Fully understanding the value of a medical insurance policy can be a daunting task for anyone of any age. But it seems that with Medicare Part D—the prescription drug benefit plan for seniors—the federal government may have created an insurance product so complex that even people who do well in top medical schools find it difficult to make the most cost-effective plan choices, according to new research conducted by Robert Wood Johnson Foundation (RWJF) Investigator Award winner 2005 Yaniv Hanoch, Ph.D.
“When we completed our first study on Medicare Part D in 2006, we found that older adults had difficulty understanding their options under the plan,” said Hanoch, who is currently a lecturer at the University of Plymouth School of Psychology in Plymouth, UK. “But we thought that if they needed help, their doctors could always advise them. Now we know that even doctors do not do well with the plan.”
To assess physicians’ ability to choose the plan that would offer their patients the most complete coverage with the lowest premium, Hanoch and his colleagues tested 100 medical students and residents for their study, “Choice Numeracy and Physicians-in-Training Performance: The Case of Medicare Part D,” which appears in the July issue of the journal, Health Psychology.
“We found that even physicians-in-training perform poorly when faced with a large number of plan choices,” Hanoch said. “In addition, we found that numeracy skills [the ability to understand mathematics and statistics] were needed to evaluate the plans and that perhaps these skills needed to be enhanced in medical students and physicians.”
The Case for Change
“After looking at our study results and considering the 2006 Kaiser Family Foundation research finding that 92 percent of people age 65 or older say Medicare Part D is too difficult to navigate, I think it’s time to change this system,” Hanoch advised. “As it stands, people are not able to make the best use of the prescription benefit.”
Further analysis of Medicare Part D data proves this point. The number of plan participants who take full advantage of their annual option to select more cost-effective coverage is extremely low. “Each year, open enrollment occurs, and people are allowed to choose a new plan,” Hanoch explains. “Yet, only about 10 percent of participants change plans annually, even though in most cases, there are good financial incentives to do so.”
The problem is the time, effort and knowledge of computers needed to get through the plan assessment and enrollment process. First, one must have access to a computer and be well-versed in navigating web pages with many options and functions. “Then, they must enter a great deal of information,” Hanoch adds, “their personal information, the names of all of their medications as well as the dosages of each medication in grams. It takes about 42 clicks or procedures to get to the range of options. Just imagine how difficult this would be for someone taking three to five medications, as many elderly people do. After these steps, the plan options—in most cases about 50—are presented in groups of five. The person is then expected to sort through the trade-offs of each plan based on costs, while figuring out the different coverage gaps and whether all of their medications are covered by any given plan.”
And even in cases where physicians are willing to help patients sort through the options, there’s the issue of just how long the process takes. “A physician generally spends 10 to 15 minutes with a patient during the average office visit,” Hanoch said. “To complete the Medicare Part D plan selection, the doctor would need about a half hour, at least.” Expecting a doctor’s assistance becomes even more unrealistic if he or she sees a great many Medicare patients or works in a clinic setting.
“My chief concern, after completing years of this work with the support of my RWJF grant, is that any plan to improve Medicare Part D will be placed on the back burner because of the overhaul of the health care system. This is truly a shame, because the problems people are having with this system are not going away. The government should consider standardizing the program in some way or at least reducing the number of plan options.”
The Robert Wood Johnson Foundation Investigator Awards in Health Policy Research support innovative projects from scholars in a wide range of fields. The program is one of the few funding opportunities for cutting-edge researchers who explore new ways to improve the nation’s health care system by finding solutions to significant health policy challenges.