Medicare Managed Care Growth

Pursuant to a congressional request, GAO reviewed the growth of Medicare beneficiaries in managed health care plans. GAO noted that: (1) although more than 50 percent of employees covered by employer-provided insurance are enrolled in managed health care plans, fewer Medicare beneficiaries are enrolled in such plans; (2) the only managed care option Medicare offers is health maintenance organizations (HMO) and they are not uniformly available; (3) the percentage of Medicare beneficiaries enrolled in HMO has increased from about 3 percent in 1987 to about 7 percent in 1995; (4) although Medicare beneficiaries are increasingly choosing HMO, about 87 percent of these beneficiaries live in 10 states, while about 55 percent live in just 2 states; and (5) only 3 states have Medicare HMO enrollment of 20 percent or more, while 7 states have non-Medicare HMO enrollments of 30 percent or more.