Insurance trends for the Medicare population, 1991-1999

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Date: Spring 2002
From: Health Care Financing Review(Vol. 23, Issue 3)
Publisher: Superintendent of Documents
Document Type: Article
Length: 2,549 words

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INTRODUCTION

The 1990s saw the emergence of managed care into the Medicare marketplace. In the beginning of the decade nearly all beneficiaries were in the Medicare fee-for-service (FFS) program. In 1991 there were only 1 million Medicare risk health maintenance organization (HMO) members accounting for a little over 3 percent of the Medicare population. By 1999 there were over 6 million Medicare risk HMO members--a nearly 500-percent increase from 1991--comprising 17 percent of the Medicare population.

As managed care membership increased, there was a contraction in the number of beneficiaries with traditional individually purchased medigap (1) plans. The number of beneficiaries with private medigap plans declined by 2 million, or 20 percent, between 1991 and 1999. These plans, which provided supplemental insurance for 30 percent of Medicare beneficiaries in 1991, covered only 21 percent of beneficiaries in 1999. A large number of beneficiaries who left medigap plans switched to Medicare risk HMOs.

Enrollment in employer-sponsored supplemental plans increased slightly in the beginning of the decade, peaking in 1994 at 11.5 million beneficiaries holding these supplemental plans, and has since declined. As a result, employer-sponsored supplemental plans covered 33 percent of the Medicare population in 1999 versus 36 percent in 1991.

The number of beneficiaries that were not enrolled in a Medicare risk HMO plan and were also without supplemental insurance declined slightly from 13 percent of the Medicare population in 1991 to 11 percent in 1999.

DATA

Data from this article are from the Medicare Current Beneficiary survey (MCBS) Access to Care Files from 1991 to 1999. The MCBS is a continuous multi-purpose survey of a representative sample of the entire Medicare population. The Access to Care File is based on a sample of about 16,000 beneficiaries. The weighting method used for this sample makes the population representative of beneficiaries who were enrolled in Medicare for all 12 months of the year, regardless of living arrangement. Health insurance status is based on the beneficiary's insurance holdings on the day they were interviewed. Beneficiaries were classified into discrete insurance categories based on the following hierarchy: Medicare risk HMO, Medicaid, employer sponsored, medigap, other, and FFS only. Thus, if a beneficiary was in a Medicare risk HMO but also had an employer-sponsored supplemental plan they would be categorized as a risk HMO member and not included in the employer-sponsored category.

DISABLED VERSUS AGED BENEFICIARIES

The number of beneficiaries eligible for Medicare benefits due to a disability increased by 60 percent between 1991 and 1999 while the aged population increased by about 8 percent (Table 1). The disabled population and the aged population had significantly different supplemental insurance patterns but still shared some common trends over the decade. Both groups had large increases in risk HMO membership--nearly 500 percent growth for the aged and almost 800 percent growth for the disabled--and by 1999 risk HMOs covered 18 percent of the aged population and only 9 percent of the disabled population.

While the large increase in the number of disabled beneficiaries resulted in an...

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Gale Document Number: GALE|A87691176