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In the months before and years since Medicare Part D’s implementation in January 2006, many have been concerned with beneficiaries’ ability to benefit from the complex program. We undertook a systematic review of published Medline and grey literature from January 1, 2005 -August 20, 2009 in order to evaluate Medicare beneficiaries’ knowledge about Part D and how this knowledge informed decisions regarding enrollment and plan choice. We included 30 articles that reported original results describing either seniors’ knowledge of the Part D benefit, decision to enroll, and/or selection of plans, that reported results from patient surveys addressing these issues, or that analyzed actual enrollment data or plan selection patterns. Of these 30 articles, 10 described beneficiaries’ knowledge, 12 described enrollment and plan choices and 8 concerned both knowledge and choice. Across studies and years, beneficiaries’ knowledge of the Part D program and benefit structure/design was poor, particularly with regards to the coverage gap and the low-income subsidy. Beneficiaries had great difficulty choosing the lowest cost Part D plans and were disinclined to switch plans to improve their benefits. Knowledge deficits, enrollment problems, and plan choice difficulties were most pronounced during Part D implementation in early 2006, but also persisted in subsequent years of the benefit. Beneficiaries’ knowledge and choices should be monitored on an ongoing basis to inform potential changes to the Part D program.
The implementation of Medicare Part D in January 2006 offered seniors improved access to prescription drug insurance. At least one-quarter of elderly Medicare beneficiaries had no previous drug insurance,1 and 22.5 million beneficiaries (53%) were enrolled in the benefit by June 2006.2 In the months prior to Part D’s inception, and in the months and years since, researchers, policymakers, and patient advocates have fiercely debated elderly beneficiaries’ ability to navigate and benefit from the unique features of the Medicare Part D program.3, 4 Many have complained that the benefit is too complex:3 the benefit is administered by numerous private insurers; seniors must choose among over 40 plans in each geographic area;5 each plan uses an array of drug formulary and cost sharing mechanisms6 which insurers may change at any time;7, 8 and the standard benefit includes a gap in coverage during which beneficiaries are responsible for 100% of drug costs (the coverage gap).9 Beneficiaries with incomes below certain thresholds can apply for a low-income subsidy (LIS) to help ease the cost-sharing burden, but this process can be cumbersome and confusing.10 The intricacies of the Part D benefit may present information challenges for even the savviest Medicare beneficiary.
In this systematic review, we evaluate data from 2005 to the present regarding beneficiaries’ knowledge about Part D both before and after the benefit began. We examine how beneficiaries used their knowledge to choose Part D plans and the extent to which beneficiaries’ plan choices were aligned with their health and financial interests. We also assess beneficiaries’ responses to sub-optimal plan choices when they have the opportunity to switch plans. We discuss our findings’ implications for the future of the Part D program.
A systematic search of the medical literature was performed to identify studies addressing seniors’ knowledge of the Medicare Part D prescription drug benefit, their choice to enroll, and their selection of Part D plans. The initial searches were limited to articles published in Medline between January 1, 2005, one year before the Part D benefit was implemented, and August 20, 2009. Our search used three main subject heading domains: terms relating to Medicare Part D (for example, [Medicare AND drug benefit OR drug plan OR prescription], OR Part D, OR Medicare Modernization Act, OR MMA), terms relating to knowledge (for example know$, OR understand$, OR comprehen$) and terms related to decisions to enroll or plan selection (for example: choice, OR choose, OR enroll$, or participat$, OR decide, OR select$, OR access, OR, utiliz$). Articles containing at least one search term regarding Part D and at least one search term from one of the other two categories were included in the review.
We also searched the “grey literature” for original reports using the same criteria. Our search included the websites of the Kaiser Family Foundation, General Accounting Office, Families USA, Congressional Budget Office, Centers for Medicare and Medicaid Services (CMS), Congressional Testimony, AARP, the Commonwealth Fund, and Avalere Health. We reference mined articles included from our initial search and sought input from an expert at CMS (A.B.) who had accumulated relevant articles.
Articles were included if they reported original results describing either seniors’ knowledge of the Part D benefit, their decision to enroll, and/or selection of plans. Articles were included if they reported results from patient surveys explicitly addressing these issues or if actual enrollment data were analyzed and plan selection or enrollment patterns were reported. We excluded all studies in which plan choice was simulated or modeled based on data prior to 2006.
Two reviewers [W.S. and U.S.] evaluated the titles and abstracts of search results to identify potentially relevant articles. Complete articles were assessed for inclusion by two reviewers [J.P. and U.S.]. Data was extracted from selected articles by three reviewers [J.P., W.S., U.S.] and differences were resolved by consensus. Variables assessed included the key research questions in each study, characteristics of the patient population (i.e., sample size, sociodemographic characteristics), setting, study design (analysis of enrollment data or patient survey), results, and conclusions drawn.
Articles were grouped into 2 main categories: seniors’ knowledge about Part D plans and their choice of plans. We created evidence tables reporting results from each of these searches, one focusing on knowledge and the other focusing on choice. Several studies reported data relevant to both research questions and the relevant data from those studies were included in both tables. Based on common themes identified across articles, we further grouped studies into those that described knowledge of 1) the Part D program, 2) Part D’s benefit structure, cost sharing, and formularies, and 3) the low-income subsidy as well as those that described choices regarding 1) enrollment in Part D, 2) in which Part D plan to enroll, 3) switching Part D plans.
Of 489 potentially relevant abstracts and titles screened, 76 articles were evaluated in full, and 30 articles met all inclusion and exclusion criteria (Figure 1). These articles can be categorized as follows: 10 described beneficiaries’ knowledge of Part D,11–20 12 described beneficiaries’ Part D choices,18, 21–31 and 8 articles concerned both beneficiary knowledge and choice.32–39 Of the selected articles, 14 were from the peer-reviewed medical literature while the remaining were from the grey literature.
In each study, especially in the months surrounding Part D implementation, Medicare beneficiaries reported confusion about the Part D program. Among 784 beneficiaries surveyed in October-December 2005, 56% described having limited awareness of the upcoming changes to the Medicare program, and 53% did not know that all Medicare beneficiaries were eligible for Part D.36 Of 1500 respondents to 2 telephone interviews in November 2005 and May 2006, 34% said they poorly understood the Part D benefit.35 In a 2005 web-based survey, researchers found greater knowledge gaps among beneficiaries with a combination of low socio-economic status, bad health, and low cognition—54.3% of these beneficiaries had little or no knowledge about Part D plans.20 Differences in beneficiaries’ knowledge by race were also noted: in interviews with 2,694 community-dwelling elderly in the Chicago area in 2006–2007, researchers found that among non-enrollees, Blacks were more likely than Whites to report having been unaware of Part D (13.2% versus 2.4%) and that the program was too difficult to understand (12.9% versus 1.4%).38
A majority admitted large gaps in their knowledge of and confusion about Part D’s benefit structure, particularly regarding the coverage gap. A 2007 mailed survey to beneficiaries of Kaiser Permanente Part D plans found that only 22% of high-spending respondents knew whether their plans had a coverage gap.11 In a separate 2007 survey, Hsu and colleagues found a larger percentage of beneficiaries (40%), knew about the coverage gap, but only 50% of those were able to state the monetary threshold to enter the coverage gap within $250.16 Even when beneficiaries were aware of the coverage gap, they frequently indicated that they did not understand how it worked or how to know whether they were at risk of entering the gap.34 Beneficiaries also reported confusion about the cost-sharing structures and formulary coverage of their plans, such as how their out-of-pocket costs were determined for each prescription purchase.13, 33
At the time of Part D implementation and in later years, beneficiaries demonstrated a lack of awareness about the LIS and misperceptions about their eligibility and how to apply. Nearly one-third of community-dwelling elderly in a 2005 telephone survey thought that only dually-eligible beneficiaries could receive the LIS.36 In an electronic survey in Fall 2006, over 75% of professionals who counsel Medicare beneficiaries reported that beneficiaries were not aware of the LIS benefit, and 83% stated that beneficiaries often did not know how to apply or did not think they were eligible.19 One-half of community-dwelling elderly in a 2007 telephone survey had heard of the LIS, and only 10% thought that they would qualify for the assistance.18 Only 12% of LIS-eligible beneficiaries in a large mailed survey in 2007 thought they would qualify for the extra help.39
According to a 2006 national survey of 16,072 community-dwelling seniors, 61% of respondents who did not have drug coverage in 2005 enrolled in Part D plans in 2006.29 These findings are consistent with those of the Retirement Perspectives Study: 68.1% of respondents were enrolled in a Part D plan in 2006, 24.5% had other creditable coverage, and only 7.4% lacked any drug insurance.35 Of 22.5 million Part D enrollees as of July 1, 2006 nationwide, 16 million (71%) were enrolled in a stand-alone plan while 6.5 million (29%) were enrolled in a Medicare Advantage plan. As of February 1, 2009, 17.5 million (66%) Part D enrollees were enrolled in a stand-alone plan and 9.2 million (34%) were enrolled in a Medicare Advantage plan.31 Enrollment in stand-alone plans was higher in rural than in urban areas (21% versus 13%), reflecting the more limited presence of Medicare Advantage Part D plans in rural areas.27 Seniors listed the most important reasons they enrolled, which included: 1) enrolling seemed less costly than waiting, 2) high drug costs, 3) anticipated financial savings, and 4) turning 65.18, 25, 39 Of all Part D enrollees in one 2006 survey, 69% reported feeling “very confident” or “somewhat confident” about having made the right decision to enroll, and 86% of them planned to sign up for Part D again in 2007.26
In many studies, Part D-eligible beneficiaries felt that there were “too many choices” when trying to select a plan and felt overwhelmed by the decision.19, 33, 35–37 Faced with the prospect of choosing a plan, 81% of 3,602 beneficiaries responding to a 2006 mailed survey reported that the specific drugs covered and the premium amounts a plan offered were important to them, while 80% cited the copayment amounts.39 Selecting a plan that covered all of their drugs was also important.33 However, in practice, beneficiaries made few plan comparisons to look for these attributes: in a telephone survey, only 41% of Part D plan self-enrollees reported comparing costs and benefits of different plans, and most compared an average of 4 plans.36
Instead of comparing plans, many beneficiaries chose plans with which they had a prior relationship or from which they had received information through a representative or advertisement.33, 36 In 2006 plan enrollment data, ten insurance companies accounted for 72% of Part D enrollment, and two plans accounted for 23% of Part D enrollment nationwide, the AARP MedicareRX and Standard plans.21 The researchers speculate that high enrollment in the AARP plan was likely due to brand recognition while enrollment in the Standard plan was likely based on its low premium costs.21
Regardless of their plan selection strategy, many beneficiaries did not choose the plan that saved them the most money. An economic analysis of 55,000 seniors’ plan choices revealed that only 6 – 9% chose the lowest cost plan available to them in 2006 and seniors would have saved between $360 – $520 had they chosen the lowest cost plan.22 A face-to-face intervention designed to help 155 Part D beneficiaries choose their optimal plan for the following year found that 90% of beneficiaries were not currently enrolled in their optimal plan and could realize cost savings by switching to a different Part D plan for the following year.30
Despite beneficiaries’ poor plan choices, most expressed little desire to switch plans in order to improve their benefits.32 Reasons for not switching included beliefs that: 1) the plan they have is better than one they don’t know; 2) switching plans is a tedious, overwhelming process; 3) switching plans would actually cause problems; and 4) they cannot switch plans without assistance.34, 37 Even when assistance was available, such as in the open enrollment period intervention, only 55 of 123 (45%) of beneficiaries switched plans. 30 This reluctance to switch persisted throughout all study years. Among interviewees enrolled in a Part D plan in 2006, 62% did not consider switching; 18.4% considered switching but did not; and only 10.7% switched plans for 2007.23 Among 400 respondents to a telephone survey in 2007, 80% planned to keep the same plan in 2008,18 while another poll found that only 19% considered switching plans for 2008.28
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.
National Institute on Aging T32 AG000158 (Ms. Polinski); National Institute of Mental Health R01 5U01MH079175-02 (Dr. Schneeweiss); National Heart Lung and Blood Institute K23 HL-090505 (Dr. Shrank)
Sponsor’s role: The sponsor had no role in the design or analysis of the study or in preparation of the manuscript.
Author contributions: Jennifer Polinski participated in study design, acquisition of data, analysis, and preparation of the manuscript. Aman Bhandari participated in study concept and design, acquisition of the data, and preparation of the manuscript. Uzaib Saya participated in acquisition of the data, analysis, and preparation of the manuscript. Sebastian Schneeweiss participated in the study concept and design, analysis, and preparation of the manuscript. William Shrank participated in study concept and design, acquisition of the data, analysis, and preparation of the manuscript.
Conflict of interest: Dr. Schneeweiss is a paid member of the Scientific Advisory Board of HealthCore and a consultant to HealthCore, WHISCON and RTI. Dr. Schneeweiss is Principal Investigator of the Brigham and Women’s Hospital DEcIDE Center on Comparative Effectiveness Research funded by AHRQ and of the Harvard-Brigham Drug Safety and Risk Management Research Center funded by FDA. Within the past 5 years, Dr. Schneeweiss was funded by an investigator-initiated grant from Pfizer which has ended. Dr. Shrank is the principal investigator for and has research funding from CVS/Caremark and Express Scripts. Dr. Schneeweiss is a co-investigator on and receives research funding from the CVS/Caremark grant. Opinions expressed here are only those of the authors and not necessarily those of the agencies or sponsors. These sponsors had no role in the design or analysis of the present study, nor did they participate in any way in the preparation of the paper.