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FRIDAY, March 13 (HealthDay News) -- Most seniors facing the staggering choices of drug plans available through Medicare don't select the plan with the lowest costs, a new report says.
The report found that the more than 50 standalone drug plans in many states should let people pick the best value for their individual medical and financial needs, but most consumers aren't making the smart economic choice.
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"The idea that was touted, when it became clear that there would be so many plans available, was that seniors would compare plans and choose the best possible plan given their individual needs and economic circumstances," said Tricia Neuman, the Kaiser Family Foundation's vice president and director of its Medicare Policy Project.
But most people did not end up in the lowest-cost plan, she said.
The report, Choosing a Medicare Part D Plan: Are Medicare Beneficiaries Choosing Low-Cost Plans? was commissioned by the Kaiser Family Foundation. Its release is timely: Seniors have until March 31 to switch plans before they are locked into their choice for the rest of the calendar year.
"Elders are not choosing the lowest-cost option available to them -- and many elders don't even choose one of the few lowest-cost options," said report author Jonathan Gruber, a Massachusetts Institute of Technology professor of economics.
"Based on more detailed analysis, it looks like this is because elders pay too much attention to premiums and not enough attention to their out-of-pocket costs," he added.
The study found that only 6 percent of participants opted for the lowest-cost plan offered in their area in 2006. People could have saved an average of $520 if they had chosen the lowest-cost plan.
In addition, the 10 percent of seniors who chose one of the lowest-cost plans saved an average of $400 over those who enrolled in costlier plans. And the 53 percent of seniors who enrolled in one of the 25 percent lowest-cost plans saved an average of $220 over those who opted for more expensive plans, according to the report.
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