Why Retirees Don't Switch Medicare Part D Plans, But Should

Seniors are reluctant to put in the effort to select a new prescription drug plan, even to save money.

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Why Retirees Don't Switch Medicare Part D Plans, But Should
Getty ImagesMedications included on most Medicare Part D plans change yearly, which is one reason participants should consider exploring other plans.
By Emily Brandon

Medicare Part D prescription drug plans are allowed to change their premiums, covered medications and preferred pharmacies each year, and many plans do. Plan participants are invited to switch plans once a year during the open enrollment period, but few Medicare beneficiaries actually pick a new plan. Here's why retirees are reluctant to change Medicare Part D plans and what might motivate them to do it.

The cost of the plan. Most Medicare beneficiaries consider the premiums and deductibles when initially selecting a Part D plan, but they don't continue to shop around for the lowest cost plan each year, according to recent findings from a series of focus groups with Medicare beneficiaries in Baltimore, Seattle, Memphis, Tennessee, and Tampa, Florida, conducted by the Kaiser Family Foundation and PerryUndem Research and Communication. Seniors in the focus groups said they tolerated and expected their premiums and copays to rise and would only start looking for a new plan if the price increase reached around $75 more a month. "People sign up for their plan maybe when they first come on Medicare, and they stay on their plan unless premiums really jump through the roof," says Tricia Neuman, senior vice president of the Kaiser Family Foundation. "It takes a big deal for people to make a change and insurers know that, so they can kind of raise their premiums, but not so much, if they want to keep people in their plan."

Covered medications. Medicare Part D plans have lists of covered medications called the formulary, which are tweaked from year to year. Seniors who need medications that aren't on their plan's formulary are often willing to try a number of workarounds including an alternative drug or a generic version that is covered, medication samples from a doctor's office, applying for discounts from drug manufacturers, appealing the insurer's decision not to cover the drug and ordering medications online, KFF found. However, some seniors say they would be motivated to change insurers if their plan stops covering a necessary drug, significantly increases the out-of-pocket cost or makes it difficult to obtain the medication due to preauthorization requirements or other restrictions.

Resisting change. Changing Part D plans can disrupt your health care routine. Many seniors don't want to risk upsetting their established method of getting medication and fear they could be even worse off with a new plan. Some seniors choose a Part D plan with the same insurance company that provided their employer-sponsored insurance before signing up for Medicare.

Access to specific pharmacies. Many retirees say it is important to them to have access to a pharmacy familiar to them or close to home. Some seniors also have a relationship with a specific pharmacist they don't want to give up.

The plan's brand name. A prescription drug plan's brand name matters to some Medicare beneficiaries. Retirees told KFF they felt reluctant to select a Part D plan from a company they had never heard of, even if that plan offered better benefits at a lower cost. Many retirees had both good and bad associations with large organizations, including AARP, Blue Cross Blue Shield, United Healthcare and Aetna, that influenced their plan choices.

Personal service. Many seniors said good customer service, especially in person, would make them more likely to choose a specific insurance provider​​, while poor customer service early on would make them more likely to switch. "Many seniors relied upon insurance agents to help them pick a plan, and the idea of having this in-person help was so appealing to seniors that oftentimes after the focus groups we would find that seniors were providing their insurance agent's contact information to other seniors that wanted it," says Gretchen Jacobson, associate director of the Program on Medicare Policy at the Kaiser Family Foundation.

Coordinating with a spouse. Married beneficiaries often prefer to have the same Part D plan or same insurer as their spouse. Retirees said it was more convenient to keep track of the rules for a single plan instead of two, even when separate plans might better cater to their individual health needs. "One woman in our focus group explained that it's much easier for her if her husband is in the same Part D plan because when she went to the pharmacy to pick up their medications she knew what her plan covered and how much it would cost for medications," Jacobson says. "She just could not imagine having two sets of rules for two different plans."

Star ratings. Medicare ranks its prescription drug plans based on quality, with five stars being the best possible rating. But most seniors admitted that they didn't know about the quality ratings. "Seniors said that their own experience with the plan was more important to them than the plan's quality rating," Jacobson says. You can check out the star ratings of plans in your area using Medicare.gov's plan finder tool.

Too many choices. Retirees claim to want a variety of Part D plan choices, but they also seem overwhelmed by the number of options they need to sort through. "People make worse decisions when there are lots of options, and this is especially true when the things people are deciding about are multidimensional and complicated, as for example, choice of a prescription drug plan or a health insurance plan," says Barry Schwartz, a psychology professor at Swarthmore College and author of "The Paradox of Choice." "People made suboptimal choices of prescription drug plans, and the more plans they were given to choose among, the more likely it was that they were going to choose a suboptimal plan."

Repetitive research. Many retirees spent a significant amount of time initially choosing a Medicare Part D plan, and they are reluctant to invest that much time again. Medicare beneficiaries said they would need to be significantly frustrated with their current plan in order to put in the effort to switch. "Seniors said that they found it very difficult to change plans and to choose plans," Jacobson says. "They liked having many options, but the process of choosing plans they found frustrating, confusing and exhausting."

Emily Brandon is the senior editor for Retirement at U.S. News. You can contact her on Twitter @aiming2retire, circle her on Google Plus or email her at ebrandon@usnews.com.


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31 Comments

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helenwesthelen

Mary, the two seniors are probably right. My mother (66 yrs) does payroll and insurance for all city employees. She was called to a mandatory meeting about a month ago and informed by Medicare that once a person hits 70 or 75, and the person is on Medicare (no matter what type) tand the person is diagnosed with any terminal illness ( cancer, etc....) Medicare WILL NOT pay a dime for any kind of treatment. You will not hear this info on any media because they are NOT going to advertise this nor is Medicare going to just come out and freely give you this info. This is a direct consequence of Obamacare. Here is one way the so called death panels in Obamacare and population control will be at work. Sorry for the confirmation on the bad news.

June 04 2014 at 8:35 AM Report abuse rate up rate down Reply
mary

I was told by two seniors..that they needed hip replacement and were told by obama care they were too old and will not be covered. (this was told to them by their Dr. Oh then said I am told by Obama care to just give you pain med. Is this true. Also one of them though she was having a heart attack. Went to ER found out it was not but was kept overnight for observation. left the next day in the afternoon. Got a bill in the mail for the entire amount wastold by obama care Insurance .That she was responcable because it was an observation and would not be covered. They told her if she was admitted and stay for 3 days it wold. She is on a very low fixed income. These are 2 people that (WORKED) all their lives. What is going on?

June 04 2014 at 5:54 AM Report abuse rate up rate down Reply
cqdeed

I asked the SSA about part D when I signed up for Medicare, was given a long list and told to pick one. I decided to not pick any and go with my existing insurance as secondary to Medicare. Then I got a bill to pay my part D premium. My existing insurance is TRICARE. I don't pay premiums for it as it was part of my military retirement package. So far I've paid more since I signed up for Medicare than Medicare has paid out by a long shot. I'm still getting bills from Medicare. Some kind of insurance premium is also being deducted from my SS check so it's back to SSA for me.

June 04 2014 at 4:56 AM Report abuse rate up rate down Reply
RHReese

They never should have made the healthcare plans. They just should have made Medicare in it self more affordable and cover more. Most seniors I have talked to just want things to be as simple as possible without have to reseach more crap that the government adds to healthcare so they just keep what they got. It's not a time in their lives they should have to do this.These seniors don't want the frustration the government put on them. All idiots are running these programs. Why in the hell would a 75 year old woman want a health club membership with her heaLth plan ?

June 03 2014 at 5:31 PM Report abuse +5 rate up rate down Reply
1 reply to RHReese's comment
thefacts22

I call it "kick backs",the fraud,incompetence and stupidity of this Regime is at record braking numbers

June 03 2014 at 6:59 PM Report abuse -3 rate up rate down Reply
1 reply to thefacts22's comment
rostra

Really, are you than numb, Medicare Part D was created and enacted by Bush, not Obama. It's been a disaster since day one, costing 3.3 trillion taxpayer dollars to date.

June 03 2014 at 7:11 PM Report abuse +3 rate up rate down
Carole Ann

Many of us have other plans that pay for our prescriptions so we don't need Medicare D

June 03 2014 at 5:27 PM Report abuse rate up rate down Reply
thefacts22

Medicare and SS are both organized Socialist rackets,the first a Ponzi crap,the second employment for the incompetent,and source of fraudulent dope

June 03 2014 at 4:14 PM Report abuse -9 rate up rate down Reply
Ron

Clinton wars???? Go back and read history again.

June 03 2014 at 3:16 PM Report abuse +2 rate up rate down Reply
drmike15

This is the failure of capitalism at its most crass. This inane belief in markets and the myth of the perfectly rational consumer. In reality many seniors can barely dress themselves or make a decision at an four-way stop. Asking them to "comparison shop" their way through their health care isn't just dumb - it's cruel. National healthcare, for all, on demand. Period.

June 03 2014 at 2:51 PM Report abuse +1 rate up rate down Reply
1 reply to drmike15's comment
dopey.obamite

Wait wait wait.....so medicare is a failure of capitalism?

June 03 2014 at 4:01 PM Report abuse -4 rate up rate down Reply
pllove49

Why does it all have to be so complicated that it's cruel....

June 03 2014 at 12:46 PM Report abuse +6 rate up rate down Reply
bcody1944

The article didn't mention the effort and stress involved to "understand" the various plans offered each year. We have assisted my mother and other seniors, and in many instances, absorbing and understanding the "fine print" is stressful enough to have the senior say, "Screw it. I'll just stay with what I've got."

June 03 2014 at 11:59 AM Report abuse +9 rate up rate down Reply