Medicare Managed Care:

Information Standards Would Help Beneficiaries Make More Informed Health Plan Choices

T-HEHS-98-162: Published: May 6, 1998. Publicly Released: May 6, 1998.

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Pursuant to a congressional request, GAO discussed the extent to which the Health Care Financing Administration's (HCFA) Medicare Choice information development efforts are likely to: (1) enable beneficiaries to readily compare benefits and out-of-pocket costs using plan brochures; and (2) facilitate the agency's approval of plans' marketing materials and other administrative work required of both HCFA and the health plans.

GAO noted that: (1) HCFA has begun making certain plan-specific information available to beneficiaries; (2) these efforts, however, do not address the problem beneficiaries face in trying to carefully evaluate their health plan choices using the plans' summaries of benefits and other marketing materials; (3) these materials are a major source of health plan information; (4) currently, plans use widely varied formats and definitions of benefits in the materials they distribute to beneficiaries; (5) this lack of common formatting and language made it difficult, if not impossible, for beneficiaries to rely on health maintenance organizations' (HMOs) marketing literature to compare benefits and premiums; (6) preliminary results from GAO's current work on HMOs' prescription drug benefit suggest this situation continues to exist; (7) GAO's current work also suggests that critical information is sometimes missing from plans' marketing materials; (8) the diverse formats and terms also cause problems for health plans and HCFA staff; (9) without HCFA's specifying common standards for plans' marketing materials, agency staff have wide discretion when deciding to approve or reject these documents; (10) plan representatives and HCFA staff stated that this latitude leads to inconsistent HCFA decisions, unnecessary delays, and extra costs; (11) the lack of required standards similarly affects the efficient development of comparative benefits information; (12) to help beneficiaries evaluate their health plan options, HCFA could move faster to publish readily available plan performance indicators such as plans' disenrollment rates; (13) with this information, beneficiaries could then decide to seek more information about a plan before enrolling; (14) HCFA could better serve beneficiaries, reduce burdens on health plans, and leverage its own resources by setting information standards for health plans' marketing literature; (15) GAO believes, therefore, that HCFA should adopt the recommendations it made in 1996 and require plans to use standard formats and terminology in their benefit descriptions; and (16) in addition, HCFA should use plan performance data it already collects to help inform beneficiaries' health plan decisions.

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