NEW YORK (Reuters Health) - Even doctors in training have trouble sifting through insurance options to pick the cheapest available plan, a new study shows.
"I think it confirms some of the issues that folks may have with choosing complicated insurance plans," said Jonathan Gruber.
An economist at Massachusetts Institute of Technology and director of the Health Care Program at the National Bureau of Economic Research, Gruber was not involved in the new report.
The study focused on Medicare Part D plans.
Starting in 2006, the plans gave prescription drug subsidies to people covered by Medicare, the government-run health insurance for the elderly and disabled. Enrollees must choose from 30 or more plans, depending on their home state.
In a recent analysis, only five percent of Medicare beneficiaries had picked the cheapest plan, the authors write.
"About 13 million older adults that have a stand-alone Medicare Part D plan and do not qualify for low-income subsidies are affected by this phenomenon," said Andrew Barnes.
He worked on the study at Virginia Commonwealth University School of Medicine in Richmond.
The researchers asked 70 medical students and residents to pick the cheapest plan for a hypothetical patient, "Bill," from a list of three or nine plans.
For each option, there was information about monthly drug premiums, the annual deductible, number of network pharmacies and estimated annual cost.
Just under half of the participants correctly chose the plan with the lowest estimated annual cost, the authors write in PLoS One.
When there were three choices, two-thirds of the medical students and residents chose correctly. That dropped to one-third when there were nine plan choices.
"Our results reinforce the notion of ‘choice overload' where the more options we have, the more difficulty we have processing and comparing the attributes of these options and making a decision," Barnes told Reuters Health.
"But even if the number of plans available were lower, many Medicare beneficiaries still do not understand the information that is provided," he said.
That is particularly a concern for older people who may have trouble with numbers, Barnes added.
On average, participants who chose a higher cost plan would have Bill spending about $100 more than necessary each year, the researchers found.
Nationwide, 1,169 Part D plans will be available in 2014, according to the Kaiser Family Foundation. Medicare Part D is not part of the Affordable Care Act.
Seniors tend to say total cost is the most important factor in choosing a plan. But some plans cover certain drugs differently, and those parameters can change from year to year, which makes the choice tough.
Medicare has a "cost calculator" on its website, but most people find it very difficult to use accurately, Barnes said.
"Generally, medical students have little training in health policy, and are often not exposed to the business aspects of medicine in their training," Chao Zhou, a health economist at the University of Pittsburgh, told Reuters Health.
Practicing doctors might be better equipped to make coverage decisions, said Zhou, who wasn't involved in the new research.
There are several policy options that might help make the decision easier for beneficiaries, Barnes said. Medicare could selectively contract with fewer plans and reduce the number of options, or present less information about each plan.
"Finally, Medicare itself could estimate which drug plan would be cheapest for beneficiaries given their current drug regimens and automatically enroll them," he said.
SOURCE: bit.ly/16ZCuu2 PLoS One, online October 7, 2013.
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