How Much Choice is Too Much?
A study that presented groups of participants with varying numbers of prescription drug plans found that a greater selection of plans decreased the likelihood a participant could identify the plan that minimized total costs.
The prescription drug component of Medicare allows beneficiaries to choose from more than 50 prescription plans. This research brief reports on a study that tested whether increasing the number of available prescription plans affected the ability of beneficiaries to make cost-effective decisions. The evaluation presented 192 participants with sets of hypothetical prescription drug plans. Researchers separated participants into three groups that contained three, 10, or 20 available plans. Each set contained simplified versions of Medicare prescription plan options. Participants answered questions related to the cost of each plan and the confidence with which they made their selections.
- Older adults were less likely than younger adults to choose the optimal plan in their group. However, older adults expressed more confidence in their selections.
- Participants choosing from a greater selection of plans were generally less able to provide correct answers to questions about their selection of plans.
A limitation to the study could be the high education level of its participants.