Medicare Subvention Demonstration:

Enrollment in DOD Pilot Reflects Retiree Experiences and Local Markets

HEHS-00-35: Published: Jan 31, 2000. Publicly Released: Jan 31, 2000.

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William J. Scanlon
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Pursuant to a legislative requirement, GAO provided information on enrollment in the Department of Defense's (DOD) pilot Medicare health maintenance organization (HMO) for military retirees, focusing on: (1) how successful the demonstration has been in enrolling eligible beneficiaries; (2) what influenced retirees to join DOD's pilot HMOs; and (3) what factors accounted for differences in enrollment rates across demonstration sites.

GAO noted that: (1) in the first year of DOD's Medicare subvention demonstration, over one-fifth of Medicare-eligible military retirees in the demonstration areas enrolled in Senior Prime, DOD's HMO pilot for seniors, although enrollment rates differed markedly across the six demonstration sites; (2) two sites reached their enrollment targets and started putting applicants on a waiting list; consequently, the number of enrollees understates interest in the program at these two sites; (3) the demonstration allows retirees who turn age 65 after the demonstration's start to age-in--enroll in Senior Prime regardless of the site's enrollment limit--if they were enrolled until turning 65 in DOD's managed care plan for younger DOD beneficiaries; (4) slightly more retirees are aging-in than DOD had expected; (5) disenrollment rates are running at almost 5 percent per year demonstrationwide, relatively low compared with many other Medicare managed care organizations; (6) a retiree's recent use of the military health care system was a strong predictor of enrollment in Senior Prime--the greater the reliance on military health care in the previous year, the greater the likelihood of enrolling; (7) several related factors also influenced retirees' decisions: (a) satisfaction with previous health care; (b) knowledge of Senior Prime; and (c) convenience; (8) any potential expansion of DOD subvention would probably also tend to attract retirees with these characteristics, although they are a minority of all military retirees; (9) differences in site enrollment rates partly reflected the sites' different histories of serving retirees; (10) sites that had provided high levels of care to many older retirees had an advantage, since users who depended on military health care were more likely to choose Senior Prime; and (11) features of the local market and the site helped to shape individual enrollment decisions.

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