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Medicare Part D Plans Should Be Reduced According To Study

According to a study done by the University of California, Los Angeles and the University of Plymouth in the U.K., many Medicare beneficiaries find it hard to choose the most cost-effective Medicare Part D plan when there are so many plans to choose from.  Beneficiaries often choose unnecessarily expensive plans and don’t realize that they are overpaying for these plans.

The study included more than 200 healthy adults with half over the age of 65 and half under the age of 65. One of the groups had three plans to choose from, another group had 10 plans to choose from, and the third group had 20 plans to choose from. The results obtained from the study showed that the groups that had the choice of many plans had more difficulty choosing one that was cost-effective. The study also noted that older adults are less likely to choose the least-costly plan yet more confident that they had made the right decision than the younger adults.

“Many seniors are unaware that they can be saving hundreds of dollars every year by choosing a different drug plan, because there are entirely too many choices for them to navigate,” said Yaniv Hanoch, Ph.D., author and lecturer at the University of Plymouth.”The system should limit choice and empower its beneficiaries to make informed and cost-effective decisions about their prescription drug plan.”

Recommendations include fewer options to improve the system by lowering the number of plans to 10 or less. Also, because the system is so difficult to navigate, seniors were reluctant to switch plans during the annual open enrollment period.

The study was funded by the Robert Woods Johnson Foundation and can be found at It will be published in the August 2009 issue of Health Services Research.

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