Seniors Choose Medicare Prescription Plans Wisely: Study
TUESDAY, Nov. 8 -- Despite concerns that the complex offerings under Medicare Part D prescription drug plans would confuse older Americans, a new study finds seniors are able to figure out which plan costs them the least.
The researchers found evidence that seniors -- possibly with the help of family members -- quickly adapted and made changes as necessary.
The findings may ease concerns among some experts about elderly people's ability to understand complicated drug insurance products and select the least expensive, according to the University of Texas at Austin researchers.
They analyzed data from more than 71,000 people who were enrolled in stand-alone prescription drug plans provided or administered by CVS Caremark in 2006 and 2007 and who did not receive a federal low-income subsidy in either year.
From 2006 to 2007, 81 percent of the people in the study lowered their "overspending" by an average of $298 -- 55 percent of the 2006 level.
The oldest people and those beginning to take Alzheimer's medications had higher-than-average reductions in overspending, suggesting that family members and others help them choose plans, the researchers said.
"Having a multitude of options to choose from is economically efficient because we are all different and have different needs," Eugenio Miravete, an associate professor of economics, said in a university news release.
Medicare Part D plans can have different premiums, co-pays and formularies (a list of covered drugs), according to the American Academy of Family Physicians.
"Restricting choices reduces the ability of firms to target individuals with specific needs, and it is not efficient that we all insure against unlikely risks. Medicare Part D is a successful implementation of a market-based approach to deliver a large-scale entitlement program."
The drug plans are popular with beneficiaries, according to the researchers.
The study will be published in the journal American Economic Review.
The American Academy of Family Physicians has more about Medicare Part D.
Posted: November 2011