I get some serious ailment I may change my mind overnight.
-Medicare Advantage Beneficiary
(Tampa, FL)

Beneficiaries seem willing to do just about anything to make their existing plans work. When problems arise, they seek workarounds. This seems especially true for people with Part D plans. For example, if a medication they need is not covered, they will try a number of workarounds, including the following: asking their doctor for an alternative drug or a generic version, seeking samples from their doctor’s office, applying for discounts from drug manufacturers, making appeals to their insurer, and ordering medications from Canada or online.

Many focus group participants in Medicare Advantage plans were also willing to give up their primary care physician. Some said that if their doctor was no longer in their network, they would probably just find another doctor rather than change plans. They explained that if they were happy with the other aspects of their plan, this was something they could live with. Additionally, a few made the point that which doctors participate in which networks changes so often that it would be impossible to follow your doctor around all the time.

Cost increases are expected

Most seniors view cost increases as inevitable. 

Get mad and pay.
-Medicare Advantage Beneficiary
(Seattle, WA)

The cost of a lot of things and these plans keeps creeping up.  It is a matter of when our own personal circumstances reach that point.
-PDP Beneficiary (Baltimore, MD)

They are not surprised by increases in premiums or co-pays. They expect this. Most seem very willing to tolerate increases in monthly costs (be it for their premium, co-pays on medication, or other costs) up to a point. When the increase starts reaching around $75 more a month, most say they would consider looking into new plans. The tolerance for cost increases seems particularly high among those with PDPs.

Sometimes they view lower costs with a suspicious eye.

Most explain that they would be suspicious if there was ever a reduction in their premium from one year to the next. They are accustomed to price increases. A decrease would alarm them and make them think it is a sign of changes made to the plan like less coverage, higher co-pays, or limitations on their choice of pharmacies or providers.

Additionally, some beneficiaries associate higher prices with higher quality and therefore assume that if a plan costs more, you must be getting more for your money. Indeed, some in traditional Medicare say they are suspicious of $0 premium plans; they say it raises red flags about the quality of the plan. It is important to note, however, that many people with Medicare Advantage plans had $0 premium plans and did not express these types of concerns.

Many are not aware of their options

Among people in traditional Medicare, many were not aware of the choice between traditional Medicare and Medicare Advantage plans.  

Heard of [Medicare Advantage], but I know nothing about it.
-PDP Beneficiary (Baltimore, MD)

It seems that most just ended up in traditional Medicare or a Medicare Advantage plan without having made a conscious choice between the two options, and low levels of knowledge remain a problem. Those with traditional Medicare seemed particularly unaware of the choice; most did not know anything about Medicare Advantage plans. A few had heard negative things about them, such as the belief that many doctors do not accept them. Many seem resistant to the idea of having a limited network and giving up some choice on providers. Others feel that Medicare Advantage may be worth looking into as long as their primary care physician or other valued doctors participate in it.

There was more awareness of the choice among people who had Medicare Advantage plans, although many also seemed to have just landed in their plan without having necessarily deliberated the difference between this option and traditional Medicare. In many cases, they chose their plans based on the recommendation of an insurance agent or friend. Some of these beneficiaries express frustration with their limited network, but most are satisfied and say they like having everything in one plan and having access to centers where they can get all the care they need in one place. Many also like having the option to get dental and vision coverage and the extra benefits like gym access through Silver Sneakers.

For most, the amount of information ends up being overwhelming and difficult to sift through. They do not feel as though they can make sense of it all and make a good decision on their own, so they seek help from other sources.

Some are simply uninformed about their plan options.

Some people seem uninformed about the choices they have. A few people, for example, do not understand that they are allowed to change plans during the open enrollment period. Some think that there are not many differences across plans except in terms of cost; they think most plans offer the same coverage and services. And as previously mentioned, most people in traditional Medicare do not know much (if anything) about Medicare Advantage plan options.

What factors lead beneficiaries to not be enrolled in the “lowest cost” health plan? What drives some people on Medicare to switch plans?

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Filling the need for trusted information on national health issues, the Kaiser Family Foundation is a nonprofit organization based in Menlo Park, California.