Medicare

Recent legislation changed Medicare coverage for some beneficiaries with kidney failure, known as end-stage renal disease. For these individuals, the law extended the period of time during which employer-provided group health plans would be expected to pay medical expenses before Medicare. This report discusses the (1) number and geographical distribution of beneficiaries affected by the extension, (2) amount of annual Medicare savings achieved, and (3) effect of the extension of access to employment and employment-based health insurance.

GAO found that: (1) 8200 ESRD beneficiaries annually are eligible for extension coverage, which is about half of such beneficiaries who complete 12 months of treatment, and about 20 percent of all new ESRD beneficiaries; (2) the period of Medicare secondary payer status averaged 5.5 months; (3) most employer-provided coverage came from employers with more than 100 employees; (4) beneficiaries with employer coverage are distributed throughout the United States, but the geographic pattern of ESRD beneficiaries without employer coverage differed slightly; (5) Medicare saves about $56 million annually through employer-provided coverage, which is slightly more than 1 percent of the $4.5 billion Medicare spent on ESRD beneficiaries in 1989; (6) few beneficiaries or their spouses tried to find employment after becoming eligible for Medicare benefits, and there was some evidence of employment discrimination due to health care costs; and (7) spouses of beneficiaries experienced few problems in retaining employment or employer health coverage.