Administrative Burden

Administrative Burden

Policymaking by Other Means

Pamela Herd, Donald P. Moynihan

The hope that a consumer will use information to choose wisely becomes more distant as more information must be processed across a wider array of choices. A range of studies show that more choices can actually make Medicare consumers worse off. Fewer choices increase older adults’ ability to pick the plans that best meets their needs for the lowest cost. 52 This is not relevant only for entry into the program. A large number of choices increase “stickiness”—that is, the tendency to stay with the default option. 53 Indeed, fewer than one in ten Medicare beneficiaries actually change plans during open enrollment. 54 As fewer people switch, the benefits of market-based competition erode.

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