A Report from Families USA
December 1997
Comparing Medicare HMOs: Do They Keep Their Members?
Contents
EXECUTIVE SUMMARY
INTRODUCTION
The Importance of Medicare Disenrollment Data
THIS REPORT
METHODOLOGY
FINDINGS
THE CAUSES OF HIGH DISENROLLMENT AND RAPID DISENROLLMENT RATES
Market Conditions
Plan Characteristics
Inappropriate and Misleading Marketing
Poor Quality of Care and Failure to Provide Medicare-Covered Benefits
Inadequate Oversight of Medicare HMOs
DISCUSSION AND CONCLUSION
ENDNOTES
APPENDIX: TABLES AND FIGURES:
Table 1. Medicare HMO Disenrollment, Rapid Disenrollment, and Disenrollment
Destination by State - 1996
Fig.1. Medicare HMO Disenrollment: State by State Comparison - 1996
Table 2. Medicare Disenrollment Data by Plan - 1996
Table 3. Ten Plans with Highest Medicare HMO Disenrollment Rates - 1996
Table 4. Ten Plans with Lowest Medicare HMO Disenrollment Rates - 1996
Fig. 2. Ten Plans with Lowest Medicare Disenrollment Rates and Ten Plans With Highest Medicare Disenrollment Rates - 1996
Table 5. Plans with Disenrollment Rates of over 20 Percent and Rapid
Disenrollment Rates of over 40 Percent - 1996
Table 6. Florida Medicare HMOs with Disenrollment Rates over 20 Percent
Table 7. Texas Medicare HMOs with Disenrollment Rates over 20 Percent
Table 8. Comparison of Humana-South Florida's Medicare Disenrollment
Rate with Other Large Medicare HMOs
TECHNICAL APPENDIX: METHODOLOGY
Health maintenance organizations (HMOs) are an increasingly important part of the Medicare program. Since Medicare began contracting with HMOs, the program has produced little usable consumer information that would allow Medicare beneficiaries to compare the quality of care provided by HMOs. This report analyzes one critical piece of informationthe rates at which Medicare beneficiaries leave, or voluntarily "disenroll"* from, individual HMOs.
NOTE: In this report, "voluntary disenrollments" do not include Medicare benficiaries who disenrolled from an HMO because of death or loss of Medicare eligibility; however, because HCFA does not separate them out in the data, those who disenroll due to a move out of the area are included among "voluntary disenrollments."
Information on Medicare disenrollment is critically important for two reasons. First, it gives Medicare beneficiaries an indication of how satisfied other beneficiaries are with a particular plan. It tells them the number of Medicare HMO enrollees who "vote with their feet," leaving particular plans. Second, the Health Care Financing Administration (HCFA) can use disenrollment data to monitor Medicare HMOs. Very high disenrollment rates, especially when coupled with large numbers of disenrollments occurring within three months of enrollment, should set off alarms that increased plan oversight is needed.
THIS REPORT
Comparing Medicare HMOs provides a state-by-state and national picture of Medicare HMO disenrollment rates. In conjunction with this report, Families USA is issuing a series of state and regional reports providing the public and individual Medicare beneficiaries with a comparison of HMO disenrollment rates in their state and region.
We analyzed four types of disenrollment information:
1. Voluntary Disenrollment: This refers to Medicare beneficiaries who voluntarily disenroll from a Medicare HMO during the year. High rates of voluntary disenrollment may be caused by market conditions, marketing problems, or quality-of-care issues.
2. Rapid Disenrollment: Rapid disenrollment refers to Medicare beneficiaries who voluntarily leave a plan within three months of enrollment. When combined with high disenrollment rates, high rates of rapid disenrollments usually indicate marketing problems.
3. Disenrollment Destination: This measure provides information on where Medicare beneficiaries who disenroll from an HMO go: back to traditional fee-for-service Medicare or to another Medicare HMO. Disenrollment destination is, to some extent, a measure of market conditions. The more Medicare HMOs there are in a community, the higher the percentage of Medicare beneficiaries leaving one HMO and joining another.
4. The Impact of High Disenrollment Rates on Plan Market Share: We examined the impact of high disenrollment rates in plans' growth rates and market shares to assess whether high disenrollment rates hurt plans' ability to market to Medicare beneficiaries.
The analysis in this report is based on two data sources: (1) HCFA's Monthly Disenrollment Patterns Reports, and (2) HCFA's Disenrollment Rates Reports. We analyzed disenrollment data in these reports for all of 1995, all of 1996, and the first four months of 1997. This analysis excludes Medicare HMOs that had an average membership during 1996 of fewer than 1,000 or that did not operate as a Medicare HMO for the entire year. All told, the study includes 158 plans in 31 states and the District of Columbia in 1996. A full discussion of the methodology can be found in the Appendix.
Disenrollment rates should be used with caution. A number of factors, including the size of plans, their experience in marketing to Medicare enrollees, and market conditions can account for high disenrollment rates. However, at a minimum, high disenrollment rates indicate that a plan may be having problems with either marketing or quality.
FINDINGS
Disenrollment rates vary dramatically by state and some states have very high disenrollment rates (Table 1). In 1996, Medicare HMO disenrollments as a percent of average monthly membership ranged from a low of 2.7 percent in Hawaii and 4.2 percent in Minnesota to a high of 31.6 percent in the District of Columbia, 25.3 percent in Florida, 21.8 percent in Kentucky, and 19.4 percent in Texas. This compares to a national rate of 13.0 percent (Table 1 and Figure 1). The high disenrollment rates in both Florida and Texas are the result of high disenrollment rates in a large number of HMOs.
The 10 plans with the highest disenrollment rates averaged a 53.6 percent disenrollment rate compared to an average 3.6 percent disenrollment rate for the 10 plans with the lowest disenrollment rates (Tables 3 and 4 and Figure 2). In 1996, six of the 10 Medicare HMOs with the highest disenrollment rates were in Florida, three were in Texas, and one was in California.
Low disenrollment rates are related to how long plans have been contracting with Medicare and the size of their Medicare membership. There are some notable exceptions to this finding. Of the 51 HMOs that began marketing to Medicare enrollees before 1990, nine (almost 18 percent) had disenrollment rates of over 20 percent in 1996 (Table 2).
Low disenrollment rates are related to nonprofit status of plans. Seven of the ten plans with the highest disenrollment rates were for-profit, while nine of the 10 plans with the lowest disenrollment rates were nonprofit (Tables 3 and 4).
More than one in four Medicare beneficiaries who disenrolled during 1996 left their plans within three months of joining (Table 2). On average, 28.0 percent of Medicare beneficiaries who voluntarily disenrolled from an HMO in 1996 did so before enrollment became final or within the first three months of enrollment.
Nationally in 1996, 17 plans had disenrollment rates over 20 percent and rapid disenrollment rates of over 40 percent (Table 5).
In communities with a large choice of HMOs, Medicare beneficiaries who disenroll from one HMO tend to join another HMO instead of going back to fee-for-service Medicare. In southern California and southern Florida, two-thirds of Medicare beneficiaries who disenrolled joined another Medicare HMO plan (65.1 percent and 68.8 percent, respectively).
States and plans with the highest disenrollment rates in 1996 also had the highest disenrollment rates in 1995. Among states with more than two Medicare HMOs in 1995 and 1996, Florida and Texas had the highest disenrollment rates. Of the 10 plans with the highest disenrollment rates in 1996, nine were marketed in 1995. Of these, five also made the list of the 10 plans with highest disenrollment in 1995 and three others made the list of the 20 plans with the highest disenrollment.
The percentage of voluntary disenrollments increased from 1995 to 1996 and again in the first four months of 1997.
High disenrollment rates do not always reduce the profitability of Medicare HMOs. During 1996, in both Florida and Texas, plans continued to stay in business, and in some cases grew, despite disenrollment rates of over 20 percent (Tables 6 and 7).
DISCUSSION AND CONCLUSION
The findings presented in this report represent both good and bad news for the Medicare population. The good news is that millions of Medicare beneficiaries are happy with their HMOs, as indicated by very low disenrollment rates in many plans. Also, beneficiaries who disenroll often join another HMO, evidence of the continuing attraction of Medicare HMOs to the Medicare population.
The bad news is that too many plans continue to operate a revolving door--enrolling and disenrolling large numbers of beneficiaries. Our report also indicates that disenrollment rates are going up, not down. Finally, although HCFA is becoming more aggressive in monitoring HMOs, the persistence of high disenrollment rates in some markets, especially Florida and Texas, indicates that improved oversight is needed.
HCFA will soon be releasing a range of information to help Medicare beneficiaries compare HMOs. Even with the release of comparison data, the future holds significant uncertainty about the nation's ability to protect Medicare beneficiaries in HMOs and other managed care plans. The Balanced Budget Act of 1997 dramatically expands the choices available to Medicare beneficiaries and, by the year 2002, limits their disenrollment rights. The sheer number of choices, the variety of plan benefits and cost-sharing alternatives, and our limited understanding of how best to educate Medicare beneficiaries about their choices mean that we need to do a better job of oversight and education in the future than we have done in the past.
As we look to the future, federal policymakers need to allocate adequate funding and staff to ensure that Medicare beneficiaries have the information they need to make an informed choice of their health care plan. They must also use information, including disenrollment data, to monitor plans so that Medicare beneficiaries receive the benefits promised them and that "choice" does not mean "chaos."
Health maintenance organizations (HMOs) are an increasingly important part of the Medicare program. In 1982, Congress authorized HMOs to enroll Medicare beneficiaries on a risk basis.
NOTE: Most HMOs serving the Medicare population provide Medicare-covered benefits for a flat monthly fee per Medicare enrollee. This flat payment method is known as "capitation." HMOs paid this way are said to be "at risk": they are at financial risk if the cost of providing Medicare services exceeds the capitated rate. This study looks only at disenrollments for plans with a Medicare risk contract.
In the 15 years since, the Medicare program has produced little usable consumer information that would allow Medicare beneficiaries to compare the quality of care provided by different HMOs. Although Medicare has begun a number of initiatives to provide HMO quality-of-care information, a crucial piece of information that should be providedthe rates at which beneficiaries disenrolled from individual Medicare HMOsremains unavailable to Medicare beneficiaries. This report analyzes Medicare HMO voluntary disenrollment rates from across the country.
NOTE: In this report, "voluntary disenrollments" do not include Medicare benficiaries who disenrolled from an HMO because of death or loss of Medicare eligibility; however, because HCFA does not separate them out in the data, those who disenroll due to a move out of the area are included among "voluntary disenrollments."
The Health Care Financing Administration provided the disenrollment data upon which this analysis is based.
The Importance of Medicare Disenrollment Data
Information on the rates of Medicare disenrollment is critically important for two reasons. First, it gives Medicare beneficiaries information on how satisfied other beneficiaries are with a particular plan. It tells them the number of Medicare HMO enrollees who "vote with their feet," leaving particular plans. A very high disenrollment rate can provide Medicare beneficiaries with a warning that the particular Medicare HMO had trouble providing high-quality care or that the plan's marketing agents were not providing beneficiaries with accurate information about the plan and how it works.
Second, HCFA can use disenrollment data to monitor Medicare HMOs. High disenrollment rates, especially when coupled with high rapid disenrollment rates, should set off alarms that increased plan oversight is needed. Although all HMOs will experience some disenrollment, with the exception of new plans disenrollment rates should be roughly comparable for all HMOs in a given area if enrollees are equally satisfied with the plans.1 Plans just beginning to market to Medicare beneficiaries will likely have high disenrollment rates because they are small, they are just learning how to market to this population, and enrollees will have lesser loyalties to such plans.
Unlike much of the quality-of-care information HCFA is currently collecting and tabulating, disenrollment data have been available since the program first contracted with HMOs. As early as 1992, a Los Angeles-based consumer advocacy group, the Medicare Advocacy Project (now called the Center for Health Care Rights), obtained Medicare disenrollment data through a Freedom of Information Act request and made this information available to California Medicare beneficiaries.2 HCFA Region IX has been producing disenrollment information since 1995. In 1996, the U.S. General Accounting Office (GAO) analyzed disenrollment data for Medicare HMOs in two cities--Los Angeles and Miami--and published it in an easy-to-read format. The GAO recommended that the Secretary of Health and Human Services direct HCFA to "annually analyze, compare, and distribute widely HMOs'. . . voluntary disenrollment rates."3
In the next few years, disenrollment data will be even more crucial. The Balanced Budget Act of 1997 created a new Part C of Medicare, authorizing the program to contract with a range of plans, referred to as Medicare+Choice: (1) a coordinated care planan HMO with or without a point-of-service (POS) option, a Preferred Provider Organization (PPO), or a Provider Sponsored Organization (PSO); (2) a private fee-for-service plan; and (3) a medical savings account (MSA) combined with a Medicare+Choice MSA. Through 2001, Medicare enrollees will be able to disenroll from choices (1) or (2) and return to fee-for-service Medicare or join another plan at any time during the year. In 2002, they will be restricted to a six-month enrollment/disenrollment period and, beginning in 2003, a three-month enrollment/disenrollment period. Beginning in 2003, beneficiaries may make only one change a yearduring the first three months of enrollmentjoining another plan or reenrolling in fee-for-service Medicare.
Although Medicare beneficiaries are beginning to understand how HMOs operateespecially in some parts of the country, like California, where most of the working population and over 30 percent of the Medicare population obtain care through HMOsthey will face a bewildering choice of new types of insurance and managed care plans. High disenrollment rates from an insurance or managed care plan can serve as an "early warning" sign that plan marketing is misleading or inaccurate, that services offered to enrollees are inadequate or of poor quality, or that beneficiaries misunderstood their choices. Disenrollment information should be readily available to Medicare beneficiaries to help them select the Medicare insurance product most suitable to their needs.
The Importance of Disenrollment Data
According to the General Accounting Office:
"[A Medicare] HMO's disenrollment rate compared with other HMOs in the same market area . . . can indicate beneficiary satisfaction with care, service, and out-of-pocket costs. High disenrollment rates may result from poor education of enrollees during an HMO's marketing and enrollment process. . . . High disenrollment rates may also result from beneficiaries' dissatisfaction with access or quality of care. . . . While statistics alone cannot distinguish among these causes, a relatively high disenrollment rate should caution beneficiaries to investigate further before enrolling."
Source: GAO, Medicare: HCFA Should Release Data to Aid Consumers, Prompt Better HMO Performance, October 1996, GAO/HEHS-97-23.
Comparing Medicare HMOs provides a state-by-state and national picture of Medicare HMO disenrollment rates. Along with this report, Families USA is issuing a series of state and regional reports providing the public and individual Medicare beneficiaries with a comparison of HMO disenrollment rates in their state and region.
We analyzed four types of disenrollment information for 1995, 1996 and the first four months of 1997:
1. Voluntary Disenrollment: Voluntary disenrollment includes Medicare beneficiaries who leave an HMO during the year for reasons other than death or loss of Medicare eligibility. It also includes those who sign an application but cancel before enrollment becomes final. The voluntary disenrollment rate is the percentage of a plan's average yearly membership who voluntarily leave the plan during the year. High rates of voluntary disenrollment may be caused by market conditions, marketing problems, or quality-of-care issues.
2. Rapid Disenrollment: Rapid disenrollment includes Medicare beneficiaries who (1) sign an application but cancel before enrollment becomes final, or (2) voluntarily leave a plan within 3 months of enrollment. In this analysis, the rapid disenrollment rate is the percentage of a plan's voluntary disenrollees who disenroll within three months of joining. A high rapid disenrollment rate is often an indication that newly-enrolled beneficiaries did not understand the implications of enrollment or that marketing agents provided inadequate or false information about enrollment or about the plan.4 High rapid disenrollment rates in a plan that has low overall disenrollments should not be viewed as a problem.
3. Disenrollment Destination: This measure provides information on where Medicare beneficiaries who disenroll from an HMO go: back to traditional fee-for-service Medicare or to another Medicare HMO. High reenrollments in other HMOs may reflect significant market competition among HMOs for enrollees, the inability of Medicare beneficiaries to pay for traditional Medicare fee-for-service and/or a Medigap policy, or the desire of beneficiaries to change to the same plan as their provider. High reenrollments to fee-for-service Medicare may indicate dissatisfaction with HMOs or the lack of choice of plans.
4. Impact of High Disenrollment Rates on Plan Market Share: We examined the HMOs with the highest disenrollment rates in two states--Florida and Texas--to assess the impact of high disenrollments on a plan's ability to attract new members and remain competitive. Specifically, we assessed the percentage of the Medicare HMO market in the state that a plan had at the beginning of 1996 and at the end of 1996.
Based on these data sources, this report provides the following analyses:
a state-by-state comparison of voluntary disenrollment rates in 1996;
a state-by-state comparison of the percentage of voluntary disenrollments that were "rapid" in 1996;
a state-by-state analysis of where disenrollees went (back to fee-for-service Medicare or another Medicare HMO) when they disenrolled from an HMO in 1996;
a comparison of the 10 HMOs with the lowest disenrollment rates and the 10 HMOs with the highest disenrollment rates in 1996 and the defining characteristics of each group of HMOs;
an analysis of the relationship between the size of HMOs' Medicare enrollment and their disenrollment rates;
an analysis of the relationship between the year HMOs began enrolling Medicare beneficiaries and their disenrollment rates;
an analysis of the relationship of 1996 disenrollment figures to those of 1995 and the first four months of 1997; and
an analysis of the impact of high disenrollments on HMO market share in Florida and Texas.
The analyses in this report are based on two data sources: (1) HCFA's Monthly Disenrollment Patterns Reports, and (2) HCFA's Disenrollment Rates Reports. We analyzed disenrollment data in these reports for all of 1995, all of 1996, and the first four months of 1997.
Because of the high disenrollment rates in new plans and the inability to compare the disenrollment rates for new Medicare plans that start up during a year, we excluded from the study Medicare HMOs that (1) had average Medicare memberships during the study year of less than 1,000, or (2) did not operate as a Medicare HMO for the entire year.
All told, the study includes 158 plans in 31 states and the District of Columbia in 1996. A full discussion of the methodology can be found in the Appendix.
How To Assess Disenrollment Data
Disenrollment data should be used with caution. A number of factors, including those listed below, could account for high rates. However, at a minimum, high disenrollment rates indicate that a plan may be having problems with either marketing or quality.
Caveats
Even a small number of disenrollees will result in a high disenrollment rate in plans with few members. This study excludes plans with an average membership of fewer than 1,000 Medicare enrollees during a year. However, disenrollment rates for plans with memberships between 1,000 and 5,000 should be viewed with caution.
New plans first marketing to Medicare beneficiaries may have high disenrollment rates because their marketing agents are just learning about the plan, how Medicare HMOs differ from Medicare fee-for-service, and how to market to the Medicare population. Because they may not understand these issues, new marketing agents may inadvertently mislead or misinform prospective enrollees. Additionally, new plans have not achieved the same type of consumer loyalty that older plans have, which may also tend to increase their disenrollment rates.
Market conditions may result in high disenrollment rates. For example, Medicare enrollees may disenroll from one plan in high numbers if a second plan with a better prescription drug benefit begins marketing in the same community.
High rapid disenrollments in plans with low overall disenrollments should not be viewed as a problem since the actual number of new members who disenroll is very small.
Problem Indicators
A plan has a high disenrollment rate for more than one year.
A plan's disenrollment rate is significantly higher than that of other plans in the community.
A plan has a high disenrollment rate and a high rapid disenrollment rate.
FINDINGS
Disenrollment Rates Vary Dramatically by State and Some States Have Very High Disenrollment Rates.
The national average Medicare HMO disenrollment rate was 13.0 percent in 1996 (Table 1 and Figure 1).
In 1996, Medicare HMO disenrollments as a percent of average monthly membership ranged from a low of 2.7 percent in Hawaii and 4.2 percent in Minnesota to a high of 31.6 percent in the District of Columbia, 25.3 percent in Florida, 21.8 percent in Kentucky, and 19.4 percent in Texas (Table 1 and Figure 1).
The high disenrollment rates in both Florida and Texas are the result of high disenrollment rates in a large number of HMOs (Table 2).
Comparing California and Florida--both states that have a long history of Medicare HMOs and substantial Medicare HMO competition--Florida has more than double the disenrollment rate of California (25.3 percent compared to 10.6 percent) (Table 1 and Figure 1).
Disenrollment Rates Vary Dramatically by Plans: Some Plans Have Very Low and Some Plans Have Very High Disenrollment Rates.
- The 10 plans with the highest disenrollment rates had a 53.6 percent average disenrollment rate compared to an average 3.6 percent disenrollment rate for the 10 plans with the lowest disenrollment rates (Tables 3 and 4 and Figure 2).
Six of the 10 Medicare HMOs with the highest disenrollment rates in 1996 are in Florida, three are in Texas, and one is in California (Table 3).
Of the 10 plans with the lowest disenrollment rates, two are in California, two are in Massachusetts, two are in Minnesota, and one each is in Hawaii, Michigan, New York, and Ohio (Table 4).
Low Disenrollment Rates Are Related to How Long Plans Have Been Contracting with Medicare and the Size of Their Medicare Membership.
Our analysis shows that small Medicare enrollments are negatively related to disenrollment rates; that is, generally, the smaller the Medicare membership in a plan, the higher the disenrollment rate (see the Methodology section in the Appendix).
Our analysis shows that the date when HMOs first begin enrolling Medicare beneficiaries is significantly related to disenrollment rates; generally, the longer a plan has been marketing to Medicare beneficiaries, the lower the disenrollment rate (see the methodology section in the Appendix).
HMOs with the lowest disenrollment rates were more likely to have large Medicare memberships and have been in the Medicare market longer compared to plans with the highest disenrollment rates (Tables 3 and 4).
The 10 plans with the lowest disenrollment rates had an average Medicare membership of 45,408 compared with an average Medicare membership of 9,016 for the ten plans with the highest disenrollment rates. Plans with the highest disenrollment rates were significantly newer to the Medicare market than plans with the lowest disenrollment rates. All but two of the ten plans with the lowest disenrollment rates in 1996 had begun marketing to Medicare beneficiaries in the 1980s; none of the high disenrollment rate plans marketed to Medicare beneficiaries before 1990 (Tables 3 and 4).
There are some notable exceptions to the general rule that the larger the Medicare HMO enrollment and the longer the plan has been marketing, the lower the disenrollment rates. For example, nine out of 51 (almost 18 percent) of the HMOs that began marketing to Medicare enrollees before 1990 had disenrollment rates of over 20 percent in 1996 (Table 2).
Low Disenrollment Rates Are Related to Nonprofit Status of Plans.
Seven of the ten plans with the highest disenrollment rates were for-profit, while nine of the 10 plans with the lowest disenrollment rates were nonprofit (Tables 3 and 4).
More than One in Four Disenrollees Left Their Plans Within Three Months of Joining.
- On average, during 1996, more than one in four Medicare beneficiaries (28.0 percent) who voluntarily disenrolled from an HMO did so before enrollment became final or within the first three months of enrollment (Table 1).
Rapid disenrollments as a percentage of all disenrollments ranged from a low of 10 percent in Minnesota and 10.4 percent in Hawaii to a high of 67.2 percent in Maryland and 65.3 percent in Wisconsin (Table 1). In Wisconsin, the high rapid disenrollment rate reflects high rapid disenrollments in the only Medicare plan in the state that met our study criteria.
In 1996, 17 plans had overall disenrollment rates over 20 percent and rapid disenrollment rates of over 40 percent or (Table 5). Three of these plans had an average membership of over 10,000 and three others have a long history of marketing to Medicare enrollees. Also, three of the 17 plans on the list were Humana HMOs. A fourth Humana HMO in San Antonio, Texas had a disenrollment rate of 27.1 percent and a rapid disenrollment rate of 39.6 percent.
NOTE: In 1997, Humana sold its Washington, D.C. HMO to Kaiser Permanente.
In Communities with a Large Choice of HMOs, Medicare Beneficiaries Who Disenroll from One HMO Tend to Join Another HMO Instead of Going Back to Fee-For-Service Medicare.
- In the 16 states with at least four Medicare HMOs, 61 percent of Medicare beneficiaries who disenrolled from an HMO in 1996 enrolled in another HMO plan (Table 1).
In the two parts of the country with the heaviest competition among HMOssouthern California and southern Floridamore than 65 percent of Medicare beneficiaries who disenrolled from one HMO during 1996 enrolled in another. In southern California (Los Angeles, Orange, San Diego, and surrounding counties), 65.1 percent of the Medicare beneficiaries disenrolling from 14 HMOs during 1996 reenrolled in another HMO. In southern Florida (Dade and surrounding counties), 68.8 percent of beneficiaries disenrolling from 10 HMOs during 1996 reenrolled in another HMO.
States and Plans with the Highest Disenrollment Rates in 1996 Also Had the Highest Disenrollment Rates in 1995.
NOTE: During the first four months of 1997, among states with more than two Medicare HMOs, Florida had the highest disenrollment rate, followed by California, Louisiana, New Mexico, and Illinois. Disenrollment data from the first four months of the year should be viewed with caution in that Medicare beneficiaries may be more likely to disenroll during this period because of changes in the benefits offered by plans.
Among states with more than two Medicare HMOs in 1995 and 1996, Florida and Texas had the highest disenrollment rates.
Of the 10 plans with the highest disenrollment rates in 1996, nine were marketed for all of 1995. Of these, five made the list of the 10 highest disenrolling plans in 1995 and three others the list of the 20 highest. Of the 10 plans with the highest disenrollment record in 1996, three made the list of the 10 highest disenrolling plans in the first four months of 1997 and four others made the list of the 20 highest.
The Percentage of Voluntary Disenrollments Increased from 1995 to 1996 and the First Four Months of 1997.
- The percentage of voluntary disenrollments in 1996 was 13.0 percent compared to 11.2 percent in 1995. In 1997, if disenrollments continue at the rate set in the first four months of the year, the yearly disenrollment rate will be 17.0 percent. Although extreme caution should be used in extrapolating data from the first four months of 1997 to the entire year, the potential trend in increasing disenrollments is troublesome.
High Disenrollment Rates Do Not Always Reduce the Profitability of Medicare HMOs.
- During 1996, in Florida and Texas, Medicare HMOs continued to stay in business, and in some cases grew, despite disenrollment rates of over 20 percent (Tables 6 and 7).
In Florida, of the 14 plans with 1996 disenrollment rates of over 20 percent, nine had a net gain in Medicare membership and five plans gained market share despite high disenrollment rates (Table 6).
In Texas, each of the five plans with 1996 disenrollment rates of over 20 percent gained members and market share over the course of the year. These plans enrolled new members at a pace faster than they lost members (Table 7). Thus, the fact that a large number of Medicare members were unhappy with their plans, as indicated by their disenrollment, did not appear to hurt the plans' financial position.
High disenrollment and rapid disenrollment rates result from a number of causes, including market conditions, plan characteristics, marketing problems, failure by plans to provide Medicare-covered benefits, and the failure by HCFA to address the underlying problems in plans with high disenrollment rates.
Market Conditions
The high HMO disenrollment rates and rapid disenrollment rates among some Medicare HMOs may result from a variety of market conditions. In some areas, the competition among Medicare HMOs for market share is intense. Thus, one HMO may increase its prescription drug benefit, resulting in a move toward that plan by Medicare beneficiaries enrolled in other plans. In other instances, high disenrollments in one plan are directly related to competition by a new plan marketing in the area. In one case that we know of, high disenrollments at the end of 1996 were the result of an HMO's announcement that it was increasing its premiums the following year. In still another case, one insurer significantly raised its premiums to encourage members to disenroll and reenroll in the insurer's other, and less generous, HMO product. Finally, we found three HMOs in 1996 with extremely high disenrollment rates resulting from their splitting in two. These plans divided their service areas in two--disenrolling members from one plan and then reenrolling them in the new plan.
NOTE: The study corrected for these high disenrollments by pretending that the plans had never split their service areas (see methodology section.)
High disenrollments can also be the result of growing pains. New Medicare HMOs, unfamiliar with Medicare marketing rules and trying to gain a foothold in the market, are unfamiliar with how to best market their plans to an aging and disabled Medicare population and are more likely to have high disenrollment rates. Moreover, if even a relatively few members disenroll from a small plan, the disenrollment rates can be very high.
Medicare beneficiaries in some parts of the country have little or no experience with HMOs. We should expect to see a higher rate of disenrollments in states where many of the plans operating are relatively new and where Medicare beneficiaries are just beginning to learn about HMOs and the difference between this health care delivery system and traditional fee-for-service Medicare. The rapid disenrollment rate would also likely be higher in these states.
Thus, some amount of disenrollment by a population that can still disenroll at any time during a year should be expected. And, in some cases, high disenrollments may, at least in part, result from the peculiarities of a particular market.
Plan Characteristics
Our study found that nonprofit HMOs, HMOs that have been in the Medicare market for longer periods of time, and HMOs with the largest enrollments are most likely to have the lowest disenrollment rates. Often, these characteristics are connected. For example, the nonprofit HMOs tend to have been in existence longer than their for-profit brethren and to have begun contracting with Medicare at an earlier date. Due to their early entrance into the market, their Medicare enrollment is likely to be large. Moreover, some nonprofits, such as Kaiser Permanente, have a long history of providing care to large employee groups as well as retirees. To the extent that new Medicare beneficiaries are familiar with a plan or a particular plan is the only one offered to them as a retirement benefit, disenrollment rates are likely to be low.
Nevertheless, it seems reasonable to infer that the plans with the lowest disenrollment rates tend to be the plans that provide the best services to Medicare enrollees. Many of the plans in our study with the lowest disenrollment rates have received very high grades in a number of recent HMO report cards. For example, in October 1997, the Pacific Business Group on Health, a coalition of 33 large California employers, awarded Kaiser Permanente Health Plan in Oakland its "blue ribbon" award as the best-rated plan, based on enrollee satisfaction, quality of care, cost, and leadership in improving HMO industry standards.5 The October 13, 1997 issue of US News & World Report provided a report card on HMOs in the country. Six of the nonprofit HMOs in our list of 10 with the lowest disenrollment rates were also listed among US News & World Report's top HMOs.6
Thus, it appears likely that the nonprofit HMOs with a long history of providing quality care are translating their success in the commercial market to the Medicare market, as indicated by their low disenrollment rates.
Inappropriate and Misleading Marketing
Marketing problems are often an underlying cause of high disenrollment rates. In some markets, competition among HMOs is intense and marketing agents are judged and paid based on how many new beneficiaries they get to join their plan. Paying plan marketing agents a commission for each enrollee is almost certain to lead to some level of marketing abuse. Although the majority of Medicare HMOs have not had major problems with their marketing activities, serious marketing fraud in the Medicare HMO program has been well documented. Marketing agents have lied about the "advantages" of Medicare HMO enrollment compared to the "disadvantages" of fee-for-service Medicare, obtained beneficiary enrollment signatures under false pretenses ("just sign here to show that I have visited"), forged signatures, and in other ways misled beneficiaries into joining their HMO.7
The fact that some plans seem to operate a revolving door--with large numbers of beneficiaries enrolling and disenrolling each month--suggests that these plans have failed to train their marketing agents adequately, failed to tie compensation of marketing agents to member retention, and failed to monitor agents' activities. A combination of high rapid disenrollments with high overall disenrollments is especially problematic. When this happens, large numbers of Medicare beneficiaries are joining plans only to discover that what was promised is not what they actually receive.
As described in the findings, in 1996, 17 plans had both disenrollment rates of over 20 percent and rapid disenrollment rates of over 40 percent (Table 5). Eight of these plans had an average enrollment of under 5,000. With a low enrollment, even a small number of members who disenroll can translate into a high disenrollment rate. Of the other eight plans, three had an average membership of over 10,000. Also, three of the 17 plans on the list were Humana HMOs. A fourth Humana HMO in San Antonio, Texas had a disenrollment rate of 27.1 percent and a rapid disenrollment rate of 39.6 percent. It may be that the training of Humana marketing agents should be assessed for all the corporation's HMOs.
Poor Quality of Care and Failure to
Provide Medicare-Covered Benefits
The inability to obtain Medicare-covered benefits may also explain high disenrollments in some plans. Nonprofit organizations across the country that help Medicare beneficiaries with their HMO problems have reported cases where an HMO failed to provide medically necessary Medicare-covered services. The degree to which these anecdotal stories represent an underlying and widespread problem with denials of medically necessary care is still to be determined. Understanding Medicare coverage guidelines and how to apply them is at best a challenge.
Nevertheless, it appears that, based both on anecdotal evidence and on some studies, Medicare beneficiaries in HMOs do not always get the full range of benefits to which they are entitled. Research indicates that Medicare beneficiaries may not obtain needed cataract surgery, home health services, and hospital rehabilitation services.8 Medicare beneficiaries who are ill are more likely to disenroll from a Medicare HMO than their healthier counterparts and more likely to assess the care they receive from the HMO as inadequate.9
The history of Medicare HMOs also points to marketing and quality-of-care problems as a reason for high disenrollment rates. Florida may be illustrative. Our study indicates that Florida Medicare HMOs continue to experience extremely high disenrollment rates. Market competition may explain some of this poor disenrollment record. However, market competition in Florida is no more intense than in California, where Medicare HMOs on average experienced much lower disenrollment rates in 1995 and 1996. The documented history of marketing and quality problems plaguing Florida Medicare HMOs is a more likely explanation for continuing high disenrollment rates.10
Studies Find that Some Medicare HMO
Enrollees Disenroll When They Need Care
One recent study appearing in the New England Journal of Medicine found that Medicare beneficiaries who disenrolled from HMOs were 180 percent more likely than a matched group of Medicare beneficiaries to use inpatient hospital services.
A study by the Physician Payment Review Commission found that Medicare beneficiaries leaving HMOs had costs 60 percent above the average.
Source: Morgan R.O., Virnig V.A., et al., "The Medicare-HMO Revolving DoorThe Healthy Go In and the Sick Go Out," N Engl J Med, 1997, 337:169-75; Physician Payment Review Commission, Access to Care in Medicare Managed Care: Results from a 1996 Survey of Enrollees and Disenrollees (Washington, D.C.), November 1996.
Inadequate Oversight of Medicare HMOs
Our study demonstrates that some plans, regardless of their experience in marketing to Medicare beneficiaries, continue to have high disenrollment rates. As discussed in the findings section above, nine of the HMOs that began marketing to Medicare enrollees before 1990 had disenrollment rates of over 20 percent in 1996.
The case of Humana in South Florida is illustrative. The plan is the largest in the state and has been enrolling Medicare beneficiaries since April 1985. Yet its disenrollment rate in 1996 continues to be much higher than that of other Medicare HMOs in the nation of similar size and experience in marketing to Medicare beneficiaries (Table 8). Humana (and its predecessor, International Medical Centers, which it took over in 1987) has a long history of problems with quality and marketing.11 The plan continues to be the focus of enrollee complaints about quality12 and marketing,13 indicating that the past problems may not have been remedied.
HCFA has had disenrollment data since it began contracting with HMOs to serve the Medicare population. Although the agency is becoming more aggressive in monitoring HMOs, the persistence of high disenrollment rates in some markets, especially Florida and Texas, indicates that, in some parts of the country, HCFA may not be using disenrollment data to effect a change in plan behavior.
NOTE: In Texas, for example, it was not HCFA but the state Attorney General who negotiated an agreement with PCA requiring the HMO to modify its enrollment practices. PCA, which has very high disenrollment and rapid disenrollment rates, was the object of numerous consumer complaints (In re Texas v. PCA Health Plans of Texas, Inc., Texas DistCt, 353 Jud Dist, No. 9712378, 11/3/97).
HCFA is divided into 10 regional offices, each of which oversees the Medicare HMOs in its region. The expertise and thoroughness with which these offices monitor HMOs and the extent to which they use disenrollment data as an oversight and enforcement tool varies. For example, since 1995, Region IX (Arizona, California, Hawaii, and Nevada) has been conducting and publishing its own analyses of disenrollment data. It is currently the only regional office to do so. If plans know the regional office is using disenrollment data to assess marketing and quality-of-care problems and that disenrollment data are available to the community, they have strong incentives to address the causes of high disenrollment rates.
The findings presented in this report represent both good and bad news for the Medicare population. The good news is that millions of Medicare beneficiaries are happy with their HMOs, as indicated by very low disenrollment rates in some HMOs. Also, beneficiaries who disenroll often reenroll in another HMO, evidence of the continuing attraction of Medicare HMOs to the Medicare population.
The bad news is that too many plans operate a revolving door. Although they attract new members, marketing and quality-of-care problems result in a large percent of their members opting to obtain care elsewhere. Our report also indicates that disenrollment rates are going up, not down. This apparent trend is likely to continue as Medicare HMOs spread to new market areas. Finally, virtually all plans are able to continue operations and even, in a high percentage of cases, to grow and expand market share, despite high disenrollment rates. In these cases, the market is not working well and does not weed out plans that perform poorly. Leaving the health care of Medicare beneficiaries to the vagaries of the market without strong federal oversight would be foolhardy.
HCFA will soon be releasing a range of information to help Medicare beneficiaries compare HMOs, including a comparison of plan benefits and costs, a survey of Medicare enrollees' satisfaction with their HMOs, and plan performance measures. HCFA also plans to release disenrollment data during 1998. The publication of this data in a consumer-friendly format will add immeasurably to Medicare beneficiaries' ability to choose among HMOs.
The release of this and the accompanying state and regional reports providing plan-specific disenrollment rates demonstrates that disenrollment data can be presented in a consumer-friendly manner. However, even with the release of disenrollment data, the future holds significant uncertainty about the nation's ability to protect Medicare beneficiaries in HMOs and other managed care plans. As discussed earlier, the Balanced Budget Act of 1997 dramatically expands the choices available to Medicare beneficiaries and, by the year 2002, limits their disenrollment rights. The sheer number of choices, the variety of plan benefits and cost-sharing alternatives, and our limited understanding of how best to educate Medicare beneficiaries about their choices—all mean that we need to do a better job of oversight and education in the future than we have done in the past.
The potential problems in the Medicare market of tomorrow are especially troublesome. As this study shows, marketing problems are more prevalent in newer and smaller plans. Under Medicare+Choices, a range of new products will be marketed. Many of these will be small. For example, PSOs may have as few as 1,500 members and 500 members in rural areas. These plans have no experience in marketing to the Medicare population and will have a small network of providers. Limited provider choice is one of the major reasons for dissatisfaction with managed care among Medicare beneficiaries.14
As we look to the future and a "brave new world" of Medicare+Choices in which disenrollment rights will be limited, federal policymakers need to allocate adequate funding and staff to ensure that Medicare beneficiaries have the information they need to make informed choices of their health care providers. They must also use this information, including disenrollment data, to monitor plans so that Medicare beneficiaries receive the benefits promised them and that "choice" does not mean "chaos."
1 U.S. General Accounting Office, Medicare: HCFA Should Release Data to Aid Consumers, Prompt Better HMO Performance, GAO/HEHS-97-23, October 1996.
2 Dallek G., Harper A., Jimenez C., and Nunez Daw C., Medicare Risk-Contract HMOs in California: A Study of Marketing, Quality, and Due Process Rights (Medicare Advocacy Project, Inc. [now the Center for Health Care Rights, Los Angeles, California], April 1993).
3 U.S. General Accounting Office, Medicare: HCFA Should Release Data to Aid Consumers, Prompt Better HMO Performance, GAO/HEHS-97-23, October 1996.
4 A 1992 study of Medicare HMO disenrollments found that 24.1 percent of beneficiaries who disenrolled within three months did not realize they had enrolled in an HMO (Porell et al., 1992, Factors Associated with Disenrollment from Medicare HMOs; Findings from a Survey of Disenrolles [Boston: Health Policy Research Consortum of Brandeis University], 1992).
5 DeBare I., "Kaiser Rated State's Top HMO by Large Employers," San Francisco Chronicle, September 18, 1997.
6 Brink S. and Shute N., "News You Can Use: America's Top HMOs," U.S. News & World Report, October 13, 1997. See also CareData News, "First Nationwide Survey of Medicare HMO Members Conducted," September 25, 1997. The survey found Harvard Pilgrim Health Care in Boston, Massachusetts to have the highest patient satisfaction scores among a group of Medicare beneficiaries receiving employer retirement benefits.
7 Office of Inspector General, Marketing Practices of South Florida HMOs Serving Medicare Beneficiaries, May 1991; Dallek G., Harper A., Jimenez C., and Nunez Daw C., Medicare Risk-Contract HMOs in California: A Study of Marketing, Quality, and Due Process Rights (Medicare Advocacy Project, Inc. [now the Center for Health Care Rights, Los Angeles, California]), April 1993; Families USA Foundation, Medicare Managed Care: Securing Beneficiary Protections (Families USA Foundation, Washington D.C.), April 1997; U.S. General Accounting Office, Medicare: HCFA Should Release Data to Aid Consumers, Prompt Better HMO Performance, GAO/HEHS-97-23, October 1996.
8 Lubick, Goldzweig, Mittman, et al., "Variations in Cataract Extraction Rates in Medicare Prepaid and Fee-for-Service Settings," JAMA, 1997, 227:1765-1768; Shaughnessy P., Schlenker R., and Hittle D., A Study of Home Health Care Quality and Cost Under Capitated and Fee-for-Service Payment Systems (Center for Health Policy Research, Denver, Colorado), 1994; and Kramer A.M., Steiner J.F., Schlenker R.E., et al., "Outcomes and Costs After Hip Fracture and Strokes: A Comparison of Rehabilitation Settings," JAMA, 1997, 277:396-404.
9 Physician Payment Review Commission, Access to Care in Medicare Managed Care: Results from a 1996 Survey of Enrollees and Disenrollees (Washington D.C.), November 1996; Morgan R.O., Virnig V.A., et al., "The Medicare-HMO Revolving DoorThe Healthy Go In and the Sick Go Out," N Engl J Med, 1997, 337:169-75; and Riley G., Tudor C., Chiang Y., and Ingber M., "Health Status of Medicare Enrollees in HMOs and Fee-for-Service in 1994," Health Care Financing Review, Summer 1996, 17:65-73.
10 U.S. General Accounting Office, Medicare: HCFA Should Release Data to Aid Consumers, Prompt Better HMO Performance, GAO/HRD-92-11, October 1996.
11 U.S. General Accounting Office, Medicare: HCFA Needs to Take Stronger Actions Against HMOs Violating Federal Standards, HRD-92-11, November 1991; U.S. Department of Health and Human Services, Office of Inspector General, Marketing Practices of South Florida HMOs Serving Medicare Beneficiaries, May 1991.
12 Palosky C., "Humana Approves Surgery," The Tampa Tribune, August 25, 1997; Palosky C., "Lawsuit Claims Humana Fraud," The Tampa Tribune, August 25, 1997.
13 An August 27, 1997 Wall Street Journal article describes how, for over a year, Humana had been offering a $700 discount on hearing aids for its members. A comparison of the costs of hearing aids in the community, however, showed that the discount was illusory. Even with the discount, Humana Medicare members paid within $100 of the average retail price on 10 of 18 models offered in the community. In some instances, Humana members didn't benefit at all from the discountfor two models offered through Humana's plan, the discounted price was roughly $100 more than the basic retail price in other stores (Terhune C., "HMO's Hearing-Aid Deal Sounds Better Than It Is," Wall Street Journal, August 27, 1997).
14 Public Sector Contracting Report, "Providers are Key to Preventing Medicare Disenrollment,"1997, 3:65-70.
DATA SOURCES
For this report we calculated two types of disenrollments: (1) voluntary disenrollments as a percentage of average yearly membership; and (2) rapid disenrollments. Rapid disenrollment rates are the percentage of Medicare HMO disenrollees who voluntarily left a plan who (a) signed an application but canceled before the effective enrollment date or (b) left within three months of enrollment. In addition, we tracked where HMO disenrollees wentwhether they went back to traditional fee-for-service Medicare or joined another Medicare HMOand assessed the impact of high disenrollment rates on plans' Medicare market share.
We obtained disenrollment data from HCFA's Monthly Disenrollment Patterns Reports and Disenrollment Rates Report for 1995, 1996, and the first four months of 1997. Because of the high disenrollment rates in new plans and the inability to compare the dissenrollment rates for new plans that start up during a year, we excluded from the study HMOs that (1) had an average Medicare membership during a study year of less than 1,000 Medicare beneficiaries, or (2) did not operate as a Medicare HMO for the entire year. Plans could be excluded in 1995 and included in 1996 or excluded in 1995 and 1996 and included in the analysis of disenrollments during the first four months of 1997.
DATA ANALYSES
Voluntary Disenrollments as a Percentage of
Average Annual Membership
We computed the average yearly membership for each plan by summing end-of-the-month membership totals from the Monthly Disenrollment Patterns Report and dividing by 12 (for 1995 and 1996) and by four (for the first third of 1997).
We then summed the number of voluntary disenrollments in each month of 1995, 1996, and the first four months of 1997 using data from the Monthly Disenrollment Patterns Report. Voluntary disenrollments are comprised of those beneficiaries who actively choose to leave or disenroll from a plan after joining, including those who have signed applications but cancelled them before the effective enrollment date. Voluntary disenrollments do not include beneficiaries who may be disenrolled from an HMO because of death or loss of Medicare eligibility.
To compute a plan's disenrollment rate, we divided the plan's total number of voluntary disenrollments by its average membership during that period, then multiplied the result by 100 to obtain a percent.
We computed national and state disenrollment rates for the study using the same methodology: We summed the number of voluntary disenrollments in each month for the nation and for each state in 1995, 1996, and the first four months of 1997, and then divided by the average membership during the year (or in 1997, the first four months of the year).
Rapid Disenrollment
The rapid disenrollment rate was calculated using data from the Monthly Patterns Disenrollment Report. The rapid disenrollment rate measures the percent of a plan's voluntary disenrollments that occur either before enrollment becomes official or within the first three months of enrollment. For each plan, we summed the number of rapid disenrollments in each month during 1995, 1996, and the first four months of 1997; we divided the figures from each year by the plan's total number of voluntary disenrollments in that year; and we multiplied by 100 to obtain a percent. We followed the same procedure to calculate the national and state rapid disenrollment rates.
Transfers to Fee-for-Service and HMO
Using figures from the Disenrollment Rates Report, we took the total number of disenrollees from each plan for the study period and subtracted the number of persons who disenrolled because of death or ineligibility or who disenrolled from a Social Security office (the data did not indicate the destination of beneficiaries who voluntarily disenrolled through Social Security offices). We then calculated the percentage of voluntary disenrollees who transferred from an HMO to traditional Medicare fee-for-service and who transferred from one Medicare HMO to another.
Market Share
Plan market share for the beginning and end of the year in Texas and Florida was calculated by summing the beginning membership for each plan in our study and dividing each plan's individual membership by the state total. We calculated market share for the end of the year using the same methodology using plans' end-of-the-year membership figures. The market share data were taken from HCFA's Disenrollment Rates Reports.
State and National Averages
We calculated state averages by summing each plan's voluntary disenrollment, rapid disenrollment, transfer, and average membership numbers and calculated average state rates for each measure using these totals. We calculated the national average by summing the same figures for all the plans nationally and then calculated average national rates for each measure using these totals. Thus, the state and national averages are weighted: plans with larger Medicare memberships influenced the national and state averages more than plans with small memberships.
CORRELATION BETWEEN THE LENGTH OF TIME HMOS HAD CONTRACTED WITH MEDICARE AND THE SIZE OF THEIR MEDICARE MEMBERSHIP WITH HMOS' DISENROLLMENT RATES
We used a Spearman Correlation to calculate the relationship between: (1) the length of time HMOs had contracted with the Medicare program and disenrollment rates, and (2) the size of plans' Medicare enrollment and disenrollment rates. The p-value for both Date and Enrollment was .008, indicating that the observed correlation was statistically significantly different from zero, or, in other words, that the observed correlation is statistically inconsistent with a zero correlation.
We concluded that the length of time a plan has contracted with Medicare is positively associated with disenrollment (the later the date of the contract, the higher the disenrollments) and enrollment is negatively associated (the smaller the number of Medicare members, the higher the disenrollment rate). A multiple regression on the rates was conducted to see if, in combination, date and enrollment would predict disenrollment better than either variable by itself. This was not the case, as each seems to provide the same information concerning disenrollment rates. The Spearman Correlations were done by Richard Kronmal, Professor of Bio-Statistics at the University of Washington School of Public Health. Tables are available from Families USA Foundation.
DATA CORRECTIONS
We looked at each plan's monthly disenrollment numbers, rapid disenrollment numbers and membership numbers to assess whether the data appeared consistent during the year. We called several HCFA regional offices to determine the cause of the data inconsistencies. We corrected data anomolies for a number of plans as follows:
H0558 Maxicare Southern California. HCFA's data indicated a voluntary disenrollment of 109 beneficiaries in December 1996, significantly higher than disenrollments during the other 11 months of the year. Region IX indicated that the correct voluntary disenrollment figure was 79 beneficiaries. We used this figure to calculate voluntary and rapid disenrollment rates because it was consistent with the disenrollment figures from previous months.
H0568 National Medical Enterprises of California. HCFA's data indicated a voluntary disenrollment of 303 beneficiaries in March of 1996. Region IX indicated that the plan had provided inaccurate information to HCFA for the month. We used the regional office's figure of 64 voluntary disenrollments to calculate voluntary and rapid disenrollment rates for the plan. This figure was consistent with other months.
H0850 US Healthcare of Delaware. This plan was erroneously listed in HCFA's data as a Pennsylvania plan. We included it as a Delaware plan.
H2931 Health Plan of Nevada. The plan split into two plans in November 1996. As a result, the data indicated a large disenrollment from this plan. To estimate the plan's voluntary disenrollment rate, we averaged the previous months' voluntary disenrollment numbers and used this average to stand in for the November and December figures. To estimate the plan's November rapid disenrollment rate, we averaged the previous months' rapid disenrollments and used this to stand in for the November figure. For December's rapid disenrollment figure, we used the rapid disenrollment figure for the new plan only. We used October's membership figure to estimate the plan's membership in November. We added the membership figures for the original and the new plan to calculate December membership.
H3749 Pacificare Oklahoma. The plan split into two plans in May 1996. We averaged the voluntary disenrollment and rapid disenrollment figures for the previous four months to approximate May disenrollment figures. For the remaining months we combined the figures from both plans to determine the voluntary disenrollment and rapid disenrollment. To calculate average end-of-the-month enrollment for May and the remaining months, we combined the enrollment figures for the original plan and the new plan. Because of these data anomalies, we excluded this plan from the disenrollment destination data.
H2153 Optimum Choice of Maryland. This Maryland plan appeared to split into two plans early in 1996. We were unable to approximate reasonable disenrollment figures using the available data and the plan was omitted from the study.
H4102 United Health of Rhode Island. The plan split into two plans in December 1996. We averaged the previous months' figures for voluntary and rapid disenrollment to approximate the December figures. We added the December membership for the original and the new plan.
H3156 Amerihealth of New Jersey. The plan is listed as not beginning enrollment until February 1996. However, the January 1996 Monthly Disenrollment Patterns Report shows that the plan had a Medicare membership of 26 at the end of January 1996. Because it actually began enrolling members in January, Amerihealth was included in the study.
CREDITS
This report was written by:
Geri Dallek, Director of Health Policy, Families USA
Lisa Swirsky, Health Policy Analyst, Families USA
The following Families USA staff contributed to the preparation of this report:
Ron Pollack, Executive Director
Peggy Denker, Director of Publications
Sharon Louis, Administrative Assistant
Vyda Stewart, Administrative Assistant
Families USA thanks the following for their contributions:
Jonathan Lo, Consultant,for data input and analysis
Richard Kronmal, Ph.D., University of Washington School of Public Health, for data analysis
Gallagher Wood Design, for design of the cover and tables and graphics
Finally, Families USA would like to thank the Health Care Financing Adminstration for providing the data on which this analysis was based
