Comparing US medicare coverage options as a contributing mechanism to sticking or switching to an insurance plan

In 2025, the US Medicare program is expected to spend over $1.1 trillion taxpayer dollars. A growing trend in the US Medicare program is more beneficiaries electing a private insurer, referred to as Medicare Advantage (MA), to manage their care. Since 2023, a slight majority of Medicare beneficiaries have elected to enroll in MA, yet little is understood about the mechanisms that drive beneficiaries toward their choices.

Our objective was to examine the association between comparing coverage options and 'switching' or 'sticking' with Fee-for-Service (FFS) Medicare or Medicare Advantage (MA). We conducted a panel study, using data from the 2019-2020 Medicare Current Beneficiary Survey within the Medicare community setting in the United States. Our sample was comprised of 6,214 Medicare beneficiaries.

Less than 3% of our sample switched coverage in 2020. 92% of switchers moved from FFS into MA. Comparing coverage (69.2%), having FFS (157.7%), and both having FFS and comparing coverage (242.3%) were associated with an increased probability of switching between programs. Potential mechanisms associated with comparing coverage and switching may be related to beneficiary examination of total out-of-pocket costs and access to supplemental benefits, such as supplemental financial protections, Part D prescription drug coverage, and other benefits.

Our findings suggest that when studies on Medicare switchers are used to extrapolate payment policy recommendations, comparing coverage should be addressed, as it is an important predictor on whether a beneficiary considers switching.