Shopping for Managed Care: The Medicare Market

By Dallek, Geraldine | Generations, Summer 1998 | Go to article overview

Shopping for Managed Care: The Medicare Market


Dallek, Geraldine, Generations


Why so many elderly people enrolled in Medicare are joining managed care.

Managed care is now an indelible part of the Medicare program. Over the past few years, the number of HMOs contracting with Medicare has grown exponentially. From I987 to I997, the number of HMOs marketing to Medicare beneficiaries increased from 161 to 283. In 1990, only 3.3 percent of the Medicare population were in HMOs; today, about 16 percent of the population are in managed care plans rather than fee-for-service. In one year alone, between June I996 and June 1997, enrollments in Medicare HMOs grew by 29 percent (LeRoy, Hoadley, and Merrell, 1997), and by the year 2002, the Congressional Budget Office predicts that more than one quarter of the Medicare population will be enrolled in HMOs.

In many ways, this growth is surprising. Few pundits could have predicted that so many elderly Medicare beneficiaries would be willing to change their physicians and lose their guaranteed access to specialists to plunge into the untested waters of managed care. Yet, this is exactly what they are doing-in droves. Clearly, HMOs offer much that the elderly find attractive. This paper addresses the following questions: Why are so many elderly people enrolled in Medicare joining managed care? What are the risks they face in the managed care market? And what is the future Medicare marketplace likely to look like as a result of the Balanced Budget Act of 1997?

WHY OLDER PEOPLE CHOOSE MANAGED CARE

Managed care has some real advantages over traditional fee-for-service Medicare for older people, and many features long perceived as disadvantages-lack of continuity with current providers, for example-have in some cases been remedied.

Managed care, at its best, can reduce much of the harmful excesses of a fee-for-service system that encourages overuse of physicians, drugs, medical equipment, and procedures. Through coordination, managed care can ensure that medical interventions are appropriate to the problem and that the entire patient, not just the particular disease, is treated. Managed care can screen contracting physicians to ensure that they all provide quality care, adopt the latest in disease management principles and clinical guidelines, and establish internal quality assurance systems to continuously improve the care provided. At its best, managed care provides high quality care while saving money for the healthcare system.

The search for improved quality may draw some older people to join HMOs, but they join for other reasons as well. For example, they wake up one morning, open their mail, and discover that the cost of their Medigap insurance policy (which pays costs not covered by Medicare) is increasing by 20 to 30 percent. Or they go to their local pharmacy only to find that a new prescription drug will cost $50 a month.

In short, the elderly are being priced out of the Medicare fee-for-service market. They are joining HMOs because most offer prescription drug and other benefits not covered by Medicare. The prescription drug benefit is especially attractive to the Medicare population. Some 69 percent of Medicare HMOs offer a prescription drug benefit (Komisar et al., 1997). In Los Angeles, all of the HMOs marketing to the Medicare population offer an unlimited prescription drug benefit.

The elimination of the need to purchase a Medigap policy is also a strong inducement for the elderly to join a managed care plan. Depending on the type of Medigap policy purchased, the age of the purchaser, and the state and county in which the person lives, Medigap policies can cost anywhere from $400 to over $7,000 a year (Alecxih et al., 1997). And the costs of these policies continue to go up dramatically. Medigap premiums rose an average of I3 percent in 1997, following a 27 percent increase in 1996 (Hendren, 1997).

Managed care looks like, and is, a "good deal" for many elderly unable to afford the costs of fee-for-service Medicare. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Shopping for Managed Care: The Medicare Market
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.