Ethical Factors for HMO

The 2001 Survey of Involuntary Disenrollees was conducted to investigate the impact of Medicare+Choice (M+C) plan withdrawals on Medicare beneficiaries. Eighty-four per- cent of a total of 4,732 beneficiaries whose Medicare managed care (MMC) plan stopped serving them at the end of 2000 responded to the survey. Their responses indicated that the withdrawal of plans from Medicare af fected beneficiaries in terms of concerns about getting and paying for care, increased payments for premiums and out- of-pocket costs, and changes in health care arrangements. Of par ticular concern were the impacts on those in vulnerable sub- groups such as the disabled, less educated, and minorities.

INTRODUCTION

The Balanced Budget Act (BBA) of 1997 expanded the health care options potentially available to Medicare beneficiaries through the establishment of M+C, allowing benefi- ciaries to enroll in a variety of private health care options beyond the original Medicare fee-for-ser vice (FFS) program. However, although BBA 1997 increased the health care provider options available to seniors, the payment rates to plans were lower than expected. These rates, along with new administrative requirements, may have initi-

ated the withdrawal of many managed care organizations from the Medicare market (U.S. General Accounting Office, 2001).

The ef fect of withdrawals by MMC plans, at the individual beneficiar y level, can be disruptive, particularly for any ben- eficiaries who have to change providers. Statistics compiled from CMS’ 1998 reports indicate that Medicare health care plan withdrawals resulted in 407,000 bene- ficiaries (6.5 percent of M+C enrollees) making a plan change in Januar y 1999. In 2000, 327,000 beneficiaries (5 percent of M+C enrollees) were affected by plans’ withdrawals or reduction in ser vice areas. Some plans withdraw completely from MMC while others continue participation in Medicare but reduce their ser vice areas by no longer ser ving beneficiaries in some counties or ZIP codes. In 2001, 934,000 Medicare beneficiaries (15 percent of total enrollment in M+C) were forced to make new choices about their health plan cover- age when their Medicare health care plan withdrew from the program or reduced their ser vice areas. Most recently, 536,000 (10 percent of M+C enrollees) were affect- ed in 2002 (Gold and McCoy, 2002).

Few studies have documented the experi- ences these involuntary disenrollees face when they are forced to select new coverage upon withdrawal of their plan from the M+C Program (Kaiser Family Foundation, 1999; U.S. General Accounting Office, 1999; Gold and Justh, 2000). For that reason, CMS decided to conduct a survey to assess the ongoing impact of MMC market withdrawal on beneficiary coverage.

HEALTH CARE FINANCING REVIEW/Fall 2002/Volume 24, Number 1 95

Bridget C. Booske is with the University of Wisconsin at Madison. Judith L ynch is with RTI International. Gerald Riley is with the Centers for Medicare & Medicaid Ser vices (CMS). The research in this article was funded under HCFA Contract Number 500-95-0061 (TO#10). The views expressed in this arti- cle are those of the authors and do not necessarily reflect the views of the University of Wisconsin at Madison, R TI International, or CMS.

Impact of Medicare Managed Care Market Withdrawal on Beneficiaries

Bridget C. Booske, Ph.D., Judith L ynch, and Gerald Riley, M.S.P.H.

Most health maintenance organizations (HMOs) that participate in Medicare offer additional benefits outside the regular Medicare benefit package (Achman and Gold, 2002). Extra benefits commonly include low copayments, prescription drugs, unlimited hospitalization, and pre- ventive ser vices. Many beneficiaries have come to rely on the extra benefits they receive from their HMO, particularly pre- scription drug coverage. Replacing these benefits through Medigap insurance is usually ver y expensive, and may be unaf- fordable for some (Gold and Mittler, 2001). Joining another HMO or going to FFS may also force many beneficiaries to change doc- tors, creating dissatisfaction and disrupting existing patterns of care. Therefore, there has been concern among policymakers about the impact of the recent HMO with- drawals on the beneficiar y population (Barr y and Kline, 2002).

There were two previous national efforts specifically designed to assess the impact of the plan withdrawals and ser vice area reductions on beneficiaries.1 The first con- sisted of a sur vey sponsored by the Henr y J. Kaiser Family Foundation after the Januar y 1999 withdrawals. A report based on the sur vey results indicated that although most disenrollees fared relatively well after their HMO withdrew from Medicare, many experienced a reduction in supplemental benefits, an increase in pre- miums, and/or disruptions in their care arrangements (Kaiser Family Foundation, 1999). Problems were disproportionately experienced by disabled beneficiaries, racial and ethnic minorities, the poor and near poor, and those reporting fair or poor heath. The second effort consisted of a tele- phone sur vey of several hundred beneficia-

ries conducted by the Depar tment of Health and Human Ser vices’ Office of the Inspector General. The sur vey covered enrollee notification; information and assis- tance in exploring new insurance options; what option beneficiaries selected; changes in benefits and costs; problems encoun- tered; and satisfaction. The Office of the Inspector General sur vey was conducted twice, following the Januar y 1999 and Januar y 2000 withdrawals. These sur veys did not find severe problems, but no analy- ses were done for vulnerable populations.

A third study, by Gold and Justh (2000), involved a national sample of over 6,000 Medicare beneficiaries of whom 425 were in M+C plans that stopped ser ving enrollees at the end of 1999. (This sur vey was con- ducted as part of the larger monitoring M+C project of Mathematica Policy Research, funded by the Robert Wood Johnson Foundation.) A recent publication from this study summarizes the differences between plans that withdraw from M+C and those that remain (Achman and Gold, 2002). Withdrawing plans tend to have lower enrollments, offer less-generous ben- efit packages, had less stable benefits from 1999 to 2000, and faced competition prob- lems within their markets.

The purpose of the 2001 Sur vey of Involuntary Disenrollees (Center for Health Systems Research and Analysis and RTI International, 2001) was to understand how Medicare beneficiaries are affected by Medicare health plan withdrawals and reductions in ser vice areas. This article describes the methods and the results of that sur vey. Also, we discuss: • What types of beneficiaries are affected

by plan withdrawals. • What information beneficiaries receive

about plan withdrawals. • The extent to which beneficiaries under-

stand the implications of their plan’s with- drawal and their new coverage options.

96 HEALTH CARE FINANCING REVIEW/Fall 2002/Volume 24, Number 1

1 Another study looked at the impact of HMO withdrawals specifically on rural beneficiaries. University of Minnesota researchers sur veyed 1,093 rural beneficiaries who lost HMO coverage in Januar y 1999 (Casey, Astrid, and Moscovice, 2002). The sur vey was conducted from Februar y to May 2000.

• The impact on beneficiaries in terms of new coverage, concerns, costs, provider arrangements, and access to care.

METHODOLOGY

Design

The sur vey was conducted by mail with telephone followup of non-respondents. Data were collected between March and June 2001. (A copy of the sur vey is avail- able on request from the authors.) We designed two versions: the first targeted to sample members who did not have end stage renal disease (ESRD) and the second targeted to those who did. ESRD patients may be adversely impacted by plan with- drawals because they tend to have high health care expenses, and at the time that the sur vey was designed, they were not permitted to enroll in other MMC plans. Until the Medicare, Medicaid, and State Children’s Health Insurance Program (SCHIP) Benefits Improvement and Protection Act of 2000 (BIPA) was enacted in December 2000, ESRD beneficiaries in non-renewing plans could not join a new M+C plan. (The main goal of BIPA was to increase payments to M+C organizations to maintain and expand beneficiar y access to M+C plans. However, on implementation of BIPA in March 2001, only seven M+C organizations re-entered counties from which they had previously withdrawn or expanded into new counties [U.S. General Accounting Office, 2001]). Since the imple- mentation of BIPA, ESRD beneficiaries are allowed to enroll in another M+C plan if their plan terminates its contract with CMS. This provision applies to termina- tions occurring on or after the date of BIPA’s enactment and retroactively to ter- minations on or after December 31, 1998.

Both questionnaires contained the same questions, with the ESRD version contain- ing an additional three questions specifi- cally related to dialysis treatment. The top- ics included: • Questions about the sample member’s

former health insurance. • Choosing new health insurance. • Questions about the sample member’s

current health insurance. • Getting needed care since the sample

member left their former plan. • Impact on dialysis treatment (for ESRD

sample members only). • Respondent health status and demo-

graphic characteristics.

Sample Selection and Weighting

For the non-ESRD population, a sam- pling frame was constructed which includ- ed all enrollees, as of October 1, 2000, in plans that terminated or reduced their ser- vice areas effective Januar y 1, 2001. The reason for using a 3-month window was to capture people who stayed in the plan until the end of the year, as well as those who may have left earlier, in the event that there were differences between these types of enrollees. All beneficiaries who lived out- side the United States, deceased, and insti- tutionalized sample members were exclud- ed from the sampling frame. Once the frame for the non-ESRD population was constructed, beneficiaries were assigned to one of two strata—those who lived in areas where another MMC plan was avail- able after December 31, 2000, and those who lived in areas in which no other Medicare plan was available. A separate sample consisting of all Medicare benefi- ciaries who had ESRD who were affected by plans’ withdrawals and reduction in ser- vice areas was selected. No stratum for these sample members was defined since,

HEALTH CARE FINANCING REVIEW/Fall 2002/Volume 24, Number 1 97

at the time that the study was designed, ESRD patients would not be able to enroll in another MMC plan even if other Medicare health plans were available in their area on Januar y 1, 2001.

The sample sizes for the choice and no choice strata were based on a goal of obtaining 3,000 completed inter views with non-ESRD Medicare beneficiaries, and 385 completed inter views with Medicare bene- ficiaries with ESRD. The choice strata included 2,772 Medicare beneficiaries who lived in areas in which another Medicare health plan was available after December 31, 2000. The no choice strata included 1,422 Medicare beneficiaries who lived in areas in which no other Medicare health plan was available after December 31, 2000. The ESRD strata included 538 beneficiaries. Data collection activities resulted in an overall response rate of 83.7 percent. (The response rate was calculated using the fol- lowing formula: Numerator—the number of completed inter views. Denominator—all sample members in the sample minus those who were institutionalized or deceased, and those who reported that they were still enrolled in the sample plan or left the plan because they moved out of the plan’s ser- vice area. Questionnaires were considered complete if beneficiaries responded to at least one of the items concerning the impact of plan withdrawal. [Additional information about the completeness crite- ria are available on request from the authors.])

To adjust for the potential of differential non-response bias, we used logistic regres- sion to model the functional relationship between a set of predictors and a dichoto- mous response outcome and then used that model to construct response propensi- ty weights. The potential set of predictors available for both respondents and non- respondents included age, race, and geo- graphic area. Black persons and other

minority races had less than one-half the odds of a response than did white persons. This was the most significant effect in the model. Age was also a significant factor. The odds of a response steadily decreased with the age of the sample member. No change in odds was noted in the under age 65 population. Address fields that con- tained rural routes or post office boxes (along with variant abbreviations) had a lower odds of response. Address fields that were abnormally short or long had a higher odds of response. Abnormally long addresses often suggest that an individual is in the care of someone else which, in this case, may have increased the likelihood of response. Responses varied only slightly among the U.S. census divisions.

Data Analysis

Descriptive statistics and chi-square tests of independence were used to assess statistical associations between a number of potential outcomes of the plan with- drawals and beneficiar y characteristics. These outcomes include new coverage arrangements and the financial, psycholog- ical, and care-related impacts of the plan withdrawals from the Medicare Program. The results presented in this article are based on weighted data. A weighting model was developed incorporating both sample design and response propensity. Consequently, the data reported for the total sample reflects the total population of involuntary disenrollees. (Additional details are available within the final report avail- able on request from the authors [Booske et al., 2002]). Analyses were conducted using SUDAAN® software that appropri- ately accounts for the sample weighting approach in calculating standard errors. Findings of significance at the 99 percent probability level and differences of at least 10 percentage points are repor ted. In

98 HEALTH CARE FINANCING REVIEW/Fall 2002/Volume 24, Number 1

addition, where appropriate, results of mul- tivariate analysis (using logistic regres- sion) are reported to further examine the relationships between beneficiar y charac- teristics and the impact of plan with- drawals. Results are reported for signifi- cant logit models with a minimum Cox & Snell R-square of at least 0.10 or where the model increases the likelihood of predic- tion from the logistic model by at least 10 percent (versus a model that simply assigns all responses to the most frequent response categor y). Additional variables used in the logistic regression analyses, such as the MMC penetration rate groups and the pay- ment rates that M+C organizations receive per enrollee per month, were derived from CMS files, Internet site: http://www.cms.hhs. gov/healthplans/reportfilesdata/

RESULTS

Who are Affected by Plan Withdrawals?

Table 1 shows the characteristics of the three sample groups of beneficiaries who responded to the sur vey: those who lived in a county with a choice of another Medicare HMO, those in a county without another Medicare HMO alternative, and those with ESRD. The total column represents weighted data from all three strata. Thus, the total columns in selected tables reflect the weighted mix of those in counties with and without a Medicare HMO (as of Januar y 1, 2001) and of those with ESRD, i.e., in proportion to the composition of the entire population of involuntar y disen- rollees. Overall, 92 percent of the benefi- ciaries responding to the sur vey reside in a metropolitan county compared with 76 per- cent of Medicare beneficiaries nationally (Achman and Gold, 2002). However, there was a significant difference between the geographic location of the choice and no-

choice strata: only 3 percent of those with a choice of another HMO lived in a non-met- ropolitan area while 34 percent of the ben- eficiaries without another HMO available live in non-metropolitan counties.

Compared with CMS data on voluntar y disenrollees (those who leave Medicare HMOs of their own accord), enrollees (those who stay in an HMO), and involuntar y dis- enrollees (those in plans that leave the Medicare Program) are similar in age, sex, and education, but more likely to report their health to be fair or poor and less like- ly to be Hispanic (Figure 1).

Information about Plan Withdrawals

Sixty-six percent of beneficiaries first found out that their plan was going to stop covering them from the plan itself. The next most common source of information about the plan withdrawal came from the media, 18 percent of beneficiaries first found out that their plan was leaving the Medicare Program from newspapers, radio, or television.2 Ninety-six percent of beneficiaries recalled receiving a letter at some point from the plan about its impend- ing withdrawal.3

Only about 6 out of 10 beneficiaries indicat- ed they had enough information about their options when their plan stopped covering them. Disabled beneficiaries (under age 65) and the oldest-old beneficiaries were less like- ly to indicate that they received enough infor- mation about their coverage options when they heard that their plan would stop cover- ing them. Compared with other racial/ethnic groups, black beneficiaries were less likely to indicate that they had received enough

HEALTH CARE FINANCING REVIEW/Fall 2002/Volume 24, Number 1 99

2 These figures represent additional data from the 2001 Sur vey of Involuntar y Disenrollees that are not included in any of the tables. 3 This rate is significantly higher than the number of involuntar y disenrollees in the case studies who recalled receiving a letter from their plan (Grad and Hassol, 2002). They found that about 75 percent of beneficiaries recalled receiving a letter from their plan.

information. Those in poor health were also less likely than healthier beneficiaries to indi- cate that they received enough information about their coverage options (Table 2).

Knowledge of the availability of supple- mental insurance was somewhat common: 68 percent of beneficiaries were aware of the availability. Responses to the question

on availability of supplemental options may reflect beneficiar y experiences with health screening, i.e., some may have been turned down, and so the insurance is unavailable although it is likely that some of these responses reflect misunderstandings on the part of respondents about what options are available to them. Beneficiaries who

100 HEALTH CARE FINANCING REVIEW/Fall 2002/Volume 24, Number 1

Table 1

Survey of Involuntary Disenrollee Sample Strata, by Beneficiary Characteristics: 2001

Total Medicare HMO Available No Medicare HMO Available ESRD Characteristic (n=3,780) (n=2,215) (n=1,195) (n=370)

Percent Age Under 65 Years 7 7 7 16 65-74 Years 53 52 55 46 75-84 Years 33 33 31 34 85 Years or Over 7 7 7 5

Sex Female 57 58 54 44 Male 43 42 46 56

Race/Ethnicity White Non-Hispanic 84 84 84 61 Black 9 1 7 25 Hispanic 5 4 8 11 Other 2 2 1 2

Education Less than 9th Grade 13 12 18 19 Some High School 18 18 17 27 High School Graduate 36 36 37 29 Beyond High School 33 34 28 25

Self-Reported Health Status Excellent 6 6 5 2 Very Good 22 22 19 6 Good 37 37 38 21 Fair 28 28 29 41 Poor 8 7 1 3

Recent Hospitalizations At Least 1 in Past 12 Months 21 21 21 69 None in Past 12 Months 79 79 79 31

Location Metropolitan County 92 97 66 95 Non-Metropolitan County 8 3 34 5

Dual Eligibility Status Not Medicaid Eligible 97 97 96 9 Medicaid Eligible 3 3 4 1

NOTES: HMO is health maintenance organization. ESRD is end stage renal disease. Percentages are based on weighted data. The weighting incorporates both the sample design and response propensity. Consequently, the percentage in the total column cannot be calculated based on the weighted aver- age of the three component columns. Numbers may not sum to 100 percent due to rounding. Metropolitan/non-metropolitan county designation based on the 1993 Office of Management and Budget definition.

SOURCE: Booske, B.C., University of Wisconsin at Madison, Lynch, J., RTI International, and Riley, G., Centers for Medicare & Medicaid Services, 2001.

were disabled (under age 65), older, in the all other racial group (including Hispanic), and less educated beneficiaries were the least likely to report availability of supple- mental insurance options (Table 2).

Beneficiaries were asked what they thought would happen to them when their plan stopped covering them. Those who thought they would be covered by the original Medicare plan, covered through their current or former employer, would be able to select a new plan, or would have to purchase supple- mental insurance were considered to under- stand what would happen. (Those who thought they would have to purchase supple- mental insurance may believe that prudence or financial necessity demanded the purchase of supplemental insurance rather than it being a legal or program requirement. Conse-quent-

ly, these individuals were also considered to have understood what would happen.) Less than one-half of the beneficiaries thought that the original Medicare plan would cover them. Some beneficiaries thought they would be automatically enrolled in another HMO while only 2 percent thought they would be able to select a new plan. One in 10 beneficiaries either indicated that they did not know what would happen or did not respond to the ques- tion. Conversely, those who thought that they would end up with no health insurance or that they would be automatically enrolled in another HMO apparently did not understand the implications of their plan’s decision to stop covering them.4 Over one-quarter thought they would end up with no health insurance.

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0

Characteristic

P e rc

e n

t

50 Involuntary Disenrollees with HMO Choice

Involuntary Disenrollees without HMO Choice

Voluntary Disenrollees

Enrollees

Under 65 Years

75 Years or Over

Black Hispanic Less than High School

Graduate

Fair or Poor Health

30

15

20

10

5

45

40

35

25

NOTE: HMO is health maintenance organization.

SOURCE: Booske, B.C., University of Wisconsin at Madison, Lynch, J., RTI International, and Riley, G., Centers for Medicare & Medicaid Services, 2001.

Figure 1

Involuntary and Voluntary Disenrollees and Medicare Beneficiaries that Remain with their Managed Care Plan: 2001

4 Those who did not respond to this question or whose respons- es could not be coded were classified as not understanding.

Just over one-half of beneficiaries appeared to understand exactly what would happen when their plan left the Medicare Program (Table 2). There was less understanding of what would happen among beneficiaries who were less educated, in the all other racial group, or Hispanic. However, those who reported that they had received enough information about the plan withdrawals were more likely to

indicate they understood what would hap- pen than those who did not indicate that they had enough information.

New Coverage Arrangements

Beneficiaries were asked about their new coverage arrangements following their plan’s withdrawal from Medicare (Table 3). Respondents could indicate

102 HEALTH CARE FINANCING REVIEW/Fall 2002/Volume 24, Number 1

Table 2

Beneficiary Reports of Adequacy of Information and Availability of Supplemental Insurance and their Understanding of Implications of Plan Withdrawal, by Beneficiary Characteristics: 2001

Reporting Having Enough Reporting that Understood What Would Information when their Supplemental Insurance Happen when their Plan

Characteristic Plan Withdrew Option Available Withdrew1

Percent All Beneficiaries2 63 68 53

Age3 Under 65 Years 46 51 55 65-74 Years 64 71 55 75-84 Years 65 70 50 85 Years or Over 59 61 46

Race/Ethnicity3 White Non-Hispanic 65 72 56 Black 48 44 39 Hispanic 56 53 34 Other 60 65 35

Education3 Less than 9th Grade 56 55 39 Some High School 60 62 4 High School Graduate 65 71 55 Beyond High School 65 75 63

Self-Reported Health Status3 Excellent 63 62 45 Very Good 67 73 57 Good 66 72 54 Fair 59 63 51 Poor 49 61 47

End Stage Renal Disease3 No 63 68 53 Yes 55 67 47

Information About Plan Withdrawal3 Received Enough information — 77 58 Did not Receive Enough Information — 54 45 1 Percentage of beneficiaries who thought they would be covered by the original Medicare plan, covered through their current or former employer, would be able to select a new plan, or would have to purchase supplemental insurance. 2 n=3,780. 3 Chi-square for each column significant at 0.01 level.

NOTES: Percentages are based on weighted data. The weighting incorporates both the sample design and response propensity.

SOURCE: Booske, B.C., University of Wisconsin at Madison, Lynch, J., RTI International, and Riley, G., Centers for Medicare & Medicaid Services, 2001.

coverage under more than one arrange- ment so a hierarchical approach was used to assign them to the types of coverage. If respondents repor ted enrollment in a Medicare HMO, they were assigned to this categor y. For the remaining respon- dents (those who did not report enrollment in an HMO), if they reported that Medicaid

covered them, they were assigned to this categor y. This process was repeated for each categor y so that the final categor y represented all respondents who did not repor t that they were enrolled in a Medicare HMO, were covered by Medicaid, were not covered through a current or for- mer employer, and had no supplemental

HEALTH CARE FINANCING REVIEW/Fall 2002/Volume 24, Number 1 103

Table 3

Sample Strata, by Beneficiary Reports of New Coverage Arrangements after Plan Withdrawal: 2001

Medicare HMO No Medicare HMO Total Available Available ESRD

Coverage (n=3,780) (n=2,215) (n=1,195) (n=370)

Percent New Arrangements1 Enrolled in Medicare HMO 52 56 34 37 Covered by Medicaid 3 3 4 11 Covered Through Current or Former Employer 8 8 9 7 Have Supplemental Insurance 22 19 35 34 Covered by Original Medicare Only 15 15 18 11

Satisfaction with New Health Insurance Less Satisfied Now 37 37 4 36 About the Same Now 38 39 3 34 More Satisfied Now 17 17 19 24 Don’t Know or Missing 8 8 11 6

Payments for Monthly Premiums Pay More Now 56 54 63 57 Pay Same Amount Now 13 13 10 13 Pay Less Now 8 8 6 9 Don’t Pay Premiums2 13 14 9 9 Don’t Know or Missing 11 11 11 13

Former Plan Paid Cost of Medicines Yes 74 76 65 75 No 16 14 23 14 Don’t Know or Missing 10 10 12 11

Health Insurance Now Pays Cost of Medicine Yes 53 55 41 42 No 38 36 49 49 Don’t Know or Missing 10 9 11 10

Paying for Prescription Medicines Pay More Now 51 52 49 55 Pay Same Amount Now 25 25 25 18 Pay Less Now 10 10 10 17 Don’t Know or Missing 14 14 16 10 1 Respondents could indicate coverage under more than one arrangement so a hierarchical approach was used to assign new coverage arrange- ments. First, if respondents reported enrollment in a Medicare HMO, they were assigned to this category. Next, if applicable, they were assigned to Medicaid. This process was repeated for each category. The final category includes all respondents who did not report enrollment in a Medicare HMO, Medicaid, coverage through an employer, or supplemental insurance. 2 Beneficiaries who paid no premiums both before and after plan withdrawal.

NOTES: HMO is health maintenance organization. ESRD is end stage renal disease. Percentages are based on weighted data. The weighting incorporates both the sample design and response propensity. Consequently, the percentage in the total column cannot be calculated based on the weighted average of the three component columns. Numbers may not sum to 100 percent due to rounding.

SOURCE: Booske, B.C., University of Wisconsin at Madison, Lynch, J., RTI International, and Riley, G., Centers for Medicare & Medicaid Services, 2001.

health insurance. Thus, we designated these respondents as covered by original Medicare only.

Just over one-half of the involuntar y dis- enrollees reported enrollment in another HMO after their plan withdrew (Table 3). Fifteen percent of the involuntar y disen- rollees reported being covered by original Medicare only. The results of a logistic regression model to predict which benefi- ciaries would end up with only original Medicare are shown in Table 4. As might be expected, a market characteristic (the market penetration of MMC in an area) was a predictor of whether a beneficiar y would end up with original Medicare only. Beneficiaries in areas of high managed care penetration were less likely to end up with only original Medicare only after their plan withdrew. However, the model also suggests that those in vulnerable sub- groups, such as the disabled, and those who report their health to be fair or poor, were also more likely than other beneficia- ries to only have original Medicare cover- age. In addition, those who reported that they did not have enough information about plan withdrawals were also more likely to end up with Medicare only. However, caution is advised in interpreta- tion of these results since the multivariate model using logistic regression to predict whether a beneficiar y reported having tra- ditional Medicare coverage did not have as much explanator y power as other models derived from this study.

Those living in areas without a Medicare HMO and those with ESRD were far more likely to report having supplemental insur- ance than beneficiaries in areas with a Medicare HMO (Table 5). Beneficiaries who indicated that they had enough infor- mation about the plan withdrawals and those with more education were also more likely to report that they have supplemen- tal coverage. Beneficiaries who were dis-

abled, under age 65, in the all other racial group, Hispanic, and living in CMS region 65 were all less likely to report having sup- plemental insurance (Table 4).

These frequencies are based on benefi- ciaries’ reporting of their current health insurance coverage—and often do not cor- respond with administrative data. Conse- quently, caution is advised in interpreting these numbers, e.g., the 34 percent of ben- eficiaries who live in an area without anoth- er Medicare HMO, but reported belonging to an HMO. In general, there was over 90 percent agreement between CMS enroll- ment records and beneficiaries’ reports of not being in an HMO. However, when ben- eficiaries reported that they do belong to an HMO, CMS records only confirmed HMO membership in about 50 percent of these cases.

Beneficiaries in counties without another Medicare HMO available who reported enrollment in an HMO may have been cor- rect at the time of their survey response. The definition of whether a county offered a choice reflects whether there was a choice of another M+C HMO available for enroll- ment as of January 1, 2001. Subsequently, a few plans did expand their service into some counties (e.g., Texas, New York, and New Mexico as of March 1, 2001). Also, some Medicare HMOs imposed capacity limits. There are two types of capacity lim- its: (1) plans can request capacity limits be established prospectively to be applied when their enrollment reaches a certain level, or (2) plans can request that their enrollment level be limited to the number of beneficiaries currently enrolled. Conse- quently, at any point in time a plan with capacity limits may or may not actually be accepting new enrollees. Other HMOs only cover parts of counties (particularly group and staff models).

104 HEALTH CARE FINANCING REVIEW/Fall 2002/Volume 24, Number 1

5 CMS Region 6 consists of the following States: Arizona, Lousiana, New Mexico, Oklahoma, and Texas.

HEALTH CARE FINANCING REVIEW/Fall 2002/Volume 24, Number 1 105

Table 4

Results of Logistic Regressions of New Coverage for All Involuntary Disenrollees: 2001

Having Original Medicare Only Having Supplemental Insurance After Plan Withdrawal1 After Plan Withdrawal2

95 Percent 95 Percent Independent Variable Odds Ratio Confidence Interval Odds Ratio Confidence Interval

Intercept 0.15 0.10-0.22 3.33 2.42-4.59

Age Under 65 Years (Disabled) *1.89 1.29-2.77 *0.41 0.27-0.60 65 Years or Over 1.00 — 1.00 —

Sex Female 0.81 0.63-1.02 1.07 0.88-1.31 Male 1.00 — 1.00 — Race/Ethnicity All Other Racial Groups and Hispanic 1.45 0.07-1.98 *0.54 0.41-0.72 White Non-Hispanic 1.00 — 1.00 —

Education Less than 9th Grade 1.36 0.98-1.89 *0.67 0.50-0.91 9th Grade or More 1.00 — 1.00 —

Self-Reported Health Fair or Poor *1.58 1.22-2.05 0.83 0.67-1.03 Good or Excellent 1.00 — 1.00 —

Hospitalized in Past 12 Months Yes *0.65 0.48-0.89 1.15 0.89-1.47 No 1.00 — 1.00 —

CMS Region Region 63 *1.82 1.38-2.41 *0.58 0.45-0.74 Other Regions 1.00 — 1.00 —

County Non-Metropolitan 1.42 0.96-2.11 0.80 0.57-1.14 Metropolitan 1.00 — 1.00 —

Reported HMO Enrollment Yes NA NA *0.70 0.57-0.85 No — — 1.00 —

Reported Medicaid Enrollment Yes NA NA 1.01 0.67-1.51 No — — 1.00 —

Medicare Managed Care Market Penetration High (35-45 Percent) *0.44 0.22-0.86 *0.38 0.24-0.58 Moderate (15-34 Percent) *0.46 0.32-0.67 *0.62 0.47-0.82 Limited (6-14 Percent) 0.98 0.68-1.40 0.74 0.54-1.01 Minimal (1-5 Percent) 0.78 0.55-1.09 *1.39 1.02-1.89 None (No HMOs) 1.00 — 1.00 —

Medicare Monthly Payment Rate to Medicare+Choice Organization

Less than $525 *0.47 0.32-0.69 *2.90 2.08-4.04 $525 0.91 0.66-1.25 *1.52 1.19-1.93 More than $525 1.00 — 1.00 —

Information about Plan Withdrawal Not Enough Information *1.61 1.26-2.06 0.84 0.69-1.03 Enough Information 1.00 — 1.00 —

*p<0.05. 1 Model is significant. Cox & Snell R-square for dependent variable having Medicare only = 0.07. 2 Model is significant. Cox & Snell R-square for dependent variable having supplemental insurance = 0.12. 3 Centers for Medicare & Medicaid Services (CMS) Region 6 consists of the following States: Arizona, Louisiana, New Mexico, Oklahoma, and Texas.

NOTES: Overall sample size for these logistic regressions was 3,780. HMO is health maintenance organization. NA is not available. Metropolitan/non- metropolitan county designation based on the 1993 Office of Management and Budget definition. Medicare managed care market penetration groups based on characterization of Medicare markets by the Center for Studying Health System Change.

SOURCE: Booske, B.C., University of Wisconsin at Madison, Lynch, J., RTI International, and Riley, G., Centers for Medicare & Medicaid Services, 2001.

Also, the definition of choice does not address the availability of cost contract or private FFS plans or of HMO coverage that is offered to beneficiaries by a current or former employer or via participation in

Medicaid. In addition, some beneficiaries may not understand that if they continue to see a provider that was affiliated with their former HMO, their ser vices may now be covered under the original Medicare. Of

106 HEALTH CARE FINANCING REVIEW/Fall 2002/Volume 24, Number 1

Table 5

Results of Logistic Regressions of Enrollment in Another HMO for Beneficiaries Living in Counties with Choice of Another Medicare HMO: 2001

Enrolled in Medicare+Choice Plan Report Enrolling in Another after Plan Withdrawal, per HMO after Plan Withdrawal1 CMS Administrative Records2

95 Percent 95 Percent Independent Variable Odds Ratio Confidence Interval Odds Ratio Confidence Interval

Intercept 0.63 0.47-0.84 0.17 0.12-0.26 Age Under 65 Years (Disabled) 0.92 0.61-1.40 1.50 0.95-2.39 65 Years or Over 1.00 — 1.00 — Sex Female 1.16 0.94-1.42 *1.29 1.02-1.62 Male 1.00 — 1.00 — Race/Ethnicity All Other Racial Groups and Hispanic 1.03 0.76-1.39 0.94 0.68-1.30 White Non-Hispanic 1.00 — 1.00 — Education Less than 9th Grade 1.04 0.75-1.45 0.97 0.68-1.39 9th Grade or More 1.00 — 1.00 — Self-Reported Health Poor or Fair 0.85 0.67-1.07 0.82 0.64-1.05 Good or Excellent 1.00 — 1.00 — Hospitalized in Past 12 Months Yes 1.07 0.82-1.38 0.95 0.72-1.25 No 1.00 — 1.00 — CMS Region Region 63 *0.72 0.55-0.94 0.88 0.65-1.17 Other Regions 1.00 — 1.00 — County Non-Metropolitan 1.59 0.83-3.07 0.69 0.23-2.03 Metropolitan 1.00 — 1.00 — Medicare Managed Care Market Penetration High (35-45 Percent) *6.58 4.15-10.43 *22.89 13.59-38.54 Moderate (15-34 Percent) *3.91 2.99-5.12 *9.21 6.35-13.37 Limited (6-14 Percent) *1.74 1.27-2.38 *3.25 2.12-4.99 Minimal (1-5 Percent) 1.00 — 1.00 — Monthly Medicare Payment Rate to

Medicare+Choice Organization Less than $525 0.93 0.53-1.64 *0.35 0.14-0.83 $525 *0.70 0.54-0.90 0.87 0.66-1.14 More than $525 1.00 — 1.00 — Information about Plan Withdrawal Not Enough Information 0.81 0.65-1.01 *0.67 0.52-0.85 Enough Information 1.00 — 1.00 —

*p<0.05. 1 Model is significant. Cox & Snell R-square for dependent variable having Medicare only = 0.10. 2 Model is significant. Cox & Snell R-square for dependent variable HMO enrollment according to administrative records = 0.20 3 Centers for Medicare & Medicaid Services Region 6 consists of the following States: Arizona, Louisiana, New Mexico, Oklahoma, and Texas.

NOTES: Initial sample size for these logistic regressions was 2,215. HMO is health maintenance organization. Metropolitan/non-metropolitan county designation based on the 1993 Office of Management and Budget definition. Medicare managed care market penetration groups based on character- ization of Medicare markets by the Center for Studying Health System Change.

SOURCE: Booske, B.C., University of Wisconsin at Madison, Lynch, J., RTI International, and Riley, G., Centers for Medicare & Medicaid Services, 2001.

the beneficiaries who live in an area with- out another Medicare HMO, CMS admin- istrative files showed no record of M+C enrollment for 80 percent of the beneficia- ries who reported HMO membership. Of the remaining 80 beneficiaries, administra- tive records showed that as of Januar y 1, 2001, 27 were enrolled in cost plans and 24 enrolled in a private FFS which were not included in the definition of the choice/no- choice counties.

While over one-half of all beneficiaries reported membership in an HMO, this pro- portion was not constant across the three sample strata (Table 3). Beneficiaries in counties without a Medicare HMO and beneficiaries with ESRD were far less like- ly to report membership in an HMO. In fact, since only 37 percent of ESRD benefi- ciaries reported membership in an HMO (similar to the level for those in counties without Medicare HMOs), this suggests that few ESRD beneficiaries have benefited so far from the legislative changes in BIPA) of 2000. (CMS records actually only confirmed reports of HMO enrollment for 11 percent of the 38 percent of ESRD ben- eficiaries who reported enrollment in a M+C plan.) By far the most significant pre- dictor of whether a beneficiar y reported enrollment in another HMO in multivariate modeling was the market penetration of Medicare managed care in their county (Table 6). None of the beneficiar y demo- graphic characteristics were associated with a significant increase or decrease in the likelihood of reporting enrollment in another HMO. The odds of CMS Region 6 beneficiaries reporting enrollment in another HMO were 28 percent lower than those for beneficiaries living elsewhere in the United States. A logistic regression model of administrative records of HMO enroll- ment produced similar results with respect to market penetration; however, Region 6 was not significant in this model (Table 5).

Beneficiaries who indicated that they had received enough information about the plan withdrawals were more likely to enroll in an HMO, according to administrative records, than those who said they did not get enough information.

Impact of Plan Withdrawals on Beneficiaries

This section of results summarizes the impact of plan withdrawals on beneficia- ries’ care and provider arrangements. When asked about their level of satisfac- tion with their new coverage following the withdrawal of their former plan from Medicare, 37 percent of beneficiaries indi- cated that they were less satisfied with their insurance coverage now (Table 3). However, this may be due in part to lack of experience with their new coverage.

Another set of questions addressed the concerns that beneficiaries faced when they found out that their plan was withdrawing from Medicare. Fifty-one percent of the ben- eficiaries reported being very concerned about getting care that they needed. Respondents in counties with or without another Medicare HMO appeared not to dif- fer with respect to concerns regarding abili- ty to get care. However, there were signifi- cant differences between various subgroups with the more vulnerable expressing more concerns about their ability to get care after their plan withdrew: the beneficiaries who were disabled, less educated in the all other racial group or Hispanic, and reported fair or poor health were all more likely to report more concerns than other beneficiaries (Table 6). In particular, when all other con- ditions are held constant, the odds of those who are disabled being very concerned about getting care after their plan withdrew from Medicare are over 100 percent higher than those for aged beneficiaries. Information clearly reduced the likelihood of concerns:

HEALTH CARE FINANCING REVIEW/Fall 2002/Volume 24, Number 1 107

beneficiaries who did not have adequate information about the plan withdrawals were far more likely to have concerns about get- ting care than those with enough informa- tion (Table 6). Beneficiaries who live in non- metropolitan areas or areas with low MMC penetration were also more likely to be con- cerned.

Fifty-six percent of the beneficiaries who responded to the sur vey reported that they had to pay more in premiums after their plan withdrew (Table 3). However, many HMOs that have remained in Medicare have increased premiums and reduced benefits in the last few years. In their con- tinuing analysis of trends in benefits and

108 HEALTH CARE FINANCING REVIEW/Fall 2002/Volume 24, Number 1

Table 6

Results of Logistic Regressions of Concerns about Getting Care and Having to Pay More for Premiums after Plan Withdrawal: 2001

Being Very Concerned about Getting Having to Pay More for Premiums Needed Health Care after Plan Withdrawal1 after Plan Withdrawal2

95 Percent 95 Percent Independent Variable Odds Ratio Confidence Interval Odds Ratio Confidence Interval

Intercept 0.75 0.52-1.09 11.73 7.32-18.78

Age Under 65 Years (Disabled) *2.30 1.53-3.47 *0.52 0.31-0.88 65 Years or Over 1.00 — 1.00 — Sex Female *1.37 1.14-1.64 1.19 0.93-1.52 Male 1.00 — 1.00 — Race/Ethnicity All Other Racial Groups and Hispanic *1.66 1.26-2.18 0.77 0.52-1.13 White Non-Hispanic 1.00 — 1.00 — Education Less than 9th Grade *1.55 1.17-2.04 1.27 0.84-1.90 9th Grade or More 1.00 — 1.00 — Self-Reported Health Poor or Fair *1.56 1.29-1.89 1.07 0.81-1.41 Good or Excellent 1.00 — 1.00 — Hospitalized in Past 12 Months Yes *1.38 1.10-1.72 1.30 0.95-1.76 No 1.00 — 1.00 — CMS Region Region 63 1.05 0.83-1.33 2.33 1.63-3.33 Other Regions 1.00 — 1.00 — County Non-Metropolitan *1.42 1.01-2.00 *0.79 0.47-1.33 Metropolitan 1.00 — 1.00 — New Coverage Arrangement Medicare HMO *0.72 0.53-0.96 1.00 — Medicaid 0.75 0.44-1.28 NA 0.70-1.54 Employer-Provided *0.31 0.21-0.47 1.04 3.72-7.37 Supplemental *0.43 0.31-0.59 *5.24 — Original Medicare only 1.00 — NA — Medicare Managed Care Market Penetration High (35-45 Percent) 0.69 0.46-1.05 *0.44 0.26-0.73 Moderate (15-34 Percent) *0.74 0.57-0.96 *0.55 0.39-0.77 Limited (6-14 Percent) 1.05 0.78-1.41 *0.64 0.43-0.96 Minimal (1-5 Percent) 0.98 0.74-1.30 1.30 0.85-1.99 None (No HMO) 1.00 — 1.00 —

See footnotes at end of table.

premiums funded by the Commonwealth Fund, Achman and Gold (2002) noted that despite the congressional action to increase the payment rates that M+C orga- nizations receive, mean premium and cost- sharing levels in M+C plans continued to increase in 2001. For example, average monthly premiums went from $14.43 in 2000 to $22.94 in 2001. (These average monthly premiums are for all M+C plans including those with zero premiums. In 2001, 46 percent of M+C plans offered zero premium packages.)

The odds of the disabled having to pay more for premiums were lower than those of aged beneficiaries. Fewer disabled ben- eficiaries may have experienced increases in premiums because many are dually eli- gible for Medicare and Medicaid and pay no premium for Medicaid. However, the logistic regression excluded those who are dually eligible and those who report hav- ing Medicare only and controlled for other characteristics (Table 6). The odds of beneficiaries with supplemental insurance

reporting that they had to pay more for premiums after their plan withdrew were far greater when compared with beneficia- ries repor ting enrollment in another Medicare HMO (Table 6). Compared with beneficiaries in other regions, the odds of beneficiaries from CMS Region 6 having to pay more for premiums were also higher.

Seventy-four percent of beneficiaries reported that their former plan paid all or some of the cost of their prescription med- icines whereas, after the withdrawing plans stopped covering them, this percentage dropped to 53 percent (Table 3). This com- pares with a decrease in the proportion of all M+C enrollees with prescription drug coverage that went from 78 percent in 2000 to 70 percent in 2001 (Achman and Gold, 2002).

The loss of prescription drug coverage meant that 51 percent of involuntar y disen- rollees found themselves paying more for prescription medicines after their former plan withdrew from Medicare (Table 3). However, about 1 in 10 beneficiaries did

HEALTH CARE FINANCING REVIEW/Fall 2002/Volume 24, Number 1 109

Table 6—Continued

Results of Logistic Regressions of Concerns about Getting Care and Having to Pay More for Premiums after Plan Withdrawal: 2001

Being Very Concerned about Getting Having to Pay More for Premiums Needed Health Care after Plan Withdrawal1 after Plan Withdrawal2

95 Percent 95 Percent Independent Variable Odds Ratio Confidence Interval Odds Ratio Confidence Interval

Monthly Medicare Payment Rate to Medicare+Choice Organization

Less than $525 *0.67 0.47-0.95 1.36 0.84-2.18 $525 0.89 0.72-1.12 0.88 0.65-1.19 Greater than $525 1.00 — 1.00 —

Information about Plan Withdrawal Not Enough Information *2.55 2.11-3.07 NA — Enough Information 1.00 — NA —

*p<0.05. 1 Initial sample size for this logistic regression was 3,780. Model is significant. Cox & Snell R-square for dependent variable having Medicare only = 0.40. 2 Initial sample size for this logistic regression was 2,604 (excludes those with Medicare only, those with Medicaid coverage, and those who paid no premiums before and after plan withdrawal and those who did not know whether they paid higher or lower premiums). Model is significant. Cox & Snell R-square for dependent variable having to pay = 0.13 3 Centers for Medicare & Medicaid Services Region 6 consists of the following States: Arizona, Louisiana, New Mexico, Oklahoma, and Texas.

NOTES: Metropolitan/non-metropolitan county designation based on the 1993 Office of Management and Budget definition. Medicare managed care market penetration groups based on characterization of Medicare markets by the Center for Studying Health System Change. HMO is health mainte- nance organization. NA is not available.

SOURCE: Booske, B.C., University of Wisconsin at Madison, Lynch, J., RTI International, and Riley, G., Centers for Medicare & Medicaid Services, 2001.

not know or did not answer questions about their prescription drug coverage before or after the plan withdrawals.

About one in five beneficiaries in areas with another Medicare HMO indicated that they had to change their personal doc- tor or nurse after their former plan stopped covering them compared with 12 percent in areas without another HMO. Twenty- four percent of the beneficiaries in areas with another HMO who had to change their personal provider indicated that it was a big problem to find a new provider. Beneficiaries in areas with a choice of another Medicare HMO reported a higher incidence of changing providers compared with those in areas without a choice of another HMO (Table 7).

Four out of 10 beneficiaries reported that they had been seeing a specialist when their plan stopped covering them (Table 7). One in four of these beneficiaries (9 percent) reported that they had to stop seeing their specialist.

Twelve percent of the involuntar y disen- rollees indicated that they had trouble get- ting care they wanted or needed since their plan stopped covering them (Figure 2). This compares with 4 percent of all Medicare

beneficiaries in HMOs (Centers for Medicare & Medicaid Ser vices, 2002). Twenty-four percent, however, indicated that they had delayed seeking medical care because they were worried about the cost, compared with 3 percent of Medicare HMO beneficiaries. Fifteen percent report- ed that there were medicines prescribed for them that they did not get. Cost and the lack of insurance coverage were the most common reasons for not getting pre- scribed medicines.

There were clear and significant differ- ences in problems with access to care (Figure 2) between the beneficiaries who were disabled, age 65 or over, white non- Hispanic and those in the all other racial group or Hispanic, and between those who repor ted good or excellent health and those who reported themselves to be in fair or poor health.

DISCUSSION AND IMPLICATIONS

The characteristics of involuntar y disen- rollees living in areas with and without a choice of another HMO were quite similar with one major exception: only 3 percent of beneficiaries affected by the 2001 plan

110 HEALTH CARE FINANCING REVIEW/Fall 2002/Volume 24, Number 1

Table 7

Beneficiary Reports of Impact on Provider Arrangements: 2001

Medicare HMO Available No Medicare HMO Available Report (n=2,215) (n=1,195)

Percent Had to Change Personal Doctor or Nurse 22 12

(n=478) (n=144) A Big Problem to Get a Personal Doctor or Nurse 20 13 A Small Problem to Get a Personal Doctor or Nurse 26 17 Not a Problem to Get a Personal Doctor or Nurse 45 58 Don’t Know or Missing 5 1 Have Not Found a New Doctor Yet 6 11

Seeing a Specialist in Former Plan 41 38 (n=895) (n=448)

Had to Stop Seeing Specialist 24 16 Did Not Have to Stop Seeing Specialist 66 73 Don’t Know or Missing 8 10 Did Not Need to See a Specialist 2 2

NOTES: HMO is health maintenance organization. Percentages are based on weighted data. The weighting incorporates both the sample design and response propensity. For example, 22 percent of beneficiaries in areas with another Medicare HMO available had to change providers after plan withdrawal. Twenty percent of this 22 percent, or 20 percent of 478, reported a big problem getting a different personal provider.

SOURCE: Booske, B.C., University of Wisconsin at Madison, Lynch, J., RTI International, and Riley, G., Centers for Medicare & Medicaid Services, 2001.

withdrawals with a choice of another HMO lived in non-metropolitan counties, while 34 percent of beneficiaries without another HMO option lived outside of metropolitan areas. This difference highlights the con- tinued disparity noted by Achman and Gold (2002) in choices available to metro- politan and non-metropolitan beneficiaries. In contrast to the similarities between ben- eficiaries in the other two sample strata, beneficiaries in the ESRD sample were quite different from those without ESRD: beneficiaries with ESRD were more likely to be female, black, in fair or poor health, and had to have been hospitalized during the past year.

The findings show that there are some clear information and understanding gaps among beneficiaries, particularly those in more vulnerable subgroups, regarding the options available to them and the implica- tions of plans withdrawing from the Medi- care Program. Letters from the non-renew- ing plans were by far the most frequent first source of information about the plan withdrawal for the majority of disenrollees. The media (television, radio, or newspa- per) was the next most frequent source of information except for those in the more vulnerable subgroups such as the less edu- cated and all racial groups other than white non-Hispanic. Disabled beneficiaries who

HEALTH CARE FINANCING REVIEW/Fall 2002/Volume 24, Number 1 111

0

P e r c e n t

Characteristic

60 Needed care, but had trouble getting it.

Needed care, but delayed getting it due to cost.

Needed prescription drugs, but did not get them.

U nd er 65 Ye ar s

65 Ye ar s or O ve r

Le ss th an 9t h G ra de

9t h G ra de or H ig he r

W hi te N on -H is pa ni c

A ll O th er

H os pi ta liz ed in P as t 1 2 M on th s

N ot H os pi ta liz ed in P as t 1 2 M on th s

F ai r or P oo r

G oo d or E xc el le nt H ea lth

To ta l

20

50

40

30

10

NOTES: Percentages are based on weighted data. The weighting incorporates both the sample design and response propensity. Consequently, the percentage in the total bars cannot be calculated based on the average of the pair of bars for each characteristic.

SOURCE: Booske, B.C., University of Wisconsin at Madison, Lynch, J., RTI International, and Riley, G., Centers for Medicare & Medicaid Services, 2001.

Figure 2

Beneficiary Reports of Impact on Access to Care, by Beneficiary Characteristics: 2001

were in the all other racial group and in fair to poor health were less likely to indicate they received enough information about the plan withdrawals. These same groups were less likely to be aware of the avail- ability of supplemental health insurance. Other groups who were less aware of sup- plemental insurance options included those beneficiaries less-educated who were in the all other racial group (i.e., other than white) and less-educated benefi- ciaries were also less likely than other ben- eficiaries to understand what would hap- pen to them with respect to health care coverage when their plan left the Medicare Program. About 4 in 10 beneficiaries in the all other racial group or beneficiaries with less than a high school education under- stood what would happen compared to one-half of all beneficiaries. Beneficiaries’ reports of having enough information were clearly associated with their understanding of what would happen when their plan withdrew and awareness of supplemental health insurance options.

Compared with results from the Kaiser Family Foundation (1999) study of benefi- ciaries affected by plan withdrawals in January 1999, those affected by the Januar y 2001 withdrawals were less likely to repor t enrollment in another HMO (52 percent in 2001 compared with 77 percent in 1999) even though similar proportions of benefi- ciaries (four out of five) still had an HMO option available to them. As was true in 1999, reports of enrollment in another HMO were strongly related to the number of Medicare plans and their market pene- tration in an area. Furthermore, it should be noted that when compared with CMS enrollment records, beneficiaries apparent- ly overestimate membership in HMOs. Consequently, the true percentage that switches to another M+C is less than that derived from sur vey responses. While there are legitimate reasons why many

beneficiaries believe that they are enrolled in a Medicare HMO even though this is not confirmed by CMS data, the high level of discordance with CMS enrollment records may cause some to wonder about the valid- ity of other responses that beneficiaries gave. Although such discrepancies high- light the lack of understanding that many beneficiaries have about their coverage, beneficiaries’ reports of coverage arrange- ments do reflect their perceptions of what coverage they do or do not have. Since CMS records do not include information on supplemental or employer coverage, ask- ing beneficiaries about the coverage does provide some incremental information about levels of these types of coverage.

After MMC’s role in a local market, hav- ing enough information was the next most likely predictor of beneficiaries choosing to enroll in another HMO. As opposed to reverting to original Medicare coverage, joining another HMO requires a conscious action on behalf of the beneficiar y. Those who felt they did not have enough informa- tion may not have known that there was another HMO that they could join.

The other significant predictor of benefi- ciaries reporting HMO enrollment was living in a region other than CMS Region 6. Even after accounting for the lower availability of plans to beneficiaries in Region 6 (the aver- age number of plans for a Region 6 benefi- ciary was one versus two for beneficiaries in other parts of the country), beneficiaries in Region 6 were less likely to enroll in another HMO and they were also less likely to have supplemental insurance coverage. A more detailed examination in particular markets within Region 6 might shed some light on the particular environment that beneficiaries in this region face, e.g., case studies by Grad and Hassol (2002) of involuntary disenrollees identified a unique situation in Houston, Texas in 2000 when the only remaining HMO in the area reached its capacity limit in

112 HEALTH CARE FINANCING REVIEW/Fall 2002/Volume 24, Number 1

September of that year and no longer accept- ed any new enrollees. Stuber et al. (2002) also examined the Houston market in their case studies of seven markets from which M+C plans withdrew. They noted the disrup- tion of provider networks that often precedes a plan’s decision to withdraw from a M+C market: in Houston, 27 percent of primary care physicians left a plan’s network after one year. Eighty-six percent of Region 6’s benefi- ciaries and 22 percent of all beneficiaries who responded to the 2001 survey were from Texas.

Reports of supplemental health insurance were strongly related to low MMC penetra- tion, i.e., beneficiaries with fewer managed care options did turn to supplemental insur- ance. However, beneficiaries in vulnerable subgroups, such as the disabled, less edu- cated, and those in the all other racial groups or Hispanic beneficiaries, were less likely to report having supplemental insur- ance than other beneficiaries. Sixty-six per- cent of those with original Medicare cover- age only, i.e., without supplemental insur- ance, reported that they did not have sup- plemental insurance because it cost too much. This percentage was even higher (79 percent) for those in areas without a choice of another HMO. However, ESRD beneficia- ries without supplemental insurance were almost as likely to cite not applying for it or thinking that they would be turned down as they were to cite its cost as the main reason for not having supplemental insurance. In addition to the financial barriers to acquir- ing supplemental coverage, lack of informa- tion appears to be a barrier to having sup- plemental insurance. Those who indicated that they had enough information about the plan withdrawals were more likely to have supplemental coverage than those who did not have enough information.

In examining the impact of plan with- drawals on beneficiaries, we looked at ben- eficiaries’ concerns when hearing about

the plan withdrawals, the impact on benefi- ciaries’ costs, provider arrangements, and access to care. Approximately three out of ever y four beneficiaries reported that they were somewhat or ver y concerned about being able to pay for health care when their plan withdrew from the Medicare Program. A similar, but not entirely over- lapping, proportion of beneficiaries were also concerned about getting care while concerns about having to change providers were not quite as widespread, but still con- siderable. Again, the more vulnerable sub- groups, including the disabled, less-educat- ed, people in the all other racial group (other than white non-Hispanic), and in fair or poor health, were disproportionately affected. Beneficiaries in non-metropolitan areas with low MMC penetration were also more concerned by the plan withdrawals. Having enough information reduced, but did not eliminate concerns about the impact of plan withdrawals.

Plan withdrawals affected just over one- half of beneficiaries with higher premiums. However, as previously mentioned, the average monthly premiums increased for all M+C enrollees along with increases in copayments and reductions in benefits. For involuntar y disenrollees, higher premiums were more likely to come from acquiring supplemental insurance than from higher premiums due to enrollment in another HMO. Consequently, those in the more vulnerable subgroups were less likely to report paying more since they were less likely to have supplemental coverage. It is therefore likely that in the tradeof f between higher premiums versus lower benefits, the vulnerable were forced by cir- cumstance to go with lower benefits. In an effort to keep our sur vey to a manageable length for respondents and due to the known unreliability of reports of specific benefit details, the only specific benefit about which beneficiaries reported was

HEALTH CARE FINANCING REVIEW/Fall 2002/Volume 24, Number 1 113

prescription drug coverage. About one in five beneficiaries lost prescription drug cov- erage as a result of their plan withdrawal. The disabled and those in fair or poor health were again impacted more than oth- ers by having to pay more for prescription medicines. Those in areas without a choice of another HMO were less likely to report having prescription drug coverage than those in areas with at least one HMO option.

Disruptions in provider arrangements were less widespread than some of the other outcomes of the plan withdrawals: only one in five beneficiaries indicated that they had had to change their personal doc- tor or nurse after their plan withdrew from Medicare. This was similar to the rate found in the Kaiser Family Foundation (1999) study. One out of 10 total beneficia- ries had to stop seeing a specialist (some- what lower than the rate found in the Kaiser study). Although the rate of disrup- tion was not as high as might have been predicted, there were significant differ- ences within the involuntar y disenrollee population. Those in areas with a choice of another HMO were more likely to report having to change their personal doctor or nurse than those without another HMO option. Among those who were seeing a specialist when their plan withdrew, the disabled and those in fair or poor health were more likely to have to stop seeing their specialist. As would be expected, the potential for disr uption in provider arrangements was a tradeoff that benefi- ciaries had to deal with in exchange for HMO coverage and the potential for more comprehensive benefits. Those who did not enroll in a different HMO were less likely to have to change providers.

In terms of access to care, one in 10 ben- eficiaries who needed care after their plan withdrew indicated that they had trouble getting care. However, one in five benefi- ciaries delayed seeking care because of

being worried about the cost and 15 per- cent did not get medications that had been prescribed for them. This rate was three times higher than the rate found in the Kaiser study reflecting, perhaps, the increasing concerns about the costs of pre- scription drugs. Again, it was the benefi- ciaries who were disabled, in the all other racial group or Hispanic, and in fair or poor health whose access to care was most affected.

Clearly, the withdrawal of plans from the Medicare Program affected large numbers of beneficiaries causing at least short-term anxiety, higher costs, and/or disruptions in health care. However, what is of contin- uing concern is the effect of these with- drawals on the most vulnerable. While HMOs that have managed to stay in the Medicare market may continue to offer beneficiaries an attractive alternative to original Medicare, if and when the plans leave Medicare, thousands of disabled, minority, less educated, and sick beneficia- ries are left uncertain about their options, concerned about costs (particularly of pre- scription drugs), and less likely to get needed care. One strategy that appears to amelio- rate some, but not all of these problems is the provision of information about what will happen when a plan leaves and what, if any, options are available. However, the beneficiaries most likely to report they did not have enough information were those with the least education, the ver y old and the disabled, i.e., the beneficiaries who are probably least able to process additional information. Consequently, the problem may not have been a lack of information, but beneficiaries may have found it to be too much or too confusing. Providing more information in the future to them without simplifying it may actually be counterpro- ductive. Furthermore, as an anonymous reviewer pointed out, it seems that, no mat- ter how hard agencies such as CMS tr y to

114 HEALTH CARE FINANCING REVIEW/Fall 2002/Volume 24, Number 1

provide simplified material, there is still going to be a population that does not understand their choices or the implica- tions of these choices while others are sim- ply not motivated enough to tr y to under- stand. Consequently, rather than simply providing more information, descriptions of the specific implications of plan with- drawals on beneficiaries and their options for coverage should be tailored to meet the specific needs and interests of these vul- nerable subgroups.

REFERENCES

Achman, L., and Gold, M.: Medicare+Choice 1999- 2001: An Analysis of Managed Care Plan Withdrawals and Trends in Benefits and Premiums. The Commonwealth Fund, Publication Number 497. New York, New York. Februar y 2002. Internet address: http://www.cmwf.org Barr y, C.L., and Kline, J.: Medicare Managed Care: Medicare+Choice at Five Years. Issue Brief Number 537. The Commonwealth Fund. New York, New York. April 2002. Internet address: http://www.cmwf.org Booske, B.C., L ynch, J., Kenyon, A., and Scheffler, S.: Medicare Beneficiaries Who Involuntarily Disenroll from Their Health Plans. Final Report to the Centers for Medicare & Medicaid Ser vices, Contract Number 500-95-0061, (TO#10). March 2002. Casey, M., Astrid, K., and Moscovice, I.: Medicare Minus Choice: The Impact of HMO Withdrawals on Rural Medicine Beneficiaries. Health Af fairs 21(3):192-199, May/June 2002. Center for Health Systems & Analysis and BTI International: 2001 Survey of Involuntary Disenrollees. Madison, WI. Winter/Spring 2001. Centers for Medicare & Medicare Ser vices: Unpublished data from the 1998 Medicare Current Beneficiar y Sur vey. Baltimore, MD. 2002. Gold, M., and Justh, N.: Forced Exit: Beneficiaries in Plans Terminating in 2000. Monitoring Medicare+Choice, Fast Facts Number 3, September 2000. Internet address: http://www.mathemati- ca.mpr.com

Gold, M., and McCoy, J.: Choice Continues to Erode in 2002. Monitoring Medicare+Choice, Fast Facts Number 7, Januar y 2002. Internet address: http://www.mathematica-mpr.com Gold, M., and Mittler, J.: The Structure of Supplemental Insurance for Medicare Beneficiaries. Monitoring Medicare+Choice, Operational Insights Fast Facts Number 3, June 2001.Internet address: http://www.mathematica-mpr.com Grad, O., and Hassol, A.: Involuntary Disenrollment from Medicare+Choice Medicare Managed Care Plans: Experiences of Beneficiaries in Six Communities. Final Report to Centers for Medicare & Medicaid Ser vices. Abt Associates Inc. Cambridge, MA. September 2001. Kaiser Family Foundation: How Medicare HMO Withdrawals Af fect Beneficiary Benefits, Costs and Continuity of Care. The Henr y J. Kaiser Foundation, Menlo Park, CA. November 1999. Stuber, J., Dallek, G., Edwards, C., et al.: Instability and Inequity in Medicare+Choice: The Impact on Medicare Beneficiaries. Executive Summar y Number 496. The Commonwealth Fund. New York, New York. Januar y 2002. Internet address: http:// www.cmwf.org U.S. General Accounting Office: Medicare+Choice: Recent Payment Increases Had Little Ef fect on Benefits or Plan Availability in 2001. GAO-02-202. U.S. General Accounting Office. Washington, DC., 2001. U.S. General Accounting Office: Medicare Managed Care Plans: Many Factors Contribute to Recent Withdrawals; Plan Interest Continues. GAO/HEHS- 99-91. U.S. General Accounting Office. Washington, DC. April 1999.

Reprint Requests: Bridget Booske, Ph.D., University of Wisconsin-Madison, 610 Walnut Street, Number 1167, Madison, WI 53726. E-mail: [email protected]

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