Center for Medicare Advocacy: Medicare and the Dilemma of “Choice”

On March 1, 2021, the New York Times published an column by Paul Krugman titled “Too Much Choice is Hurting America”.  Mr. Krugman discusses how “Economics 101 and conservative ideology say that more choice is always a good thing.”   He concludes, though, that the “spread of this ideology” means we live in “a country in which many of us are actually offered too many choices, in ways that can do a lot of harm.”  With respect to health coverage, he notes that “many people end up with heavy financial burdens because they chose the wrong health insurance plan — yet even experts have a very hard time figuring out which plan is best.” He states that “many aspects of life that used to be just part of the background now require potentially fateful decisions [… for example]  When you turn 65, you don’t just get put on Medicare, you also decide which of many Medicare Advantage plans to sign up for.”  

In 2021 Medicare beneficiaries have an average of 33 private Medicare Advantage (MA) plans and 30 Part D stand-alone drug plans from which to choose.  As discussed in a previous Center for Medicare Advocacy Weekly Alert (November 2020), most people actually won’t choose a plan in a given year.

Mr. Krugman doesn’t even capture the full extent of choices most people with Medicare must make.  Among other things, people must decide whether to remain in traditional Medicare (and, if so, can or should they purchase a Medigap plan) or enroll in an MA plan, should they choose a stand-alone Part D coverage or an MA plan with Part D coverage, and do they have some other coverage and if so, how will it coordinate with Medicare?  As we discuss in another Weekly Alert (March 2020), even the choices of coverage options in Medicare are unequal; for example, while people can get in and out of a Medicare Advantage plan on an annual basis, most people have limited opportunities to purchase a Medigap plan – a fact many people discover too late.

Once an individual with Medicare has made their original enrollment decision, even if the choice they originally made no longer meets their needs, the majority never change. It’s often too complicated, and many Medicare beneficiaries can’t make a choice. Their prior employer may have put them in a Medicare Advantage plan; they may not be able to return to traditional Medicare because they cannot purchase a Medigap policy to cover traditional Medicare’s high cost-sharing; they may not have the ability or connectivity to use the sophisticated tools needed to review and make choices.

Further, the information on which people rely to make decisions can be inaccurate, or worse, misleading.  For example, there have been recent problems with the Medicare Plan Finder, the primary tool that people use to compare plan options, and in the last several years the Medicare program has departed from an objective approach towards coverage options – including in the Medicare & You Handbook – and has instead steered people towards enrollment in MA plans.  Meanwhile, private Medicare Advantage costs the Medicare program more per enrollee than the traditional program, while usually offering its members fewer choices of health care providers. All this highly-touted choice is both harmful and elusive.

Krugman ends his column with a warning: “So the next time some politician tries to sell a new policy — typically deregulation — by claiming that it will increase choice, be skeptical. Having more options isn’t automatically good, and in America we probably have more choices than we should.”   We agree.  Choice in Medicare can be both burdensome and unequal. One way to address this is to rebalance some of these inequities by leveling the playing field between Medicare Advantage and the traditional Medicare program in the interest of all beneficiaries.