Report Shows That Few People Switch Part D Plans, Despite Potentially Lower Costs

Relatively few people on Medicare use the Fall Open Enrollment Period to switch Part D prescription drug plans (PDP), according to a recent issue brief published by the Kaiser Family Foundation (KFF). Using information between 2006 and 2010, KFF found that 87 percent of people enrolled in Part D did not switch plans, even though people who did switch were often able to reduce their out-of-pocket drug costs. According to the KFF issue brief, of the Medicare beneficiaries who switched prescription drug plans at some point between 2006 and 2010, nearly half (46 percent) saw their premiums fall by at least five percent the following year. In contrast, only eight percent of beneficiaries who did not switch plans saw their premiums fall by at least five percent. Additionally, most beneficiaries who did not switch plans between 2006 and 2010 faced large premium increases (of at least $10 per month) from one year to the next. The KFF analysis shows that many Medicare beneficiaries could lower their Part D premiums by comparing their plan options during the Fall Open Enrollment Period. Although the reasons why more beneficiaries don’t switch PDPs is unclear, qualitative evidence from various polls and focus groups supports the notion that that the current Part D landscape is too complicated and offers too many choices. According to KFF, policymakers may want to consider ways to simplify beneficiaries’ decision-making, including providing better tools to support beneficiaries during the decision-making process.