In this systematic review, we examined studies concerning Medicare beneficiaries’ knowledge of and choices regarding Part D. Beneficiaries reported substantial gaps in their knowledge of the Part D program, including enrollment requirements and the coverage gap period. Part D knowledge differences across race, health status, and cognition group were documented. A conspicuously large group of beneficiaries eligible for a low-income subsidy (LIS) to defray out-of-pocket Part D costs were unaware of this option, did not think they were eligible, or did not know how to apply.
Regardless of their limited knowledge, beneficiaries enrolled in Part D in large numbers and generally expressed confidence in their decisions. However, confusion and lack of knowledge may have translated into poor Part D plan choices. In 2006, only 6–9% of beneficiaries chose the lowest cost plan available to them.22
Even though beneficiaries subsequently had the opportunity to improve upon their initial plan choices, a majority chose not to switch plans.
While the months just before and just after the Part D implementation on January 1, 2006 were marked by greater gaps in knowledge and greater difficulty with plan selection, there are some data from 2007 and 2008 to suggest that these problems persisted in later years. More data are needed from 2007-present to evaluate whether initial difficulties persisted, have been mitigated over time, or if new difficulties have arisen as the marketplace for plans, premiums, deductibles, coverage limits and offerings has shifted.31
Two gaps in understanding were particularly striking and persistent across studies and years: lack of knowledge about the coverage gap and lack of awareness of the low-income subsidy. If beneficiaries are unaware of coverage gap features, then they will make no effort to spend strategically prior to the gap or consider switching to lower cost drug alternatives and will fail to appreciate the advantage of choosing a plan that offers some gap coverage. In the years to come, if the coverage gap period remains part of the Part D benefit structure, improved education of beneficiaries is needed.
The LIS is intended to help those who are most financially vulnerable. At present, an estimated 2.5 million beneficiaries who are eligible for the LIS do not receive it.40
The Medicare Rights Center recommends providing LIS educational materials in multiple languages and at several reading levels to reach out to beneficiaries.41
Groups also advocate minimizing documentation requirements for and/or removing the asset testing process and removing the annual recertification process.42
Other initiatives are underway that may make identifying and targeting LIS-eligible beneficiaries easier. Section 113 of the “Medicare Improvements for Patients and Providers Act,” which takes effect in 2010, mandates improved cooperation between the Social Security Administration (SSA), which handles LIS enrollment, and Medicaid state offices, which administer subsidy programs to cover Medicare Part B premiums and co-payments.43
A recently proposed bill would allow the Internal Revenue Service to share financial records of potentially LIS-eligible citizens with the SSA.41
Despite beneficiaries’ well-reasoned enumeration of plan features that were important to them, they consistently failed to choose the Part D plan with the lowest cost,22, 30
had difficulty comparing plans, and often did not even compare plans at all. 21, 33, 36
Currently, the Medicare Prescription Drug Plan Finder,44
created by CMS, is the only source of comprehensive plan information. The Plan Finder requires that beneficiaries or their caregivers be comfortable with the Internet and able to sift through a vast amount of information and identify the attributes most important to them.45
Therefore, assistance from beneficiary counselors and/or enhancements to the Plan Finder would likely be helpful. In addition, given that older adults generally place most trust in their physician and pharmacists, it is important to provide these professionals with easy to use tools about comparative drug price data and plan features.46, 47
A related finding was beneficiaries’ reluctance to switch to a better plan when they were able to do so. This “inertia,” or preference to remain with the status quo, has been described in the economics literature among consumers choosing a health insurance plan48
and among employees electing to participate in 401(k) plans and allocating retirement savings.49, 50
In the Part D setting, interventions to assist beneficiaries in switching plans may help but cannot remove all barriers: while Patel et al’s intervention offered personnel with the know-how to assist beneficiaries in switching, only 45% of beneficiaries chose to do so. Some inertia may exist because of the relatively high levels of satisfaction Medicare beneficiaries report with the Part D program26
and/or beneficiary reluctance to switch out of plans picked based on brand name recognition or other personal preferences.21
In this systematic review, we assembled studies that examined beneficiaries’ knowledge of and choices with regards to Part D from 2005 to the present. We found that beneficiaries had significant gaps in knowledge, especially about the coverage gap period and the LIS. Even though beneficiaries were generally satisfied with their decisions to enroll in Part D plans, most beneficiaries chose a Part D plan that did not best meet their needs, and few expressed a desire to change their selections when given the opportunity to do so. These difficulties seemed to be most pronounced in the months surrounding the Part D implementation period in early 2006, but persist to some extent in subsequent years as well. As the Part D program continues, policymakers and Medicare advocates must monitor changes in beneficiaries’ knowledge and choices regarding Part D and determine whether improvements in educational outreach or other changes are necessary to enhance understanding and good decision making among Medicare beneficiaries.