Medicare:

Millions in End-Stage Renal Disease Expenditures Shifted to Employer Health Plans

HRD-93-31: Published: Dec 31, 1992. Publicly Released: Dec 31, 1992.

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Pursuant to a legislative requirement, GAO reviewed the effects of extending the coverage time for which employer-provided group health plans would be expected to pay medical expense claims of beneficiaries with end-stage renal disease (ESRD), focusing on: (1) the number and geographic distribution of such beneficiaries; (2) annual Medicare savings; (3) the effect of the extension on 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.

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