Medicare Managed Care

Medicare beneficiaries need more and better information so that they can make informed decisions when choosing a health plan. Although Medicare is the nation's largest purchaser of managed care services, it lags behind other large purchasers in providing comparative information to beneficiaries. The need for this information grows more urgent each month as tens of thousands of beneficiaries join the 4 million beneficiaries who have already opted for Medicare managed care. The Health Care Financing Administration (HCFA) is moving in the right direction by making information available, but GAO believes that HCFA could, with relatively little time and effort, do much more. Requiring that health maintenance organizations use standard terminology and formats to describe benefits, producing comparison charts and ensuring that interested beneficiaries know how to get such charts, and analyzing and publishing comparative data already available (such as disenrollment rates) would greatly enhance the ability of Medicare beneficiaries to be wise consumers of managed care.

GAO noted that: (1) HCFA does not distribute to beneficiaries comparative consumer guides such as those the federal government and many employer-based health insurance programs routinely distribute to their employees and retirees; (2) without these guides, beneficiaries cannot easily compare HMOs; (3) marketing materials distributed by HMOs are of little help because HMOs describe their benefits and costs using different terms and formats; (4) although beneficiaries lack information on HMOs, HCFA does not; (5) HCFA amasses volumes of information that could be summarized, packaged, and distributed to help beneficiaries choose among competing Medicare HMOs; (6) for example, HCFA compiles information that can be used to construct HMO benefit comparison charts; (7) HCFA also routinely collects other information, such as disenrollment rates, beneficiary complaints about HMOs, and the results of HCFA's HMO monitoring visits, that could be provided to beneficiaries; (8) because some plans do a better job of retaining Medicare beneficiaries than others, disenrollment rates, an indicator of beneficiary satisfaction, may be especially useful in helping beneficiaries distinguish among competing HMOs; (9) for example, GAO's analysis of HCFA's data showed that 1995 annual disenrollment rates ranged from 4 to 42 percent among Los Angeles HMOs and from 12 to 37 percent among Miami HMOs; (10) HCFA has initiatives, planned or under way, that will make some comparative HMO information available to beneficiaries; (11) although these initiatives are steps in the right direction, they are very small steps; and (12) with little additional time and effort, HCFA could do much more to help Medicare beneficiaries make informed selections among available HMOs.