Too many choices decrease Medicare enrollment
Over the weekend, the New York Times Magazine had an excellent story on a scientific phenomena known as “decision fatigue”: The more options we face, the more challenging making any kind of a choice becomes.
“No matter how rational and high-minded you try to be, you can’t make decision after decision without paying a biological price,” John Tierney writes. “It’s different from ordinary physical fatigue — you’re not consciously aware of being tired — but you’re low on mental energy. The more choices you make throughout the day, the harder each one becomes for your brain, and eventually it looks for shortcuts.”
Tierney opens his piece with an example from an Israeli prison, where inmates are much more likely to receive parole in the morning — when the parole board has made fewer decisions — than in the afternoon.
Turns out, there’s an equally good example happening much more locally. A new Health Affairs study shows this phenomena to be pretty strong in Medicare Advantage, the private alternative to traditional, fee-for-service coverage.
In Medicare Advantage, enrollees were more likely to enroll in a plan as choice increased, but only when choosing between fewer than 15 options. Between 15 and 30 plans, the extra choice doesn’t seem to do much to affect sign up numbers. But when seniors have more than 30 plans to choose from, enrollment drops off sharply. Here’s what that looks like, in a chart from the Health Affairs study:
There’s likely a decent number of seniors running up against decision fatigue on Medicare Advantage: The average beneficiary has access to 24 different plans. This a “slight drop” from previous years, a Kaiser Family Foundation brief notes, and one that gets the program just below that 30-plan threshold where enrollment tends to drop off significantly:
There’s not a clear-cut, best policy option to combating decision fatigue in Medicare Advantage, but likely rests somewhere between ensuring that Medicare Advantages remain competitive but also not too overwhelming for those they’re meant to serve.