Pursuant to a congressional request, GAO provided information on the: (1) number of Medicare beneficiaries enrolling in health maintenance organizations (HMO); and (2) factors that influence beneficiaries' decisions to enroll in HMO.

GAO found that: (1) about 2.8 million Medicare beneficiaries are enrolled in risk-contract HMO and another 2 percent are enrolled in cost-reimbursement HMO; (2) the number of risk-contract HMO that offer care to Medicare beneficiaries has doubled from 93 in 1991 to 171 in August 1995; (3) many HMO sign risk contracts with Medicare in areas with well-established medical providers and high enrollee payments; and (4) Medicare beneficiaries enroll in HMO to avoid Medicare's normal deductibles and coinsurance, take advantage of HMO low monthly premiums, and continue receiving medical benefits from their former employers.