More Choice Leads to More Confusion for Medicare Patients

From 1999 to 2001, researchers at the University of Chicago Center for Health Administration Studies performed literature and data analyses aimed at describing the physical, cognitive and social factors that could impact elderly Americans' ability to act as informed consumers under the Medicare+Choice program.

Medicare+Choice, a program created by the Balanced Budget Act of 1997, expands options for receiving Medicare coverage through a variety of managed care plans. In 2003, Congress passed the Medicare Modernization Act, which included changes in payment rates to participating Medicare+Choice plans and renamed the program Medicare Advantage.

Key Findings

Based on an analysis of some 100 books and articles on decision-making, aging and disability and agency theory (theories concerning proxy agents for elderly individuals), researchers concluded that a number of factors could hinder elderly Americans' ability to act as informed consumers under Medicare+Choice:

  • Physical and cognitive impairment.
  • Difficulty accessing and understanding health plan information.
  • Influence by family members, friends and/or employers who are not equipped to help them make the right decision, or the complete absence of outside support.
  • Deleterious changes in their situation over time.


Subsequently, researchers used data from an existing data source — the Asset and Health Dynamics Among the Oldest Old (AHEAD) survey—to better understand the prevalence of limitations such as physical limits, cognitive deficits and lack of family support among the elderly.

  • Contrary to expectation, they found little overlap among the three categories. According to researchers, this suggests that there are different subgroups among the elderly who may need different kinds of support to make fully informed choices under Medicare+Choice.