Numeracy and Medicare Part D: The Importance of Choice and Literacy for Numbers in Optimizing Decision Making for Medicare's Prescription Drug Program

• Published in: Psychology and aging Vol. 26; no. 2; pp. 295 - 307
• Main Authors: WOOD, Stacey, HANOCH, Yaniv, BARNES, Andrew, LIU, Pi-Ju, CUMMINGS, Janet, BHATTACHARYA, Chandrima, RICE, Thomas
• Format: Journal Article
• Language: English
• Published: Washington, DC American Psychological Association 01-06-2011
• Subjects: Adolescent; Adult; Adult. Elderly; Age Factors; Aged; Aged, 80 and over; Aging; Aptitude; Biological and medical sciences; Choice Behavior; Cognitive Ability; Decision Making; Developmental psychology; Drugs; Educational Status; Executive Function; Female; Fundamental and applied biological sciences. Psychology; Human; Humans; Intelligence; Life span; Literacy; Male; Mathematics; Medicare; Medicare Part D; Memory, Short-Term; Middle Aged; Neuropsychological Tests; Number Comprehension; Numeracy; Personality; Prescription Drugs; Psychology. Psychoanalysis. Psychiatry; Psychology. Psychophysiology; Regression analysis; United States; Young Adult; Young adults; United States; Human; Drug; Health insurance; Choice; Decision making; Literacy; Health policy; Language; Number; Medical prescription; Young adult; Elderly; Numeracy; Public health
• ISSN: 0882-7974; 1939-1498
• DOI: 10.1037/a0022028

Studies on decision making have come to challenge the idea that having more choice is necessarily better. The Medicare prescription drug program (Part D) has been designed to maximize choice for the consumer but has simultaneously created a highly complex decision task with dozens of options. In this study, in a sample of 121 adults, we examined the impact that increasing choice options has on decision-making abilities in older versus younger adults. Consistent with our hypotheses, we found that participants performed better with less choice versus more choice, and that older adults performed worse than younger adults across conditions. We further examined the role that numeracy may play in making these decisions and the role of more traditional cognitive variables such as working memory, executive functioning, intelligence, and education. Finally, we examined how personality style may interact with cognitive variables and age in decision making. Regression analysis revealed that numeracy is related to performance across the lifespan. When controlling for additional measures of cognitive ability, we found that although age was no longer associated with performance, numeracy remained significant. In terms of decision style, personality characteristics were not related to performance. Our results add to the mounting evidence for the critical role of numeracy in decision making across decision domains and across the lifespan.