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Study: Few Medicare Part D beneficiaries pick lowest-cost plan
September 19th, 2012
MOUNTAIN VIEW, Calif. – Most Medicare Part D beneficiaries are paying more out of their own pockets than they need to, a study by eHealth Inc. reveals.
The online health insurance portal said Tuesday that just 5% of customers were in the Part D prescription drug plan (PDP) with the lowest total out-of-pocket costs available to them, according to an analysis of over 100,000 user sessions on its PlanPrescriber.com plan comparison site during the 2012 Medicare enrollment period (Oct. 15 to Dec. 7, 2011).
Similarly, only 24% of customers were in the Medicare Advantage PDP with the lowest total out-of-pocket costs available to them.
eHealth's analysis determined that the average user who switched to the plan with the lowest total out-of-pocket costs for 2012 plan year could have saved $654 over their current Medicare PDP and $605 over their current Medicare Advantage PDP. The study also found that the average customer would spend $2,076 per year with their current Medicare PDP and $1,980 per year with their Medicare Advantage PDP.
"Changes in medication usage notwithstanding, the prices customers pay for their coverage can change significantly from year to year because many organizations change components of their drug plans each year," eHealth stated, citing drugs covered, premiums, deductibles, co-insurance, co-payments, and different drug tier systems used by insurers. "Any one of these changes can significantly impact what beneficiaries pay out of their own pockets year to year on a Medicare Part D prescription drug plan. In many instances, the lowest-cost plan for an enrollee in one year is not the lowest-cost plan the following year."
What's more, the analysis showed that 66% of customers never hit the Medicare coverage gap, known as the "doughnut hole," for the 2012 plan year with their Medicare or Medicare Advantage PDP. Of those who reached the doughnut hole, 52% would hit the gap before September in their current Medicare PDP.
And in 10 of the nation's largest states, the average Medicare PDP covered only about 67% of all drugs approved by Medicare, and the lowest number of drugs covered by a single plan in any market was around 49%, the research found.
For the study, over 12,000 user sessions between Oct. 15 and Dec. 7, 2011, were used to compare stand-alone Medicare PDPs, amd more than 5,000 user sessions were used to compare Medicare Advantage PDPs.
eHealth said the analysis underscores the value of reviewing Medicare drug coverage annually during the enrollment period. eHealth reported that only about 10% of Part D plan participants change their coverage annually, according to a 2010 study by the Robert Wood Johnson Foundation.