Why do few Medicare beneficiaries switch their Part D prescription drug plans? Insights from behavioral sciences

Medicare Part D innovatively included a market in public health insurance in the United States. Proponents argued that increased competition would drive better value for beneficiaries, but others feared that beneficiaries would struggle to navigate the complex program. Understanding how Part D beneficiaries choose between plans allows us to evaluate the extent to which Medicare Part D succeeds at increasing value to beneficiaries and where there is scope to support beneficiaries. Many Part D beneficiaries are sensitive to price cues in relation to pharmacy choice and medication adherence, yet frequently overpay for their plans. Empirical literature suggests that behavioral aspects including information overload, low salience, low trust, and practical 'sludge' all partly contribute to failure to switch. We propose solutions to address these barriers based on behavioral insights.