Gruber: Seniors Should Be Limited to Three Lowest Cost Medicare Part D Plans

PJ Tatler ^ | November 18, 2014 | Paula Bolyard

[2ndDivisionVet]

They'd be better off with "less scope for choosing the wrong plan."

In a 2009 paper, “Choice Inconsistencies Among the Elderly: Evidence from Plan Choice in the Medicare Part D Program,” Obamacare advisor Jonathan Gruber argued that there were too many Medicare Part D plans for seniors to choose from, which led them to make bad decisions when enrolling in a plan.

In the paper, written for the National Bureau of Economic Research, Gruber wrote with Jason T. Abaluck that the privatization of the public Medicare program had resulted in dozens of private insurers offering a wide variety of insurance products for seniors to choose from. The result of so many choices, Gruber wrote, is that seniors are not making decisions that are in their best interest. ”First, elders place much more weight on plan premiums than they do on the expected out of pocket costs that they will incur under the plan. Second, they substantially under-value variance reducing aspects of alternative plans. Finally, consumers appear to value plan financial characteristics far beyond any impacts on their own financial expenses or risk.”

The paper noted that while standard economic theory would suggest that expanded choice is a beneficial plan feature, “There are reasons to believe that the standard model is insufficient, particularly for a population of elders. There is growing interest in behavioral economics in models where agents are better off with a more restricted choice set,” Gruber wrote.

One of the reasons that choices should be restricted for seniors is their inability to understand the choices available to them. According to Gruber, “These issues may be paramount within the context of the elderly, given that the potential for cognitive failures rises at older ages.” He continued, “There is substantial scope for increases in utility if consumers made better choices, and some of these gains could be realized by restricting to the three lowest cost plans.”

Gruber admits that his models did not distinguish between the case of rational consumers choosing plans they trust and consumers making poor choices due to a lack of cognitive ability. “In either case,” he concluded, “our estimates imply that consumers would be better off if there were less scope for choosing the wrong plan.”

Gruber reiterated his assertion that seniors would be better off with fewer choices in a follow-up paper in 2013, “Evolving Choice Inconsistencies in Choice of Prescription Drug Insurance.”

“The bold experiment with consumer choice across health insurance plans embodied in the Medicare Part D program provides an excellent opportunity to assess how consumers perform in choosing insurance plans,” Gruber wrote. “We find that, using the best available data, consumers are very inconsistent in their choices, overweighting premiums relative to out of pocket costs, weighting plan characteristics above and beyond the effect on that consumer, and ignoring variance in coverage across plans.”

Gruber again acknowledged that standard economic theory would suggest that Medicare beneficiaries are better off choosing from a wide variety of plans that meet their needs, rather than constraining them to a limited set of choices being made by the government. But perhaps giving insight into what Obamacare masterminds envision, not only for the Medicare Part D program, but also for the future of the Obamacare exchanges, Gruber concluded, “There are a large number of behavioral economics models which suggest that in fact agents may be better off with more restrictive choice sets.”

[reformedliberal]

That is one end goal of communism, the reduction of choice. It’s just too stressful to have a variety of goods and services available. All that stress depletes the energy of the slaves. It creates unnecessary competition, with winners and losers. Losing is stressful. And unfair. The government should provide one of each type of good or service and you can pay the government for whatever they provide. And then thank them for the stress reduction. And for the fairness,too.

You’re welcome.

[faithhopecharity]

of course. people over 40 are stupid.
they will naturally make bad decisions for themselves.
far far better to have the government geniuses decide everything for the stupid sheeple.

[Intolerant in NJ]

Obamacare advisor Jonathan Gruber argued that there were too many Medicare Part D plans for seniors to choose from, which led them to make bad decisions when enrolling in a plan...ah well then, when Obama stole three-quarters of a trillion dollars from projected Medicare funding to give to other health-care to make the ACA actually look "affordable", it turns out he was really helping those silly old people who don;t know what's best for them by limiting the number of confusing choices they could make - now it all makes sense.....

[A Navy Vet]

Yeah, us old seniors don't know what a $5000 deductible is nor a 20-35% co-pay is. We're just to feeble minded to do the subtraction math from our premiums.

They should just shoot anyone over age 65 and be done with it. No more Medicare and gazillions of dollars coming in from those under 65 for their pet projects to get re-elected. Gawd, I hate politicians, even more than ambulance chasers you see every day on TV.

Cracked my wife up the other day after watching all the possible side affects of some drug. I said, "...also,if you wake up dead, make sure you contact your doctor". Well, it was funny at the time...you had to be there.

[Mears]

“Cracked my wife up the other day after watching all the possible side affects of some drug. I said, “...also,if you wake up dead, make sure you contact your doctor”. Well, it was funny at the time...you had to be there.’

---

It’s still funny ! :-)

I long for the good old days when prescription drugs couldn’t be advertised. There is a pill for EVERYTHING these days.

I agree with your wife about the side effects-—they are a hoot.

The same drug might cause diarrhea,constipation,insomnia,grogginess,weight loss,weight gain etc.

Oh well,what do I know-—I’m just another dumb old lady.

.

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[RJS1950]

If I saw that worthless POS on the street this 64 year old would wail on his ass until he was bloody and wimpering. The jail sentence would be well worth it.

[Ann Archy]

Obamacare was ALL ABOUT CONTROL OVER OUR LIVES!!! They will now know Everything about us.....and Republicans will NOT get the care that Democrats will get when this is all finished!!!

[catfish1957]

The jail sentence would be well worth it.

Just pelt him with rotten fruit. Then you have limited the charge to misdemeanor status. I plan to do the same thing to Christie if he comes to my Texas town to campaign.

[sphinx]

Suppose Pajama boy had only 3 restaurants to choose from or only 3 suits to purchase. His rhetoric might change...

No, Pajama Boy would be happy with three choices, provided that they were provided by government in his own best interest. All he really needs is the cafeteria at school, a Starbucks, and a Chinese restaurant to which he will take his dates, when he is old enough to have any.

[RJS1950]

To hell with rotten fruit; maybe dragging him through a hog pen and pushing his face into the “mud”. I would tend toward a rubber hose. With the right length and tensile strength it can be very effective.

[reg45]

Gruber thinks all seniors are senile like Harry Reid.

[vette6387]

“Hitler Finds Out Field Marshal Gruber Spilled the Beans:”

Yeah, Gruber is, in all probability also a member of “Capos for Islam” ( a branch of “I Hate Israel”) as well.

[Dqban22]

Not a single Republican senator or Congressman voted in favor of that monstrosity called Obamacare. It must be make perfectly clear that democrat Phd com man Gruber, called stupid not all the American voters, but just the democrat voters that put the “Liar in Chief” in the White House, in spite of his Marxist anti-American back ground, and all the Democrats legislators co-conspirators with the president and the MSM in the greatest deception against the American people in the history of the United States.

According to Obama, the MTI professor, a frequent visitor to the White House, was just an adviser. For his “invaluable advise and services” to the Obama administration professor Gruber received over 5.9 million dollars... Stupidity and corruption to the to nth power.

[TexasRepublic]

That slimy little communist worm should be frog marched to the nearest bullet pocked wall.

[nascarnation]

My medicare part D plan is with Express Scripts, not the federal govt. The others offered were WalMart, Humana, Cigna, AARP, etc. Is there one that is actually run by the feds?