Traditional Medicare supplemental insurance and the rise of Medicare Advantage.

OBJECTIVES: Most Medicare beneficiaries obtain supplemental insurance or enroll in Medicare Advantage (MA) to protect against potentially high cost sharing in traditional Medicare (TM). We examined changes in Medicare supplemental insurance coverage in the context of MA growth. STUDY DESIGN: Repeated cross-sectional analysis of the Medicare Current Beneficiary Survey from 2005 to 2019. METHODS: We determined whether Medicare beneficiaries 65 years and older were enrolled in MA (without Medicaid), TM without supplemental coverage, TM with employer-sponsored supplemental coverage, TM with Medigap, or Medicaid (in TM or MA). RESULTS: From 2005 to 2019, beneficiaries with TM and supplemental insurance provided by their former (or current) employer declined by approximately half (31.8% to 15.5%) while the share in MA (without Medicaid) more than doubled (13.4% to 35.1%). The decline in supplemental employer-sponsored insurance use was greater for White and for higher-income beneficiaries. Over the same period, beneficiaries in TM without supplemental coverage declined by more than a quarter (13.9% to 10.1%). This decline was largest for Black, Hispanic, and lower-income beneficiaries. CONCLUSIONS: The rapid rise in MA enrollment from 2005 to 2019 was accompanied by substantial changes in supplemental insurance with TM. Our results emphasize the interconnectedness of different insurance choices made by Medicare beneficiaries.

Epidemiology and healthcare utilization of neurogenic bladder patients in a US claims database.

AIMS: To characterize the patient profile, medication utilization, and healthcare encounters of patients with neurogenic bladder dysfunction related to incontinence. METHODS: Medical and pharmacy claims were retrospectively analyzed from April 1, 2002 to March 31, 2007 to characterize neurogenic bladder patients. There were 46,271 patients in the Neurogenic bladder cohort, and 9,315 and 4,168 patients in Multiple Sclerosis (MS) and Spinal Cord Injury (SCI) subcohorts, respectively. Demographic data, concomitant diseases, use of overactive bladder (OAB) oral drug, and healthcare encounters were summarized using descriptive statistics. RESULTS: The mean age of neurogenic bladder patients was 62.5 (standard deviation 19.6) years. A high frequency of lower urinary tract infections (UTIs; 29%-36%), obstructive uropathies (6%-11%), and urinary retention (9%-14%), was observed. Overall, 33,100 (71.5%) patients were taking an OAB oral drug; 10,110 (30.5%) patients discontinued and did not restart. During the one-year follow-up period, 39.0% (8,034) of neurogenic bladder patients had a urology visit, 31.7% (14,679) had a neurology visit, 33.3% (15,415) were hospitalized, and 14.4% (6,646) were in a nursing home (highest rates observed in SCI subcohort). UTI diagnoses comprised over 20% of all hospitalizations one-year post-index. Annually, neurogenic bladder patients averaged 16 office and 0.5 emergency room visits. CONCLUSIONS: This is the largest observational study conducted to address the epidemiology of the neurogenic bladder population, including healthcare utilization. These data suggest that patients with neurogenic bladder may have suboptimal management, indicated by high incidences of urinary tract complications and hospitalizations.

Savings needed to fund health insurance and health care expenses in retirement: findings from a simulation model.

MODELING RETIREE HEALTH COSTS: This Issue Brief examines the uncertainty of health care expenses in retirement by using a Monte Carlo simulation model to estimate the amount of savings needed to cover health insurance premiums and out-of-pocket health care expenses. This type of simulation is able to account for the uncertainty related to individual mortality and rates of return, and computes the present value of the savings needed to cover health insurance premiums and out-of-pocket expenses in retirement. These observations were used to determine asset targets for having adequate savings to cover retiree health costs 50, 75, and 90 percent of the time. NOT ENOUGH SAVINGS: Many individuals will need more money than the amounts reported in this Issue Brief because this analysis does not factor in the savings needed to cover long-term care expenses, nor does it take into account the fact that many individuals retire prior to becoming eligible for Medicare. However, some workers will need to save less than what is reported if they keep working in retirement and receive health benefits as active workers. WHO HAS RETIREE HEALTH BENEFITS BEYOND MEDICARE?: About 12 percent of private-sector employers report offering any Medicare supplemental health insurance. This increases to about 40 percent among large employers. Overall, nearly 22 percent of retirees age 65 and older had retiree health benefits in 2005 to supplement Medicare coverage. As recently as 2006, 53 percent of retirees age 65 and older were covered by Medicare Part D, 24 percent had outpatient prescription drug coverage through an employment-based plan. Only 10 percent had no prescription drug coverage. INDIVIDUALLY PURCHASED MEDICARE SUPPLEMENTS, 2008: Among those who purchase Medigap and Medicare Part D prescription drug coverage at age 65 in 2008, men would need between $79,000 and $159,000 with median prescription drug expenses (50th percentile and 90th percentiles, respectively), and between $156,000 and $331,000 with prescription spending that is at the 90th percentile. Women would need between $108,000 and $184,000 with median prescription drug expenses (50th and 90th percentiles, respectively), and between $217,000 and $390,000 with prescription spending that is at the 90th percentile. The savings needed for couples would range from $194,000 at the 50th percentile to $635,000 at the 90th percentile. EMPLOYMENT-BASED BENEFITS, 2008: Among those who have employment-based retiree health benefits to supplement Medicare, but who must pay their own premiums, men would need between $102,000 and $196,000 in current savings (50th and 90th percentiles, respectively) to cover health care costs in retirement. Women would need between $137,000 and $224,000, respectively, due to their greater longevity. The savings needed for couples would range from $154,000 to $376,000. INDIVIDUALLY PURCHASED MEDICARE SUPPLEMENTS, 2018: Among those who purchase Medigap and Medicare Part D prescription drug coverage at age 65 in 2018 (currently age 55), men would need between $132,000 and $266,000 with median prescription drug expenses (50th and 90th percentiles, respectively), and between $261,000 and $555,000 with prescription spending that is at the 90th percentile. Women would need between $181,000 and S308,000 with median prescription drug expenses (50th and 90th percentiles), and between S364,000 and $654,000 with prescription spending that is at the 90th percentile. The savings needed for couples would range from $325,000 at the 50th percentile to S1,064,000 at the 90th percentile. RETIREE HEALTH MAY BE DRIVING LONGER TIME IN THE WORK FORCE: The declining availability of retiree health benefits may partly explain the rising labor force participation rate among individuals ages 55-64. Between 1996 and 2006, the labor force participation rate increased from 67 percent to 69.6 percent for men and from 49.6 percent to 58.2 percent for women.

In-gap discounts in Medicare Part D and specialty drug use.

OBJECTIVES: Specialty drugs can bring significant benefits to patients, but they can be expensive. Medicare Part D plans charge relatively high cost-sharing costs for specialty drugs. A provision in the Affordable Care Act reduced cost sharing in the Part D coverage gap phase in an attempt to mitigate the financial burden of beneficiaries with high drug spending. We examined the early impact of the Part D in-gap discount on specialty cancer drug use and patients' out-of-pocket (OOP) spending. STUDY DESIGN: Natural experimental design. METHODS: We compared changes in outcomes before and after the in-gap discount among beneficiaries with and without low-income subsidies (LIS). Beneficiaries with LIS, who were not affected by the in-gap discount, made up the control group. We studied a random sample of elderly standalone prescription drug plan enrollees with relatively uncommon cancers (eg, leukemia, skin, pancreas, kidney, sarcomas, and non-Hodgkin lymphoma) between 2009 and 2013. We constructed 4 outcome variables annually: 1) use of any specialty cancer drug, 2) the number of specialty cancer drug fills, 3) total specialty drug spending, and 4) OOP spending for specialty cancer drugs. RESULTS: The in-gap discount did not influence specialty cancer drug use, but reduced annual OOP spending for specialty cancer drugs among users without LIS by $1108. CONCLUSIONS: In-gap discounts in Part D decreased patients' financial burden to some extent, but resulted in no change in specialty drug use. As demand for specialty drugs increases, it will be important to ensure patients' access to needed drugs, while simultaneously reducing their financial burden.

Disparities Among Those With Advance Directives in a Medicare Supplement Population.

Advance directives (ADs) detail patients' end-of-life (EOL) care preferences. We estimated AD prevalence rates among a Medicare Supplement population and determined characteristics associated with having ADs. We also estimated the impact of having an AD on EOL Medicare expenditures among respondents who later died. Survey respondents with an AD (72%) were significantly more likely to be female, older, nonminority, higher income and education, and have more comorbid conditions. Following regression adjustments, EOL expenditures were significantly lower for those with ADs in the last 3 months (-US$11 189) and 1 month (-US$6092) prior to death. Patients with ADs specifying their wishes for EOL care had significantly lower medical expenditures during the last few months of life. However, disparities exist among those with ADs that may warrant interventions.

Big Data, Little Data, and Care Coordination for Medicare Beneficiaries with Medigap Coverage.

Most healthcare data warehouses include big data such as health plan, medical, and pharmacy claims information for many thousands and sometimes millions of insured individuals. This makes it possible to identify those with multiple chronic conditions who may benefit from participation in care coordination programs meant to improve their health. The objective of this article is to describe how large databases, including individual and claims data, and other, smaller types of data from surveys and personal interviews, are used to support a care coordination program. The program described in this study was implemented for adults who are generally 65 years of age or older and have an AARP(®) Medicare Supplement Insurance Plan (i.e., a Medigap plan) insured by UnitedHealthcare Insurance Company (or, for New York residents, UnitedHealthcare Insurance Company of New York). Individual and claims data were used first to calculate risk scores that were then utilized to identify the majority of individuals who were qualified for program participation. For efficient use of time and resources, propensity to succeed modeling was used to prioritize referrals based upon their predicted probabilities of (1) engaging in the care coordination program, (2) saving money once engaged, and (3) receiving higher quality of care. To date, program evaluations have reported positive returns on investment and improved quality of healthcare among program participants. In conclusion, the use of data sources big and small can help guide program operations and determine if care coordination programs are working to help older adults live healthier lives.

Who are the uninsured elderly in the United States?

Because of the Medicare program, a common assumption is made that virtually all older Americans have health insurance coverage. Data from the 2000 National Health Interview Survey were analyzed to estimate the number of people aged 65 and older without health insurance; their stated reasons for being uninsured; and the associations between lack of insurance and sociodemographic variables, health status, and access to and use of healthcare services. In 2000, there were approximately 350,000 older Americans with no health insurance. Those without insurance were more likely to be younger, Hispanic, nonwhite, unmarried (widowed, divorced, or never married), poor, and foreign-born. They were less likely to hold U.S. citizenship. Despite relatively high rates of chronic medical conditions, they were unlikely to receive outpatient or home healthcare services. The most common reason given for lack of insurance was its cost. This study reveals important gaps in the availability of health insurance for the elderly, gaps that are likely to affect an increasing number of older Americans in the coming decade.

Trends in Medicare supplemental insurance and prescription drug coverage, 1996-1999.

Medicare Current Beneficiary Survey (MCBS) Access to Care data indicate a five-percentage-point decline in the share of Medicare beneficiaries having Medigap coverage between 1996 and 1999; this was matched by a commensurate rise in the share enrolled in Medicare HMOs, contributing to an increase in the percentage with drug coverage. During this period, high-income beneficiaries, and to a lesser extent healthier and rural beneficiaries, experienced greater net declines in supplemental coverage and smaller relative gains in drug coverage, compared with others. By fall 1999, 38 percent of beneficiaries lacked drug coverage, based on point-in-time estimates. This is much higher than previous estimates that measured beneficiaries' drug coverage at any time during the calendar year. Many of Medicare's most vulnerable beneficiaries--rural (50 percent), near-poor (44 percent), and oldest old (45 percent)--were most likely to lack drug coverage in the fall of 1999.

Health insurance and the elderly.

The effectiveness of proposed changes to the Medicare program depends on consumers' responses to different market incentives, which vary according to the coverage the elderly possess to supplement their Medicare coverage. This Data Watch explores the extent of supplemental insurance among the elderly, based on a new data set from the Medicare Current Beneficiary Survey. Only 11 percent of Medicare beneficiaries have only Medicare as their source of coverage; the rest of the elderly population is covered by either private coverage (employer-sponsored retiree coverage or individually purchased coverage) or Medicaid. An increase in Medicare cost sharing would likely affect one-third of elderly beneficiaries, which calls into question the effectiveness of this approach to Medicare program reform.

Prescription drugs and the elderly: issues and options.

This paper examines the elderly's need for prescription drug insurance, the extent and depth of current coverage supplementary to Medicare, the characteristics of those who have coverage and those who do not, and the problem of adverse selection in individual insurance for prescription drugs. It also discusses the issues that must be resolved in choosing the direction public policy should take if more of the elderly are to be covered and examines the advantages and disadvantages of four illustrative public policy options, ranging from small expansions of Medicaid benefits through "Medigap" regulation to Medicare coverage for all elderly.

Medicare HMO withdrawals: what happens to beneficiaries?

More than 400,000 Medicare beneficiaries had to seek other insurance arrangements when their health maintenance organization (HMO) withdrew from Medicare at the end of 1998. According to a new survey of 1,830 involuntarily disenrolled Medicare beneficiaries, two-thirds subsequently enrolled in another Medicare HMO; one-third experienced a decline in benefits, and 39 percent reported higher monthly premiums. One in seven lost prescription drug coverage; about one in five had to switch to a new primary care doctor or specialist. Those with traditional Medicare by itself or with Medigap, the disabled under age sixty-five, the oldest old, and the near-poor experienced the greatest hardship after their HMO withdrew.

Adverse selection, moral hazard, and wealth effects in the Medigap insurance market.

Using data from a longitudinal study of the recently retired we attempt to separate the moral hazard effect of Medicare supplementary (Medigap) insurance on health care expenditures from the adverse selection effect of poor health on Medigap coverage. We find evidence of adverse selection, but its magnitude is unlikely to create serious efficiency problems. Taking adverse selection into account reduces the estimate of the moral hazard effect. In addition, we find a strong positive wealth effect on the demand for supplementary insurance.

Adverse selection and the purchase of Medigap insurance by the elderly.

This study uses data on 8561 elderly respondents from the 1991 Medicare Current Beneficiary Survey to examine adverse selection in the supplemental private insurance market. Logit models of supplemental insurance choices provided modest but mixed evidence of self-selection on the basis of observable health status. Wealth had a strong influence on coverage. Two part models of Medicare utilization and expenditures showed that beneficiaries with individually purchased policies had higher total, part B and physician expenditures than those with employer-provided policies, even after controlling for observable differences, suggesting adverse selection. Results were similar for basic and more comprehensive policies.

The interaction of partial public insurance programs and residual private insurance markets: evidence from the US Medicare program.

A ubiquitous form of government intervention in insurance markets is to provide compulsory, but partial, public insurance coverage and to allow voluntary purchases of supplementary private insurance. This paper investigates the effects of such programs on insurance coverage for the risks not covered by the public program, using the example of the US Medicare program. I find that Medicare does not have substantial effects-in either direction-on coverage in residual private insurance markets. In particular, there is no evidence that Medicare is associated with reductions in private insurance coverage for prescription drug expenditures, an expenditure risk not covered by Medicare. Medicare is, however, associated with a shift in the source of prescription drug coverage, from employer-provided coverage to Medicare HMOs.

Supplemental insurance: Medicare's accidental stepchild.

The majority of Medicare beneficiaries supplement the basic Medicare benefit package with additional insurance. This article reviews the literature on Medicare supplemental insurance. Supplemental insurance plays a significant role in protecting Medicare beneficiaries from financial risk. The two major sources of coverage for beneficiaries--former employers and individual purchase--differ in benefit structure and characteristics of policy holders. Employer-sponsored policies tend to provide broader coverage with more cost sharing than individually purchased policies, and holders of employer policies tend to be younger, wealthier, healthier, and better educated. Supplemental insurance policies have been shown to be associated with higher Medicare expenditures, but there is no consensus on the cause of the higher expenditures. Some studies attribute the increase to adverse selection of policies; other studies point to the moral hazard effect of insurance.

VHA enrollees' health care coverage and use of care.

The authors examined health care coverage for Veterans' Health Administration (VHA) enrollees and how their reliance on VHA care varies by coverage, using the largest and most detailed survey of veterans using VHA services ever conducted. The results showed that a majority of veterans who use VHA services have alternative health care coverage and that most of them use both VHA and non-VHA health care. The findings have important implications for quality of care and coordination of care.

Medicare spending by beneficiaries with various types of supplemental insurance.

The authors analyzed Medicare spending by elderly noninstitutionalized Medicare beneficiaries with and without supplemental insurance such as Medigap, employer-sponsored plans, and Medicaid. Use of a detailed survey of Medicare beneficiaries and their Medicare health insurance claims enabled the authors to control for health status, chronic conditions, functional limitations, and other factors that explain spending variations across supplemental insurance categories. The authors found that supplemental insurance was associated with a higher probability and level of Medicare spending, particularly for Part B services. Beneficiaries with both Medigap and employer plans had the highest levels of spending ceteris paribus, suggesting a possible moral hazard effect of insurance. Findings from this study are discussed in the context of the overall financing of health care for the elderly.

The effect of the illness episode approach on Medicare beneficiaries' health insurance decisions.

This article reports on a quasi-experimental test of the Illness Episode Approach (IEA), a new approach to providing Medicare beneficiaries with information about the financial consequences of alternative health care coverage decisions. Beneficiaries were randomly assigned to free, three-hour workshops, half using materials developed through application of the IEA, half using traditional comparative information on insurance options. Analysis of data collected before and after the workshops indicates that participants in the Illness Episode sessions were more likely to drop duplicative coverage, to spend less on premiums, and to report that their decisions to change coverage had met their expectations. The entire sample of workshop participants showed significant increases in knowledge of Medicare and their own insurance, as well as improved satisfaction with the cost of their health care coverage.

Who switches from Medigap to Medicare HMOs?

OBJECTIVE: To determine the factors affecting whether Medigap owners switch to Medicare managed care plans. DATA SOURCES: The primary data were the 1993-1996 Medicare Current Beneficiary Survey (MCBS) Cost and Use Files. These were supplemented by data available from the Centers for Medicare & Medicaid Services (CMS) website. STUDY DESIGN: Individuals on the MCBS files with Medigap coverage in the period 1993-1996 were included in the study. The person-year was the unit of analysis. We used multivariate logistic regression analysis to determine whether or not a Medigap owner switched to a Medicare-managed care plan during a particular year. Independent variables included measures of affordability, need for services, health insurance benefits, sociodemographics, and supply of managed care plans. PRINCIPAL FINDINGS: We did not detect strong evidence that beneficiaries in poorer health were more likely than others to switch from Medigap coverage to Medicare-managed care. In addition, higher Medigap premiums did not appear to induce beneficiaries to switch into managed care. CONCLUSIONS: We examined selection bias in joining managed care plans among the subset of Medicare beneficiaries who have Medigap policies. No strong evidence of selection bias was found in this population. We conclude that there was no evidence that the Medigap market is becoming prohibitively expensive as a result of unfavorable selection.