Do recent changes in Medicare Advantage plan quality information help move beneficiaries from lower to higher-performing plans?

Medicare Advantage (MA) is one of the few settings where extensive plan quality information and comparison tools are available to potential enrollees when making plan selections.  We investigate whether recent changes in Medicare rules that provide stronger ‘nudges’ to beneficiaries cause enrollment shifts to higher quality plans.

We used MA administrative data at the contract level including Star Ratings, enrollment, plan and enrollee characteristics, and premiums from 2008-2013. In 2012, 5-star plans were given extended marketing and special enrollment periods and received a special icon online. Starting in 2012, messaging warning beneficiaries away from enrolling in Low-Performing Icon (LPI) plans was put online, and in 2013, online enrollment was disabled, LPI enrollees received special dispensation to dis-enroll at any point in the year, and enrollees in LPI plans were sent a letter informing them of their plan’s LPI status and recommending they consider other plans. Fixed-effects linear regression models were used to assess enrollment changes in 5-star and LPI plans over time as quality information for these plans changed.

Of the 1625 plan-years for 2010-2013 Star Ratings, only 25 are 5-star and 105 are LPI plan-years. 5-star/LPI plans differ from all other plans by having considerably higher (for 5-star)/lower (for LPI) premiums, higher/lower proportion non-profit, and lower/higher proportions of dually eligible beneficiaries, versus all other plans. Relative to earlier years, 2013 LPI enrollment declined more during the year: a decline of an additional 4.5%, p < 0.01.  We do not detect enrollment changes for 5-star plans in later versus earlier years following the rule changes for these plans.  For changes during open enrollment, results are currently inconclusive on whether rule changes for LPI plans cause greater declines.  No open enrollment differences are detected for 5-star plans post rule changes. 

Rule changes strengthening incentives for beneficiaries to shift to higher quality MA plans were effective for moving enrollees out of the lowest performing plans but not necessarily into the highest performing plans. The ‘nudges’ for LPI plan enrollees were stronger and more targeted than those regarding 5-star plans. Other plans with similar premiums were available to LPI enrollees but switching to a 5-star plan, when available, typically involved paying a higher premium.