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Previous studies have shown that Medicare Part D beneficiaries tend not to switch plans even though they are encouraged to reevaluate their current plans and switch plans if needed every year. Little is known about why this "plan stickiness" occurs, so there is a critical need to better understand this non-switching behavior.
This dissertation project aimed to describe how Part D beneficiaries processed information and how they perceived the plan switching process. It also aimed to describe how switchers and non-switchers were different and to test a model of Part D plan information processing that adapted from Motivation, Opportunity, and Ability (MOA) model.
To achieve these objectives, this study had a cross-sectional descriptive design and used a mixed- methods approach consisting of focus groups, interviews, and mailed survey. The qualitative study sample was recruited from two cities in Iowa and transcripts of audio-recorded discussions were analyzed. The population studied in the quantitative phase was voter registered Iowa Part D beneficiaries who were older than 65 and did not receive Low Income Subsidies (LIS). Stratified random sampling was used to identify survey subjects. An eight page survey assessing factors related to Part D plan decisions was developed and mailed to 2,250 subjects, with reminder postcards as well as phone calls used to increase response rate. Finally, confirmatory factor analysis and structural equation modeling (SEM) were used to test a model of Part D plan information processing.
A total of 16 participants from three focus groups and three interviews were included in the qualitative analysis. The results indicated that Part D beneficiaries processed different amounts of information even though they made the same decision (i.e. non-switching); whether to receive help from others in reviewing coverage options emerged as an important theme in the plan switching decision.
A usable response rate of 22.5 percent was obtained. Of this sample, 264 respondents were non-LIS Part D beneficiaries and were used for further analysis. About one fifth of the sample switched plan between 2012 and 2013, supporting existing literature that has reported a low plan switching rate. Switchers and non-switchers had few demographic differences, but twice as many switchers as non-switchers received help from others in reviewing coverage options. The results from the SEM analysis indicated that those who had lower risk perception about plan switching, higher motivation, and higher self-efficacy were likely to read larger amounts of plan information. They also indicted that higher perceived risk, involvement, and self-efficacy were positively associated with motivation to process plan information.
The findings of this dissertation suggest that plan stickiness has two types - active (i.e. informed choice) and passive (i.e. inertia) - depending on the amount of information processed, which was determined by beneficiaries' levels of perceived risk, motivation, self-efficacy, and needs. Furthermore, findings suggest that whether to receive help in understanding plan information may play a large role in leading informed beneficiaries to act on their knowledge and switch plans.
The present study is the first to integrate the concept of information processing to understand Part D beneficiaries' plan switching decisions and the first to examine psychological factors affecting beneficiaries' information processing as well as their plan switching decisions. Study findings will help policy makers developing efficient communication strategies with beneficiaries to help them to make informed choices.