Newswise — In a sign of the challenges facing seniors on Medicare, a new study finds that older Americans are more likely to make poor choices when faced with a wide array of drug-coverage plans. Making matters worse, many are confident they made the right decisions.
"There is information overload when there are too many drug plans for seniors to choose from," said study co-author Thomas Rice, vice chancellor at the University of California at Los Angeles. "Congress needs to take this issue very seriously."
The risk, he said, is that seniors will choose the wrong plans and end up needlessly spending hundreds of dollars a year.
Medicare, which mostly serves seniors, has offered coverage for prescription drugs since 2006. A typical senior chooses from a list of 50 drug plans, Rice said.
Advocates for the elderly have expressed concern that the choices are overwhelming. In the new study, published online in the journal Health Services Research, Rice and colleagues sought to understand how the number of choices affects decision-making.
The researchers created hypothetical drug plans and asked 180 adults in Claremont, Calif., to consider which one they would recommend that a friend choose. Half of the adults were age 65 or older. The researchers randomly divided the participants into groups and gave them information about three, 10 or 20 plans.
The researchers found that older people fared worse when asked to make a choice. People age 65 and older were only 41 percent as likely as younger people were to know which plan was the cheapest.
Participants in general were more likely to make errors when they had more options from which to choose. When they looked at the findings using one statistical approach, researchers found that seniors were almost twice as likely to be very confident about their choices than younger people were, even though they were less likely to have made the right decision regarding overall cost.
Previous research has suggested that people put too much emphasis on low premiums and do not take into account how much they will actually pay when they buy a drug, Rice said.
The study findings reflect the complaints that advocates have heard from Medicare beneficiaries, said Paul Precht, director of policy and communications at the nonprofit Medicare Rights Center. Grants from foundations, public agencies and others fund the organization.
The plethora of plans came into being during the Bush Administration, when regulation was not popular and there were fears about limiting choices through rules, Precht said.
Now, a more regulation-friendly administration is in the White House. Moreover, Precht said, "we're at a point where we're getting a pretty good idea of what the quality plans are."
The next steps should be to find ways to reduce drug costs and, if necessary, limit the marketplace to the "highest-quality, best-performing plans," he said.
Health Services Research is the official journal of the AcademyHealth and is published by John Wiley & Sons, Inc. on behalf of the Health Research and Educational Trust. For information, contact Jennifer Shaw, HSR Business Manager at (312) 422-2646 or [email protected]. HSR is available online at www.blackwell-synergy.com/loi/hesr.
Hanoch Y, et al. How much choice is too much? The case of the Medicare prescription drug benefit. Health Services Research online, 2009.
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