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How Much Choice Is Too Much? The Case of the Medicare Prescription Drug Benefit

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Objective. To study the impact of the number of choices and age on measures of performance in choosing a Medicare prescription drug plan.

Data Source/Study Setting. One hundred ninty-two healthy individuals age 18 and older, half age 65 or older, in Claremont, California.

Study Design. Participants were randomly assigned to 3, 10, or 20 hypothetical drug plans and asked four factual questions. Statistical models controlled for experimental group, age, gender, race, education, income, marital status, and health status.

Primary Findings. Older age and greater number of plans were significantly associated with fewer correct answers. Although older adults were less likely to identify the plan that minimized total annual cost, they were more likely to state that they were "very confident" they chose the correct plan.

Conclusions. The results raise concerns about the difficulties that older adults may have in navigating the wide range of drug plan choices available.

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