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Abstract Session F1: Health Policy/Advocacy/Social Justice
Moderator: LeChauncy Woodard, MD, MPH, FACP THE ROLES OF COST AND QUALITY INFORMATION IN MEDICARE ADVANTAGE PLAN ENROLLMENT DECISIONS Rachel O. Reid1; Partha Deb4; Benjamin L. Howell2; William Shrank3. 1Brigham and Women's Hospital, Boston, MA; 2Center for Medicare & Medicaid Services, Baltimore, MD; 3Brigham and Women's Hospital, Boston, MA; 4Hunter College, New York, NY. (Tracking ID #1933518) BACKGROUND: To facilitate informed decision making in the Medicare Advantage marketplace, the Centers for Medicare & Medicaid Services publishes information about Medicare Advantage plans via the Medicare Plan Finder website, including costs, benefits, and quality ratings provided on a 1-to-5 star scale. Little is known about how beneficiaries weigh costs versus quality when making enrollment choices. In this study, we assess the variation in Medicare Advantage enrollment attributable to plan attributes and willingness to pay for quality. METHODS: We conducted a nationwide, beneficiary-level cross-sectional analysis of the 2011 Medicare Advantage and Prescription Drug (MAPD) plan choices of beneficiaries enrolling in Medicare Advantage for the first time ever in 2011 who were not eligible for the low-income subsidy. Matching beneficiaries with their choice-sets of MAPD plans by county, we used conditional logistic regression to estimate associations between plan attributes and enrollment, to assess both the proportion of explained enrollment variation attributable to plan attributes and willingness to pay for quality. The model accounted for 5-star quality ratings, costs (premiums and average estimated out-of-pocket costs), benefits (plan structure; deductibles; coinsurance; hearing, vision, dental benefits; and prescription gap coverage), and lagged county-level sponsor organization (i.e., brand) market share. Because willingness to pay for quality may vary at different rating levels, the model included both the 5-star quality rating itself and its quadratic transform. We assessed differential willingness to pay by beneficiary characteristics (age, sex, race, and urban versus rural residence) by interacting these covariates with quality and cost covariates. RESULTS: The study cohort included 847,069 first-time Medicare Advantage enrollees who selected an eligible MAPD plan in 2011. Relative to the total variation explained by the model, market share accounted for 35.3% of variation in plan choice, premiums for 25.7%, estimated out-of-pocket costs for 11.6%, and 5-star quality ratings for 13.6%. Mean cumulative willingness to pay for a plan in total annual combined premiums and out-of-pocket costs varied from $4,154.93 for a 2.5-star plan to $5,698.66 for a 5-star plan. Increases in willingness to pay diminished at higher 5-star quality ratings: $549.27 (95% CI $541.10 to $557.44) to go from a 2.5-star plan to a 3-star plan and $68.22 (95% CI $61.44 to $75.01) to go from a 4.5-star plan to a 5-star plan. Beneficiaries aged 64-65 years were more willing to pay for plans with higher quality ratings than other age groups; black and rural beneficiaries were less willing to pay for plans with higher quality ratings. CONCLUSIONS: Medicare Advantage enrollees prefer plans with higher quality ratings and lower costs; however, market share's contribution to plan choice suggests that word-of-mouth and brand recognition are also
- influential. Key subgroups' differential willingness to pay for quality and market share' influence argue for
continued efforts to advance communication of plan attributes to improve marketplace efficiency. If increased enrollment in plans with the highest quality ratings is a goal, the diminishing marginal utility for quality
- bserved supports policy interventions to make achievement of the highest ratings desirable for insurers and