No Itch to Switch: Few Medicare Beneficiaries Switch Plans During the Open Enrollment Period

This analysis examines the share of people enrolled in Medicare Advantage plans with prescription drug coverage (MA-PDs) and those in Part D stand-alone prescription drug plans (PDPs) who switched plans during the Medicare annual open enrollment period (October 15-December 7) from 2007 to 2016. The analysis is based on a five percent sample of beneficiaries for 2007 to 2016 and a twenty percent sample for 2017 from the Master Beneficiary Summary File of the Centers for Medicare & Medicaid Services (CMS) Chronic Conditions Data Warehouse. We estimate the share of enrollees who switched plans voluntarily and involuntarily and who did not switch plans between December of year 1 (for example, 2016) and January of year 2 (for example, 2017). An involuntary switch is considered to be an enrollee whose plan exits the market, who is not crosswalked into a different plan, and who has to sign up for a different plan. For this analysis, an enrollee whose plan exits the market but who is crosswalked into a different plan is counted in the “did not switch” category since this beneficiary did not take voluntary action to switch plans.

This analysis focuses only on enrollees who switch plans during the annual Medicare open enrollment period for the coming plan year and is therefore not directly comparable to some of our prior analyses examining switching rates that occurred over the course of the year, not limited to the annual open enrollment period. People on Medicare have other opportunities outside of the annual open enrollment period to change their plan or coverage. Examining switching rates during the open enrollment period produces somewhat lower estimates of the rate of switching than looking over the entire calendar year.

The analysis of switching rates excludes: (1) people with end-stage renal disease (ESRD) because they were generally not allowed to enroll in Medicare Advantage plans; (2) people in plans sponsored by unions or former employers because they typically cannot switch plans and maintain their retiree health benefits; (3) people who died in the year of the open enrollment period; (4) beneficiaries who switched into traditional Medicare without Part D or a Medicare Advantage plan that does not offer the Part D drug benefit (MA-only plans); (5) beneficiaries not enrolled in both Medicare Parts A and B as of November in the year of open enrollment; and (6) low-income subsidy enrollees, who face different enrollment decisions than non-LIS enrollees due to having a more limited set of PDP choices (i.e., premium-free “benchmark” plans) in order to avoid paying a premium, and because many in PDPs are auto-assigned to new plans every year by CMS; they were excluded from Medicare Advantage plans to conform with the PDP analysis.

Additionally, we conducted an analysis of the CMS Medicare Current Beneficiary Survey (MCBS) 2017 Survey File in order to address: 1) how easy or difficult it is for Medicare beneficiaries to review and compare Medicare options; and 2) how often do Medicare beneficiaries review or compare Medicare options. The MCBS analysis excludes Medicare beneficiaries who lived in long-term care facilities at any point during 2017.

Data Note