Medicare drug plan struggling because of too much choice

Tags: Communication, Marketing, Tyranny of too much

Also over the weekend, The New York Times noted that the current administration has mounted yet another campaign to sell the benefits of the new prescription drug plans to the nation. But frankly, these guys have an uphill battle given that:

In a stop here, four top Bush administration officials, including the surgeon general of the United States, said the drug benefit would be a boon to retirees, worth $1,300 a year to a typical recipient and much more to those with low incomes.

But the officials offered none of the details that would have allowed beneficiaries to judge for themselves. Crucial information, like the monthly premiums and the names of covered drugs, will not be available until mid-September.

After hearing federal officials praise the program for about 45 minutes, Joan M. Jenness, 72, of Bridgton, Me., said: "I heard nothing I had not heard before. I still have lots of questions."

So they can't say how much it will cost or what drugs it will cover, but they are trying to convince people to sign up. Wow. That type of marketing in a corporation would probably get a marketing manager fired. But even more significant is a comment made late in the article about the fact that the array of choices being offered is actually a negative.

stimates of enrollment nationwide are uncertain. In the Federal Register of Jan. 28, the Bush administration predicted that 39 million people would receive drug coverage in 2006 through a Medicare plan or an employer-sponsored health plan subsidized by Medicare. In June, Michael O. Leavitt, the secretary of health and human services, predicted that 28 million to 30 million people would receive such coverage.

Carol S. Rancourt, coordinator of health insurance counseling at the Southern Maine Agency on Aging, said, "My biggest fear is that people will be confused by the large number of options, will be shocked into inertia and will just do nothing."

Many people are automatically enrolled in Medicare when they turn 65, Ms. Rancourt said. But, she added, most beneficiaries must "make an affirmative choice to enroll in the drug benefit."

Ms. Rancourt's fears are justified. Studies with retirement plans show that the more choices that are given, the lower the rates of enrollment. It's just another proof point that the tyranny of too much applies just as much to government programs as it does to media and advertising.