How Much Choice Do Seniors Want?: Survey Results on the Medicare Prescription Drug Benefit

Janet Cummings Link*Thomas Rice*

Yaniv Hanoch**

*Department of Health Services, UCLA School of Public Health

**Department of Psychology, University of Plymouth, England

Funding: Robert Wood Johnson Foundation Funding: Robert Wood Johnson Foundation Investigator Award in Health Policy ResearchInvestigator Award in Health Policy Research

Research Objective

To investigate whether seniors prefer a large number of Medicare drug plan choices versus a handful of plans to choose from

To examine the determinants of these beliefs (demographics, SES, health status, political party, and political ideation)

Passage of Medicare Part D resulted in a stand-alone insurance policy

In 2007, more than 50 plans available in all of the contiguous 48 states

Is this too much choice for seniors to navigate?

Background and Significance

Theory from economics and psychology posits that more choice benefits consumers with the following assumptions:

Sufficient information about choices Consumers can sift through choices Consumers will not regret choices NOT made Consumers do not dwell on what others have

Newer research suggests that too much choice can have adverse consequences

Seniors may be especially prone to adverse effects of too much choice

Background and Significance

Seniors with greater cognitive abilities and resources will prefer more choice Younger seniors will prefer more choice Higher Education and Income will be associated with preference for

more choice

Political party affiliation and political ideology will be associated with preference for choice Republicans will prefer more choice relative to Democrats and

Independents Conservatives will prefer more choice relative to Liberals and

Moderates

Hypotheses

Nationally representative survey of 718 seniors conducted in November 2006

Survey conducted jointly by the Kaiser Family Foundation and Harvard School of Public Health

Data

718 seniors interviewed

653 seniors without missing information for dependent

variable

628 seniors without missing information for

key explanatory variables

Analytic deletions

65 who responded “Don’t know” or “Refused” for outcome

variable

25 observations missing on one or more of the following:

Age, marital status, self-rated health, education, race

Analytic Sample

Dependent Variable (Dichotomous)

• Which statement better reflects your opinion: Medicare should offer seniors dozens of drug plans so individuals can select their own plan to meet their needs OR Medicare should select a handful of drug plans that meet certain standards, to make it easier for seniors to pick among those plans

Variables

Explanatory Variables

• Demographics: Age (indicator for 75+), Gender, Marital status Race/Ethnicity (White, Black, Other),

• Socioeconomic Status: Education, Income

• Health Status: Self-rated health (indicator for fair/poor), Indicator for whether Senior takes medication

• Region and Urban Status

• Political Party: Republican, Democrat, Independent, Other

• Political Ideology: Conservative, Liberal, Moderate, Unknown

Variables

Descriptive Statistics for Analytic Sample

ProportionPrefer Dozens of Plans 31.5%

Prefer Handful of Plans 68.5%

Female 57.3%

White 88.4%

High school degree or less 40.9%

Income less than $40,000 51.4%

Self-reported health fair/poor 20.4%

Take medication 86.6%

Key Results From Logistic Regression

Variable Odds Ratio 95% Conf. IntervalAge 0.74 0.51, 1.07

Black 2.60** 1.15, 5.90

Other 1.37 0.69, 2.72

High School Graduate 0.47** 0.25, 0.86

Some College 0.80 0.43, 1.47

College Graduate 0.52** 0.27, 0.99

Liberal 0.62* 0.36, 1.08

Moderate 0.64** 0.42, 0.97

Views unknown 0.53 0.17, 1.66

Outcome Variable: Prefer dozens of plans (vs. prefer handful)Outcome Variable: Prefer dozens of plans (vs. prefer handful)

*p<0.10, **p<0.05 *p<0.10, **p<0.05

Maintain the status quo

Reduce the number of drug plan choices offered to seniors

Standardize drug plans

Policy Implications