Medicare Enrollment, Plan Choices Linked to Health Insurance Literacy

People with higher rates of health insurance literacy were more likely to enroll in Medicare Advantage and choose lower-premium or higher quality plans, according to findings published in JAMA Network Open.

“Health insurance literacy is particularly important to Medicare beneficiaries because they can choose among several options to access Medicare coverage,” authors noted.

Researchers conducted a cross-sectional study to understand the relation between rates of health insurance literacy and coverage choices in traditional Medicare (TM), Medicare Advantage (MA), and options within MA.

The study involved 6627 Medicare beneficiaries. The participants were predominantly women (54%), nonHispanic White (79.6%), and 75.13 years of age on average. Data also indicated 1.2% of participants were Asian, 10.5% were Black, 7.4% were Hispanic, and 3.4% were of another nonHispanic race, which included American Indian, Alaska Native, Native Hawaiian, and 2 or more races.

Three self-reported measures were used to determine overall insurance literacy: “presence of information to make an informed comparison, ease in reviewing and comparing coverage options, and annual review and comparison of coverage options.”

People with higher health insurance literacy rates enrolled in Medicare Advantage plans at higher rates compared to those with lower rates. This was especially true for beneficiaries who reviewed insurance options annually vs those who did not (38.0%; 95% CI, 36.0%-40.1% vs 27.8%; 95% CI, 25.8%-29.7%).

Additionally, MA enrollees were 4.6% more likely to select plans with 4-4.5 star ratings (95% CI, .1%-9.2%) and 4.8% more likely to select lower-premium plans (95% CI, .6%-9% percentage points) if they reviewed coverage options annually. Researchers also noted, however, that enrollment in 5-star plans was 3.8% lower for people who reviewed plans annually vs people who did not (95% CI, -5.8% to -1.9%).

Findings also indicated the likelihood of conducting a comparison of plans annually was higher among:

• women vs men (OR 1.16; 95% CI, 1.01-1.34);
• those with high school completion (OR, 1.26; 95% CI, 1.04-1.54) or a college degree (OR, 1.32; 95% CI, 1.07-1.62) vs those with less than a high school education; and
• those who were married vs unmarried (OR, 1.18; 95% CI, 1.02-1.38).

However, the likelihood of annual comparison was lower among:

• those who were 80 years of age or older vs those younger than 65 years of age (OR, .7; 95% CI, .55-.89)
• those with Medicare and Medicaid dual eligibility vs those without it (OR, .79; 95% CI, .63-.99); and
• those with at least 3 limitations in activities of daily living vs those without any (OR, .68; 95% CI, .55-.84).

“Our findings suggest that health insurance literacy is an important factor in enrollment choice by enabling beneficiaries to more closely align their health insurance needs and preferences,” researchers wrote. “This association may be more relevant to MA because of its low premiums, expanded benefits, and more coordinated care.”

Authors also concluded that enrollment in TM over MA may be due to lower health insurance literacy rates, as “approximately one-half of Medicare beneficiaries did not know about MA during open enrollment.”

“These findings suggest that policy makers should develop programs to make health insurance information accessible and understandable and to encourage annual review and comparison of coverage options, especially for vulnerable populations,” researchers said.

Reference:
Park S, Langellier BA, Meyers DJ. Association of health insurance literacy with enrollment in traditional Medicare, Medicare Advantage, and plan characteristics within Medicare Advantage. JAMA Netw Open. 2022;5(2):e2146792. doi:10.1001/jamanetworkopen.2021.46792