Switching Medicare Plans Outside Open Enrollment Was Increasingly Common, Especially Among Sicker Enrollees, 2015-22

Area of Science:

• Health Policy
• Health Economics
• Insurance Markets

Background:

• Medicare Advantage (MA) and traditional Medicare plans use enrollment periods to prevent adverse selection.
• Recent regulatory changes have relaxed these enrollment periods, allowing year-round plan switching.

Purpose of the Study:

• To analyze the impact of relaxed enrollment periods on beneficiary switching behavior.
• To assess the health risk profiles of beneficiaries switching plans outside standard enrollment periods.

Main Methods:

• Analysis of administrative data from 2015-2022.
• Comparison of risk scores and hospitalization rates between different enrollment period switchers.

Main Results:

• An increasing share of Medicare Advantage enrollees switched plans outside the standard open enrollment period.
• Beneficiaries switching during alternative enrollment periods exhibited higher risk scores and hospitalization rates.
• Switchers to traditional Medicare or broader-network MA plans had higher pre-switching risk scores.

Conclusions:

• Flexible enrollment periods may improve plan choice but can exacerbate adverse selection.
• Higher-risk beneficiaries may disproportionately utilize flexible enrollment, potentially straining plan finances.
• Existing adverse selection mitigation policies may be insufficient with more flexible enrollment rules.