Examining Consumer Preferences for Medicare Part D Prescription Drug Plans with Conjoint Analysis
by La’Marcus Wingate, University of Tennessee
Medicare costs, in particular, represent an increasingly important issue for seniors in regards to retirement security and how their income is spent. The average expenditures for the premiums, copayments, and deductibles associated with Medicare Part B and Medicare Part D plans currently represents approximately 30 percent of the average Social Security benefit, but by 2040 these health care expenses alone will represent over half (53 percent) of the average Social Security Benefit. Much attention has been paid to the Medicare Part D Prescription Drug Benefit, as it has over 26 million enrollees ever since it was signed into law. Sparse data is available on how much seniors are willing to pay for specific components of the plan, so even though pending legislation may require major changes in the structure of the Medicare Part D Prescription Drug Plans, little is known about how these changes may affect seniors’ preferences for these plans.
This proposal will use conjoint analysis to evaluate the relative importance of different attributes for Shelby County seniors in the Medicare Part D Prescription Drug Plan, and also a market simulation will be performed in order to assess whether the data gathered in this study is able to accurately depict market share in the insurance market. If the simulation is successful, then the model will be able to prospectively forecast the market share of hypothetical plans in the wake of changing structure due to possible legislative changes.
The investigator will survey approximately 235 seniors in senior centers. The analysis will look at several components of prescription drug plans including premium price, coinsurance, deductibles, amount of insurance available in the “coverage gap”, the mechanisms used by insurance companies to control utilization, access to pharmacies, and the ease of access to comprehensive pharmacist review of medications. Adaptive Choice Based Conjoint Analysis will be employed in establishing the relative importance of each of these attributes for seniors in determining their choice of prescription drug plans by use of a multinomial logit model. Several other characteristics will be accounted for including income, risk factors for disease, beliefs about medicine, the respondents’ preferences for receiving pharmaceuticals, and the respondents’ expected utilization patterns.