Medicare beneficiaries usually choose a more expensive drug plan than is actually needed for their health conditions, according to a study conducted by the Univeristy of Pittsburgh School of Public Health. The retroactive study, published in the October issue of Health Affairs journal and based on the 2009 data of more than 400,000 Part D participants, found that only 5.2 percent of Medicare recipients selected the most cost-effective Part D drug plan for their health needs, resulting in an average over-spend of $368 a year, the study reported. Even worse, more than one-fifth of members overspent by $500 or more.
The data confirms one of the worries broached when Part D launched in 2006, specifically whether beneficiaries would understand the choices among the different plan options and make appropriate selections. Seniors seem to be overprotecting themselves “by paying higher premiums for plan features that they did not need, such as generic drug coverage in the coverage gap,” study authors noted in an MNT article. Since about 95 percent of beneficiaries did not choose the most cost-effective plan for their own medication requirements, Medicare needs to provide much more assistance and guide resources to help in the choices of options within Part D well prior to benefit anniversary dates, they concluded.
"In particular, government officials could recommend the three most appropriate Part D plans for each person, based on their medication history,” says co-author Yuting Zhang, PhD, associate professor and director of the Pharmaceutical Economics Research Group, University of Pittsburgh School of Public Health. “Alternatively, they could assign beneficiaries to the best plan for them based on their medication needs, while offering them the option to choose another plan instead."
The study authors also hope the findings will have an impact on the ongoing designs of healthcare insurance exchanges, which could offer participants more guidance and keep the list of plan offerings to a reasonable number.