Medicare Advantage Programs Overwhelm Senior Citizens with Complex Choices
Elderly often have to sift through dozens of options; those with cognitive problems might benefit most from MA
Aug. 18, 2011 - In health care, more choice may not always lead to better choices, particularly for the elderly. In a new
study, researchers from Harvard Medical School's Department of Health Care Policy found that the large variety of managed care plans offered
by the Medicare Advantage program may be counter-productive. Elderly patients, particularly those with low cognitive ability, often make poor
decisions - or no decisions at all - when faced with an overwhelming number of complex insurance choices.
Ironically, those with impaired
cognition may benefit most from the more generous coverage often offered by Medicare Advantage plans.
"We are providing the most complex insurance choices to the very population that is least equipped to make these
high-stakes decisions," says J. Michael McWilliams, assistant professor of health care policy and medicine at Harvard Medical School and a
practicing general internist in the Division of General Medicine at Brigham and Women's Hospital.
"Most other Americans choose from just a few health plans, but elderly Medicare beneficiaries often have to sift through
dozens of options."
The study appears online today in the journal Health Affairs. It will also appear in the September print edition
of Health Affairs.
The Medicare Modernization Act of 2003 initiated a series of payment increases to the Medicare Advantage program. These
payment hikes dramatically increased the number of private plans participating in the program and encouraged plans to compete for enrollees by
offering lower premiums and more generous benefits, such as prescription drug coverage.
In order to examine the effects of these expanded choices and benefits of enrollment in Medicare Advantage versus
traditional Medicare, McWilliams and his team looked at 21,815 enrollment decisions from 2004 to 2007 made by 6,672 participants in a national
longitudinal survey, and compared enrollment decisions between participants with different cognition levels and different plan offerings in
The researchers found that, on average, an increase in the number of plans was associated with increased Medicare
Advantage enrollment, provided the number of available plan options was fewer than 15.
When the number of options surpassed 30, as it did in 25 percent of U.S. counties, such increases were actually
associated with decreased enrollment.
More importantly, beneficiaries with low cognitive function were substantially less likely than their peers with high
cognitive function to appreciate the advantages offered by these plans, choosing to remain in the traditional Medicare program instead.
The authors suggest the reason for lower enrollment could be that beneficiaries became overwhelmed and chose traditional
Medicare by default. Furthermore, elderly Medicare beneficiaries with limited cognitive abilities may have difficulty identifying the most
valuable option from a complex set of Medicare alternatives. This is particularly concerning given the high and rising prevalence of cognitive
impairment and dementia in the aging Medicare population.
The findings also have important policy implications as health insurance exchanges are established under the recent
national health reform legislation, the Affordable Care Act. These exchanges, the authors say, could be helpful to seniors and the Medicare
program if expanded to handle enrollment in Medicare Advantage plans.
"Efforts to limit choice and guide seniors to the most valuable options could especially benefit those with cognitive
impairments, who without more help appear to be leaving money on the table," McWilliams said. "Better enrollment decisions could in turn
strengthen competition by rewarding high-value plans with more enrollees."
This research was funded by the Beeson Career Development Award Program, National Institute on Aging and American
Federation for Aging Research.
About Harvard Medical School
Harvard Medical School
http://hms.harvard.edu has more than 7,500 full-time faculty working in 11
academic departments located at the School's Boston campus or in one of 47 hospital-based clinical departments at 17 Harvard-affiliated
teaching hospitals and research institutes. Those affiliates include Beth Israel Deaconess Medical Center, Brigham and Women's Hospital,
Cambridge Health Alliance, Children's Hospital Boston, Dana-Farber Cancer Institute, Forsyth Institute, Harvard Pilgrim Health Care, Hebrew
SeniorLife, Joslin Diabetes Center, Judge Baker Children's Center, Massachusetts Eye and Ear Infirmary, Massachusetts General Hospital, McLean
Hospital, Mount Auburn Hospital, Schepens Eye Research Institute, Spaulding Rehabilitation Hospital, and VA Boston Healthcare System.
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