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

To mitigate adverse selection in Medicare Advantage (MA) and traditional Medicare plans, MA enrollees are only allowed to switch between MA plans or enroll in traditional Medicare during specific open enrollment periods. However, during the past decade, regulators relaxed these enrollment periods to facilitate switching throughout the year. Using administrative data from the period 2015-22, we documented that among incumbent MA enrollees, an increasing share of switching to other MA plans or traditional Medicare occurred outside the standard Medicare open enrollment period. Compared with Medicare open enrollment period switchers, alternative enrollment period switchers tended to have higher risk scores and hospitalization rates before switching. In addition, beneficiaries who switched to traditional Medicare or broader-network plans tended to have higher risk scores and hospitalization rates before switching than those who switched to other plans. Our results highlight a trade-off: Flexible enrollment periods may allow some beneficiaries to enroll in plans that better suit their needs but may also allow beneficiaries with higher medical costs to sort into certain MA plans or traditional Medicare, which potentially generates adverse selection if other selection mitigation policies are insufficient.