Sift and pore.
Compare and contrast.
Add and subtract.
Do your very best crunching numbers for Medicare's prescription drug plans and still — ready for this? — only about one in 20 of you will pick the best, most economical plan available to you.
That's the rather shocking conclusion of two University of Pittsburgh researchers who studied data for 2009 Part D drug plans that accompany traditional Medicare. Their findings were published in this month's issue of Health Affairs, the leading journal of health policy thought and research, which is published by Project HOPE.
This news probably isn't a shock to everyone. Some policymakers have been concerned about the ability of people to make smart choices out of dozens of competing plans since prescription drug coverage under Part D began in 2006.
There are many reasons for beneficiary overspending, but one of the most prevalent is paying more attention to plans' premiums than actual out-of-pockets expenses over the course of the year. If a plan provides poor coverage for a person's specific drugs, it can prove very costly. Medicare's online plan finder can help search for the cheapest plans, based on drug usage, but many people don't ever use it.
So, how much money are we talking about? The researchers found that, nationwide, beneficiaries in 2009 spent an average $368 more than they should have if they had picked the cheapest plan available for their prescription needs in their region. There were similar findings by others in 2007 and 2008.
And, even worse, more than 20 percent of those overspenders paid at least $500 more than they should have with the correct plan.
In the accompanying chart, you'll find who made the best and worst choices. I think you may be surprised at some of the results.
The researchers, Chao Zhou, a postdoctoral associate in the Department of Health Policy and Management, and Yuting Zhang, assistant professor of health economics, got their results from a random sample of Medicare beneficiaries from the Centers for Medicare and Medicaid Services (CMS) on 2009 Medicare Part D plan enrollment, claims, and plan and pharmacy characteristics. The study sample was 65 percent female and the average age was 75.
They looked at the commonalities, if any, of those beneficiaries who did pick the correct plan, including whether one region consistently made better choices.
They found a rather disturbing correlation between the results of their study and of the earlier studies done by others.
In other words, people aren't getting any better at picking the cheapest plan that satisfies their needs.
Why? People tend to pick a plan and stick with it.
They don't want to pick a new plan — a hassle in itself — or learn the ins and outs of a new plan.
But re-examining plans every year is a must. Plans change; medications change. A new plan could better suit your medication needs.
So, what can be done to correct this unnecessary overspending?
The researchers concluded that beneficiaries enrolled in the stand-alone Part D plan need more government help than boilerplate instructions. People need customized communications specifically tailored to the drugs they take.
They suggested the CMS could offer beneficiaries either the three plans best suited to their individual needs or just assign a plan to them and give them one alternative.
And, they saw hope on the horizon. Included in the Affordable Care Act is the creation of insurance exchanges — funded by the federal government to be run by states — to create a competitive private health insurance market. Expected to be launched in 2014, these online marketplaces would provide one-stop shopping for affordable coverage.
Until then, the best thing you can do is use Medicare's plan finder (medicare.gov).
Don't know how to use it?
We'll help. You'll find step-by-step instructions in our special Medicare Part D report. Good luck.
Patti Ewald can be reached at [email protected] or (727) 329-8746. Times researcher Carolyn Edds contributed to this report.