WASHINGTON, D.C. - According to a study released by AARP's Public Policy Institute (PPI), over one-half (56%) of people receiving Medicare have trouble understanding comparative information about some of their health plan options.

In spite of an unprecedented effort by federal agencies, health providers, consumer advocates and others to educate beneficiaries about their health plan options, the study found that older and less educated beneficiaries are less likely to understand comparative health plan data. Those who have these difficulties are more likely to say they find making decisions a burden and want expert help. Nevertheless, they are no more likely than others to actually seek such help.

AARP Director of Legislation and Public Policy John Rother said, "Given the newly announced intention of the Centers for Medicare and Medicaid Services (CMS), formerly HCFA, the policy recommendations in this study should help build strategies to educate and inform people about important health care choices."

"Those who are less able to understand plan options say they want to delegate decision making to others, but aren't necessarily doing so. This presents a great challenge," said Rother. "First, we must identify those who are having difficulty using information, and then we must find ways to help them understand their options and make decisions that work for them."

He added, "This finding is not only significant when determining the role of consumer choice in a restructured Medicare program, but has equal significance in the design of the Medicare prescription drug benefit and how we educate beneficiaries."

University of Oregon's Dr. Judith Hibbard, PhD., the lead researcher in the study conducted for AARP in collaboration with the Health Care Financing Administration (HCFA) explains, "Recent and proposed changes in the Medicare program rely on beneficiaries being able to make informed choices that will reflect their needs and preferences. When individuals lack the necessary skills to do so, more information and more choice are considered an unwelcome burden."

Dr. Hibbard appeared today before the Senate Finance Committee. She advised committee members of the importance of ensuring adequate funding for beneficiary education and outreach. "It is challenging to target programs to the diverse segments of the Medicare population," she said. "The Centers for Medicare and Medicaid Services must be given the resources to do the job effectively."

Dr. Hibbard said, "If informed choice is key to today's Medicare, we must develop better strategies to help beneficiaries with their Medicare decisions." She outlined some potential strategies including:

• Investigate ways to make the information easier to understand and more available to lower-skilled beneficiaries;
• Screen the population to identify those who need help and provide the necessary assistance;
• Offer fewer health plan types;

Hibbard believes the most successful approach would be a strategy that includes all three elements.

A related study published in the May/June issue of Health Affairs compared consumers under age 65 with Medicare beneficiaries 65 years of age and older. This study found that, compared to their younger counterparts, older consumers have much more difficulty using information to inform health plan choice.

With continued emphasis on choice in the Medicare program, and the possibility that private health plans may administer a Medicare prescription drug benefit, the study raises serious questions. Rother said, "If Medicare is going to include more choices to beneficiaries, then we must do a better job making sure they fully understand their options."

AARP is a non-profit, nonpartisan membership organization for people 50 and over. AARP provides information and resources; advocates on legislative, consumer and legal issues; assists members to serve their communities; and offers a wide range of unique benefits, special products, and serves for members. These benefits include AARP Webplace, Modern Maturity and My Generation magazines, the monthly AARP Bulletin. Active in every U.S. state and territory, AARP celebrates that age isn't just a number -- it's about how you live your life.

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