Comparing Rural and Urban Medicare Advantage Beneficiary Characteristics.

Purpose: The Medicare Advantage (MA) program allows Medicare beneficiaries to receive benefits from private plans rather than from traditional fee-for-service (FFS) Medicare. Little is known about the rural and urban differences in the populations that enroll in the MA program, and these differences may be important for setting policy. This brief uses data from the 2012-13 Medicare Current Beneficiary Survey (MCBS) to describe these differences, and combined with county-level data on MA issuer participation, this dataset also allows us to assess the degree to which issuers may engage in selective MA market entry on the basis of demographic characteristics. Key Findings: (1) Rural and urban MA and FFS populations did not differ much on average by any characteristics reported in the data, including age, self-reported health status, cancer diagnosis, smoking status, Medicaid status, or by other variables assessing frailty and presence of chronic conditions. (2) Most measures of access were similar across rural and urban respondents. However, in terms of cost, urban enrollees were less likely to pay an additional premium (beyond Medicare Part A and B) to obtain MA coverage: 42 percent reported doing so in urban places, while 54 percent did so in rural places. (3) While rurality on its own was often a significant predictor of lower issuer participation in a county's MA market, the addition of other demographic characteristics did not influence the prediction. In other words, we found no evidence, based upon MCBS data, that issuers exclude rural counties due to other demographics.

Health Insurance Marketplaces: Issuer Participation and Premium Trends in Rural Places, 2018.

Purpose: Since 2014, when the Health Insurance Marketplaces (HIMs) authorized by the Patient Protection and Affordable Care Act (PPACA) were implemented, considerable premium changes have been observed in the marketplaces across the 50 states and the District of Columbia. This policy brief assesses the changes in average HIM plan premiums from 2014 to 2018, before accounting for subsidies, with an emphasis on the widening variation across rural and urban places, providing information during Congressional debates on the future of the program. Key Findings: (1) Insurance issuers reduced HIM participation across both rural and urban places (with 1.7 and 2.2 issuers, respectively), both in states that expanded Medicaid under the PPACA and in non-expansion states. (2) The average adjusted premium (before premium subsidy) continues to rise across all of the above categories, and the gap has widened between the 32 Medicaid expansion and 19 non-expansion states. Average premiums in rural counties are higher than average premiums in urban counties in both expansion and non-expansion states (by $43 per month and $27 per month, respectively). (3) Prior trends of lower premium changes at greater population densities are no longer observed in the 2018 data. (4) In 2018, 1,581 counties (52 perent) have one participating insurance issuer. Nationwide, 42 percent of all urban counties and 55 percent of all rural counties only have one issuer.

2016 Rural Enrollment in Health Insurance Marketplaces, by State.

Purpose. In this brief, cumulative county-level enrollment in Health Insurance Marketplaces (HIMs) through March 2016 is presented for state HIMs operated as Federally Facilitated Marketplaces (FFMs) and for those operated as Federally Supported State-Based Marketplaces (FS-SBMs). Enrollment rates in metropolitan and non-metropolitan areas of each state, defined as the percentage of "potential market" participants selecting plans, are presented. Monitoring annual enrollment rates provides a gauge of how well state outreach and enrollment efforts are proceeding and helps identify states with strong non-metropolitan enrollment as models for other states to emulate. Key Findings. (1) Cumulative enrollment in the HIMs in non-metropolitan counties has grown to about 1.4 million in 2016, representing 40 percent of the potential market in non-metropolitan counties. (2) Estimated enrollment rates varied considerably across the United States. In particular, estimated enrollment rates in non-metropolitan areas were substantially higher than in metropolitan areas in Hawaii, Illinois, Michigan, Montana, Maine, Nebraska, Wisconsin, and Wyoming. (3) The states that achieved the highest absolute non-metropolitan enrollment totals were Michigan, Georgia, Missouri, North Carolina, Texas, and Wisconsin. Of these, Michigan, North Carolina, and Wisconsin also had non-metropolitan enrollment rates above 50 percent. (4) About half of all states, evenly distributed by Medicaid expansion status but mostly concentrated in the Midwestern census region, had higher enrollment growth in non-metropolitan areas from 2015 to 2016, and in fact aggregated non-metropolitan growth was greater than metropolitan growth in both expansion categories.

Rural Medicare Advantage Market Dynamics and Quality: Historical Context and Current Implications.

Purpose. In this policy brief, we assess variation in Medicare's star quality ratings of Medicare Advantage (MA) plans that are available to rural beneficiaries. Evidence from the recent Centers for Medicare & Medicaid Services (CMS) quality demonstration suggests that market dynamics, i.e., firms entering and exiting the MA marketplace, play a role in quality improvement. Therefore, we also discuss how market dynamics may impact the smaller and less wealthy populations that are characteristic of rural places. Key Data Findings. (1) Highly rated MA plans serving rural Medicare beneficiaries are more likely to be health maintenance organizations (HMOs) and local preferred provider organizations (PPOs), as opposed to regional PPOs. HMOs and local PPOs may be better able to improve their quality scores strategically in response to the bonus payment incentive due to existing internal monitoring mechanisms. (2) On average, the rural enrollment rate is lower in plans with higher quality scores (59 percent) than the corresponding urban rate (71 percent). This differential is likely due, in part, to lack of availability of highly rated plans in rural areas: 17.8 percent of rural counties lacked access to a plan with four or more (out of five) stars, while just 3.7 percent of urban counties lacked such access. (3) MA plans with high quality scores have been operating longer, on average, and have a lower percentage of rural counties within their contract service areas than plans with lower quality scores.

Health Insurance Marketplaces: Premium Trends in Rural Areas.

Since 2014, when the Health Insurance Marketplaces (HIMs) authorized by the Patient Protection and Affordable Care Act (ACA) were implemented, considerable premium changes have been observed in the marketplaces across the 50 states and the District of Columbia. This policy brief assesses the changes in average HIM plan premiums from 2014 to 2016, before accounting for subsidies, with an emphasis on the widening variation across rural and urban places. Since this brief focuses on premiums without accounting for subsidies, this is not intended to be an analysis of the "affordability" of ACA premiums, as that would require assessment of premiums, cost-sharing adjustments, and other factors.

2014: Rural Medicare Advantage Enrollment Update.

Key Data Findings. (1) Reclassification of rural and urban county designations (due to the switch from 2000 census data to 2010 census data) resulted in a 10 percent decline in the number of Medicare eligible Americans living in rural counties in 2014 (from roughly 10.7 million to 9.6 million). These changes also resulted in a decline in the number of MA enrollees considered to be living in a rural area, from 2.19 million to 1.95 million. However, the percentage of Medicare beneficiaries enrolled in MA and prepaid plans in rural areas declined only slightly from 20.6 percent to 20.3 percent. (2) Rural Medicare Advantage (MA) and other prepaid plan enrollment in March 2014 was nearly 1.95 million, or 20.3 percent of all rural Medicare beneficiaries, an increase of more than 216,000 from March 2013. Enrollment increased to 1.99 million (20.4 percent) in October 2014. (3) In March 2014, 56 percent of rural MA enrollees were enrolled in Preferred Provider Organization (PPO) plans, 29 percent were enrolled in Health Maintenance Organization (HMO) or Point-of-Service (POS) plans, 7 percent were enrolled in Private Fee-for-Service (PFFS) plans, and 8 percent were enrolled in other prepaid plans, including Cost plans and Program of All-Inclusive Care for the Elderly (PACE) plans. (4) States with the highest percentage of rural Medicare beneficiaries enrolled in MA and other prepaid plans include Minnesota (49.1 percent), Hawaii (41.1 percent), Pennsylvania (35.4 percent), Wisconsin (34.3 percent), New York (30.4 percent), and Ohio (30.1 percent).

Health Insurance Marketplaces: Early Findings on Changes in Plan Availability and Premiums in Rural Places, 2014-2015.

The Patient Protection and Affordable Care Act established Health Insurance Marketplaces (HIMs) in all 50 states and the District of Columbia. This policy brief assesses the changes in HIMs from 2014 to 2015 in terms of choices offered and premiums charged, with emphasis on how these measures vary across rural and urban places. Key Findings. (1) In 74 percent of HIM rating areas, the number of firms operating increased by at least one, while the number of firms decreased in only about 6 percent of rating areas. Further, 64 percent of rating areas with fewer than 50 persons per square mile gained at least one firm. (2) There was no consistent pattern of premium increases with respect to rating area population density (used as a proxy here for the degree of "ruralness" of the rating areas). Nationally, rural areas are not experiencing higher premium increases than their urban counterparts. In fact, the lowest increases in second-lowest cost silver plan premiums occurred in the medium-density population rating areas of 51 to 300 persons per square mile. (3) Average adjusted premiums increased from 2014 to 2015 by 6.7 percent in Federally-Facilitated Marketplaces (FFMs) compared to just 1.4 percent in State-Based Marketplaces (SBMs). Regardless of SBM or FFM status, premium increases across the United States were negatively correlated with the number of firms entering the market. (4) Analysis of the most rural states, in terms of percentage of the population classified as nonmetropolitan, shows that, in general, premiums fell significantly in rural places where they had been rather high, and they increased in rural places where they had been rather low. The five rural states with the lowest premium increases had an average of 0.17 firms entering the market, while the five with the highest premium increases had an average of 0.50 firms exiting the market.

Rural Enrollment in Health Insurance Marketplaces.

Our previous analysis of 2015 Health Insurance Marketplace (HIM) data on plan availability and premiums in comparison to 2014 showed only modest premium increases in many rural areas and increased firm participation in most areas. To determine whether HIM enrollment also shows a positive trend, we analyzed county-level HIM enrollment data for 2015 by geographic categories, population density, premium, and firm participation, comparing enrollment outcomes in rural places to those in urban places. Key Findings. (1) In the Northeast, Midwest, and West census regions, estimated enrollment rates in rural (micropolitan and noncore) counties were similar to estimated rates in urban counties, while in the South, rural rates lagged behind urban rates. (2) Estimated enrollment rates at the rating area level increased as the population density of the rating area increased. (3) Various measures of rurality and geography indicate that HIMs performed well in many rural areas; however, this analysis suggests that in some rural areas, enrollment outcomes may have been weak due to factors such as the geographic scope of the rating areas, plan availability in these rating areas, or potentially fewer resources devoted to outreach and enrollment efforts. (4) In general, county-level, enrollment-weighted average premiums differed more by census region than by metropolitan, micropolitan, and noncore status. (5) Low enrollment rates at the rating area level were associated with a lower numbers of firms participating in HIMs. When three or more firms participated, enrollment rates were close to or above average.

Rural Enrollment in Health Insurance Marketplaces, by State.

Since passage of the Patient Protection and Affordable Care Act (ACA), much attention has been focused on the functioning of Health Insurance Marketplaces (HIMs). In this brief, cumulative county-level enrollment in HIMs through March 2015 is presented for state HIMs operated as Federally Facilitated Marketplaces (FFMs) and Federally Supported State-Based Marketplaces (FS-SBMs). We provide comparisons between enrollment in urban and rural areas of each state and corresponding percentages of "potential market" participants enrolled. Given differences in populations eligible for HIM enrollment, we analyzed Medicaid expansion states separately. This analysis provides a gauge of how well outreach and enrollment efforts are proceeding in the states. Key Findings. (1) Overall, people living in metropolitan areas were more likely to enroll in HIMs than were people in non-metropolitan areas, as 38.9 percent of potentially eligible metropolitan residents in Medicaid expansion states and 47.5 percent in non-expansion states were enrolled in HIMs, compared to 33.9 percent and 37.3 percent in nonmetropolitan areas, respectively. (2) Estimated enrollment rates varied considerably across the United States. In particular, estimated enrollment rates in non-metropolitan areas are higher than in metropolitan areas in Illinois, Maine, Michigan, Montana, Nebraska, Nevada, New Hampshire, North Dakota, Wisconsin, and Wyoming. (3) The states with the highest rural enrollment percentages were Maine, Michigan, Montana, North Carolina, New Hampshire, South Carolina, and Wisconsin. States with high absolute rural enrollment were about as likely to be Medicaid expansion states to be as non-expansion states, and they were slightly less likely to belong to the South census region.

Rural Medicare Advantage Plan Payment in 2015.

Payment to Medicare Advantage (MA) plans was fundamentally altered in the Patient Protection and Affordable Care Act of 2010 (ACA). MA plans now operate under a new formula for county-level payment area benchmarks, and in 2012 began receiving quality-based bonus payments. The Medicare Advantage Quality Bonus Payment Demonstration expanded the bonus payments to most MA plans through 2014; however, with the end of the demonstration bonus payments has been reduced for intermediate quality MA plans. This brief examines the impact that these changes in MA baseline payment are having on MA plans and beneficiaries in rural and urban areas. Key Data Findings. (1) Payments to plans in rural areas were 3.9 percent smaller under ACA payment policies in 2015 than they would have been in the absence of the ACA. For plans in urban areas, the payments were 8.8 percent smaller than they would have been. These figures were determined using hypothetical pre-ACA and actual ACA-mandated benchmarks for 2015. (2) MA plans in rural areas received an average annual bonus payment of $326.77 per enrollee in 2014, but only $63.76 per enrollee in 2015, with the conclusion of the demonstration. (3) In 2014, 92 percent of rural MA beneficiaries were in a plan that received quality-based bonus payments under the demonstration, while in March 2015, 56 percent of rural MA beneficiaries were in a plan that was eligible for quality-based bonus payments.

2012 rural Medicare Advantage quality ratings and bonus payments.

Key Data Findings. (1) The average rural Medicare Advantage (MA) plan enrollee in 2012 experienced a quality rating of 3.60 stars (of a potential 5.0), compared with a rating of 3.71 stars experienced by urban enrollees. (2) The measured rural-urban difference in the MA plan quality is a result of the difference in the composition of the enrollment and plan availability in MA markets, rather than differences between MA plans of the same type. (a) In general, rural Medicare beneficiaries often have limited MA plans available from which to choose, and typically have lower quality ratings than urban MA plans. (b) Rural MA beneficiaries are more likely to be enrolled in preferred provider organization (PPO) plans than in health maintenance organization (HMO) plans. (c) PPO plans have lower quality ratings on average than HMO plans. (d) HMO plans had the highest average quality rating at 3.83 and 3.78 stars, respectively, in rural and urban areas. PPO plans had lower quality ratings, at 3.52 and 3.50, respectively. (3) In rural areas, 32% of the MA population is enrolled in a plan with a star rating of 4.0 or higher, and 92% are enrolled in a plan with a star rating of at least 3.0, as contrasted to urban enrollment of 36% and 94% respectively, making these plans eligible for quality based bonus payments. (4) The quality rating of rural MA plans varies significantly across the country, with the highest quality ratings in rural areas in Minnesota, Iowa, Wisconsin, Oregon, Pennsylvania, and Maine.

The uninsured: an analysis by age, income, and geography.

Key Findings. (1) Assuming Medicaid expansion in each of the fifty states and the District of Columbia, a larger proportion of the rural (non-metropolitan) uninsured (43.5%) than the urban uninsured (38.5%) would be eligible for Medicaid. (2) In both urban and rural places, across the adult non-elderly population, uninsured rates decline dramatically with age. (3) Within each age group of the uninsured, rural people are less likely to have incomes above 400% of the federal poverty level (FPL), meaning that overall more rural uninsured would be eligible for some form of health insurance assistance under the Patient Protection and Affordable Care Act (ACA), either subsidized coverage in new marketplaces, or through Medicaid if all states were to implement expansion. (4) While over half of the uninsured in both rural and urban areas are younger than 40 years, the uninsured in rural areas are disproportionately older across all income categories, which reflects the age distribution in the population.

A guide to understanding the variation in premiums in rural health insurance marketplaces.

Key Findings. (1) State-level decisions in implementing the Patient Protection and Affordable Care Act of 2010 (ACA) have led to significant state variation in the design of Health Insurance Marketplace (HIM) rating areas. In some designs, rural counties are grouped together, while in others, rural and urban counties have been deliberately mixed. (2) Urban counties have, on average, approximately one more firm participating in the marketplaces, representing about 11 more plan offerings, than rural counties have. (3) The highest-valued "platinum" plan types are less likely to be available in rural areas. Thus, the overall mix of plan types should be factored into the reporting of average premiums. (4) Levels of competition are likely to have a greater impact on the decisions of firms considering whether to operate in higher-cost areas or not, as those firms must determine how they can pass such costs on to consumers, conditional on the market share they are likely to control.

Geographic variation in premiums in health insurance marketplaces.

This policy brief analyzes the 2014 premiums associated with qualified health plans (QHPs) made available through new health insurance marketplaces (HIMs), an implementation of the Patient Protection and Affordable Care Act (ACA) of 2010. We report differences in premiums by insurance rating areas while controlling for other important factors such as the actuarial value of the plan (metal level), cost-of-living differences, and state-level decisions over type of rating area. While market equilibrium, based on experience and understanding of the characteristics of the new market, should not be expected this soon, preliminary results give policymakers key issues to monitor.

A hospital system's wellness program linked to health plan enrollment cut hospitalizations but not overall costs.

Many policy makers believe that health status would be improved and health care spending reduced if people managed their health better. This study examined the effectiveness of a program put in place by BJC HealthCare, a hospital system based in St. Louis, Missouri, that tied employees' eligibility to participate in the system's most generous health plan with participation in a wellness program. The intervention, which began in 2005, was associated with a 41 percent decrease, relative to a comparison group, in hospitalizations for conditions targeted by the wellness program but with no significant decrease in other hospitalizations. We found reductions in inpatient costs but similar increases in non-inpatient costs. Therefore, we conclude that although the program did cut some hospitalizations, it did not save money for the employer in the short term. This finding underscores that wellness program incentives under the Affordable Care Act are unlikely to greatly reduce health care spending over the short run.

June 2012: rural MA enrollment and premium update.

Key Data Findings. (1) Rural Medicare Advantage (MA) enrollment grew to over 1.7 million in June 2012 (17% of eligible beneficiaries), while total MA enrollment grew to nearly 13.4 million (27% of eligible beneficiaries). (2) Rural preferred provider organization (PPO) and health maintenance organization (HMO) enrollment grew to over 840 thousand (48% of the market) and 532 thousand (31% of the market), respectively, while private fee-for-service (PFFS) enrollment fell to 230 thousand in rural areas (13% of the market). (3) Rural MA enrollment varies across the country with concentrations of enrollment on the West Coast, the Great Lakes, and the Northeast regions of the United States. (4) The average monthly weighted premium for rural MA plans with prescription drugs fell in 2012 to $48 from $52 in 2011, but it remains significantly higher than the urban average which also fell during the same time from $38 to $34. (5) Zero premium plans are available to 73% of rural MA beneficiaries and to 95% of urban beneficiaries; however, only 48% of rural beneficiaries that have this option choose these plans compared to 63% of urban beneficiaries. The resulting average non-zero premium was $72 in rural areas in 2012, while the average non-zero premium in urban areas was $81. (6) Roughly a third (35%) of rural MA beneficiaries receive their MA coverage including prescription drugs without having to pay a premium, however this is significantly lower than 60% of urban beneficiaries that do not have to pay a premium.

The uninsured: an analysis by income and geography.

Key Findings. (1) A larger proportion of the rural population than the urban population is uninsured and low income (living at or below 138% of the federal poverty line [FPL]) (9.9% as compared to 8.5%) and a larger proportion of the rural population than the urban population will be eligible for subsidized Health Insurance Marketplace (HIM) coverage due to income levels and current lack of insurance (10.7% as compared to 9.6%). (2) Assuming full Medicaid expansion, a larger proportion of the rural uninsured than the urban uninsured would be eligible for Medicaid (43.5% as compared to 38.5%). (3) A smaller proportion of the rural uninsured than the urban uninsured has income above 400% FPL and thus will not qualify for either Medicaid or HIM subsidies (10% as compared to 14.1%). (4) The proportion of the uninsured population potentially eligible for Medicaid expansion is highest in the rural South (47.5%) and lowest in the urban Northeast (32.5%) and the rural Northeast (35.8%).

March 2013: Medicare Advantage update.

Key Data Findings. (1) From March 2012 to March 2013, rural enrollment in Medicare Advantage (MA) and other prepaid plans increased by over 200,000 enrollees, to more than 1.9 million. (2) Preferred provider organization (PPO) plan enrollment increased to nearly one million enrollees, accounting for more than 51% of the rural MA market (up from 48% in March 2012). (3) Health maintenance organization (HMO) enrollment continued to grow in 2013, with over 31% of the rural MA market, while private fee-for-service (PFFS) plan enrollment decreased to less than 10% of market share. (4) Despite recent changes to MA payment, rural MA enrollment continues to increase.

Federal employees health program experiences lack of competition in some areas, raising cost concerns for exchange plans.

The Affordable Care Act calls for creation of health insurance exchanges designed to provide private health insurance plan choices. The Federal Employees Health Benefits Program is a national model that to some extent resembles the planned exchanges. Both offer plans at the state level but are also overseen by the federal government. We examined the availability of plans and enrollment levels in the Federal Employees Health Benefits Program throughout the United States in 2010. We found that although plans were widely available, enrollment was concentrated in plans owned by just a few organizations, typically Blue Cross/Blue Shield plans. Enrollment was more concentrated in rural areas, which may reflect historical patterns of enrollment or lack of provider networks. Average biweekly premiums for an individual were lowest ($58.48) in counties where competition was extremely high, rising to $65.13 where competition was extremely low. To make certain that coverage sold through exchanges is affordable, policy makers may need to pay attention to areas where there is little plan competition and take steps through risk-adjustment policies or other measures to narrow differences in premiums and out-of-pocket expenses for consumers.