BACKGROUND: The 2003 Medicare Modernization Act established the Part D drug benefit in 2006. Because the benefit involves a voluntary enrollment process with numerous plan options, there has been concern about whether beneficiaries have adequate knowledge of the program, but research on this issue has been limited. OBJECTIVES: To examine Medicare beneficiary knowledge of the Part D program and estimate how knowledge affected voluntary enrollment decisions at the program's outset. METHODS: We linked data from the 2005 Medicare Current Beneficiary Survey with CMS administrative data regarding beneficiary 2006 drug coverage and market characteristics. We estimated a multivariate logistic regression model to explore the relationship between Part D knowledge and beneficiaries' voluntary enrollment in a Part D plan. RESULTS: At the inception of the Medicare Part D benefit, no single knowledge test question was correctly answered by more than three-fourths of beneficiaries. Correct responses to five knowledge test questions were positively associated with enrollment: "everyone has plan choices" (adjusted odds ratio = 1.4); "plans can change costs once per year" (aOR = 1.2); "beneficiaries must use plan pharmacies" (aOR = 1.5); "beneficiaries must pay a penalty if they enroll late" (aOR = 1.3); "assistance is available for low income beneficiaries" (aOR = 1.2). CONCLUSION: Beneficiary understanding of the Part D program in early 2006 was limited. Beneficiary knowledge of Part D program details was associated with enrollment in Medicare Part D. Efforts to educate Medicare beneficiaries about Part D may improve rates of prescription drug coverage.
