Health plans confuse medical school students
Even doctors in training have trouble sifting through insurance options to pick the cheapest available plan, a 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 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.
According to a recent analysis, only 5 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, who worked on the study at Virginia Commonwealth University School of Medicine.
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 fewer than 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 said. “But even if the number of plans available were lower, many Medicare beneficiaries still do not understand the information that is provided.”
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.