Health Literacy and Plan Choice: Implications for Medicare Managed Care

BACKGROUND: Older adults with inadequate health literacy may have difficulty selecting optimal coverage when faced with multiple health insurance plans to choose from. OBJECTIVE: This study sought to examine how health literacy affects which Medicare Advantage plans seniors select. METHODS: We surveyed 311 Medicare beneficiaries who did not have concurrent Medicaid coverage. Participants chose from three Medicare Advantage plans: (1) lower-premium, less coverage; (2) higher-premium, more coverage; and (3) an intermediate option. Adjusted associations between health literacy, plan choice, and the importance of plan attributes in decision-making were tested using ordered and multinomial logistic regressions. KEY RESULTS: Beneficiaries with inadequate health literacy chose the lower-premium, less coverage plan over the higher-premium, more coverage option compared to beneficiaries with adequate health literacy (p < .05) perhaps because participants with inadequate health literacy tended to rank the importance of plan attributes differently than those with adequate health literacy (p < .05). CONCLUSIONS: This evidence suggests there may be a disconnect among those with inadequate health literacy between attributes that were ranked as important and the plans they chose, resulting in choices that are not consistent with their preferences. Beneficiaries with inadequate health literacy may be at increased risk of selecting plans that do not meet their health needs, resulting in reduced access and higher costs. Medicare and consumer groups should support interventions to raise literacy levels and those that reduce the reliance on literacy when plan shopping. [HLRP: Health Literacy Research and Practice. 2018;2(1):e40–e54.] PLAIN LANGUAGE SUMMARY: We examined how health literacy affects seniors' choice of Medicare Advantage plans. Results indicate that beneficiaries with inadequate health literacy chose the lower-premium, less coverage plan over the higher-premium, more coverage option compared to beneficiaries with adequate health literacy. Beneficiaries with inadequate health literacy tended to rank the importance of plan attributes differently than those with adequate health literacy.