Murgolo, M.S.: Comparison of Medicare Risk HMO
and FFS Enrollees.
Because we differentiated HMOs into group/staff and independent practice association (IPA) model type, the 1.5 percent of HMO Medicare beneficiaries who could not be matched to a specific Medicare risk HMO
were dropped (Gabel 1997).
In 1997 alone, Medicare risk HMO
enrollment has growth by approximately 100,000 per month.
Approximately 5 percent of individuals in the 1993 sample were enrolled in a Medicare risk HMO
for the entire year, while 95 percent were in FFS settings for the entire year (Table 4).
By 1999 there were over 6 million Medicare risk HMO
members--a nearly 500-percent increase from 1991--comprising 17 percent of the Medicare population.
Less than 10 percent of the disabled are in a Medicare risk HMO
and only 5 percent have a medigap plan.
Between December 1994 and December 1998, Medicare risk HMO
enrollment nearly tripled, rising to 6.1 million beneficiaries, or over 15 percent of the Medicare population.
Prescription Drug Spending for Medicare Beneficiaries: 1995 Total Payments Percent Source of Payment in Thousands Distribution Total $22,020,930 100.0 Out-of-Pocket 11,106,552 50.4 Covered Persons 5,573,660 25.3 Non-Covered persons 5,532,892 25.1 Third-Party Payments 10,914,379 49.6 Medicare Risk HMO
775,166 3.5 Medicaid 2,365,024 10.7 Employer-Sponsored(1) 5,494,552 25.0 Individually Purchased 681,014 3.1 All Other(2) 1,598,622 7.3
In any event, the apparent importance of geographic location as a determinant of a Medicare risk HMO
's financial success or failure suggests a need to re-evaluate some more fundamental issues about the proper policy goals of Medicare capitation.
Still, recognizing the overall importance of such services holding the potential to provide front-end savings on medical costs could drive up interest in so-called Medicare risk HMOs
. These organizations contract with the Federal government to provide a comprehensive array of health care services for fixed premiums based on Medicare's average per capita health costs in a given region.
Retirees can instead be covered within existing Medicare Risk HMOs
. Because of lower premiums and lower rates of premium increase, the accumulated FAS 106 liability for retiree care can be as much as 50 percent lower than the liability based on indemnity health benefits.
Using MCBS data from the 2000 Access to Care File, differences in the composition of the population enrolled in Medicare risk HMOs
and of those in the same geographic areas who remained in fee-for-service (FFS) were examined.