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Medicare Advantage Member Plan Switching

By December 13, 2019Commentary

We are near the end of the annual open enrollment period for Medicare Advantage.  While current fee-for-service beneficiaries can take this opportunity to join an MA plan, it is also a chance for those beneficiaries already in a plan to switch.  Different plans may have different costs and other advantages or disadvantages for a beneficiary and there are tools available to help people do this analysis.  So how often do people actually switch?  A timely Kaiser Family Foundation analysis examines this question.   (KFF Analysis)   The analysis covers open enrollment periods from 2007 to 2016 and looks at plan-switching for both Medicare Advantage plans that include drug coverage and standalone drug plans.  During the 2016 open enrollment period only 7.6% of MA enrollees without a low-income subsidy switched to another MA plan and .9% switched back to traditional Medicare.  In that year 8.3% of drug plan enrollees who were not eligible for the low-income subsidy switched to a different stand-alone drug plan and 1.7% went to a full MA plan.  There is another roughly 8% of MA members and 3% of drug plan members whose current plan terminates but they are automatically switched to a new plan from the same insurer.  These numbers were consistent with the earlier open enrollment periods in the study time frame and the great majority of Medicare Advantage members have never switched plans.  In fact in 2017, 45% of people on Medicare said they never look at their Medicare options, and 57% of those over age 85 were in this group.  35% of beneficiaries said it is hard to compare options, a share that was higher for sicker beneficiaries.  Now most people could stay in their plans because they are satisfied with them, but low switching rates could also be due to the difficulty of comparing and making a selection.  Other research has suggested that many beneficiaries are not in an optimal plan for their situation.  This inertia is good for the insurers–it lowers their overall cost of sales and marketing, but it may not be best for consumers.  Other tools or processes may be needed to help beneficiaries make more active and informed choices.

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