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PubMed1994

Health plan choice in the Twin Cities Medicare market.

This paper examines the relationship between characteristics of Medicare beneficiaries and their choice of health plan in the Twin Cities during 1988. This analysis provides the first comparison of beneficiaries in the basic fee-for-service (FFS) Medicare sector (without a supplementary policy) to beneficiaries in the FFS sector with a supplementary policy, enrollees in independent practice associations (IPAs), and network health maintenance organizations (HMOs). The site and time period are important because there were five large, mature HMOs with TEFRA-risk contracts operating at that time, enrolling 50% of Medicare beneficiaries in the market area. We find that the oldest, poorest and, to a lesser extent, the sickest Medicare beneficiaries were most likely to have basic FFS Medicare coverage without supplementary insurance. The youngest enrollees are found in network HMOs. The availability of group coverage and premium subsidies are positively associated with choice of FFS with a supplementary policy. Government policy concerning Medicare HMO premiums appears to contribute to the poorest beneficiaries facing the highest out-of-pocket costs.

Age Factors↗