At the Intersection of Health, Health Care and Policy Cite this article as: Karen Davis, Kristof Stremikis, Michelle M. Doty and Mark A. Zezza Medicare Beneficiaries Less Likely To Experience Cost- And Access-Related Problems Than Adults With Private Coverage Health Affairs, , no. (2012): doi: 10.1377/hlthaff.2011.1357
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Web First By Karen Davis, Kristof Stremikis, Michelle M. Doty, and Mark A. Zezza 10.1377/hlthaff.2011.1357 HEALTH AFFAIRS 31, NO. 8 (2012): – ©2012 Project HOPE— The People-to-People Health Foundation, Inc.
doi:
Medicare Beneficiaries Less Likely To Experience Cost- And Access-Related Problems Than Adults With Private Coverage The experiences of people covered by Medicare and those with private employer insurance can help inform policy debates over the federal budget deficit, Medicare’s affordability, and the expansion of private health insurance under the Affordable Care Act. This article provides evidence that people with employer-sponsored coverage were more likely than Medicare beneficiaries to forgo needed care, experience access problems due to cost, encounter medical bill problems, and be less satisfied with their coverage. Within the subset of beneficiaries who are age sixty-five or older, those enrolled in the private Medicare Advantage program were less likely than those in traditional Medicare to have premiums and out-of-pocket costs exceed 10 percent of their income. But they were also more likely than those in traditional Medicare to rate their insurance poorly and to report cost-related access problems. These results suggest that policy options to shift Medicare beneficiaries into private insurance would need to be attentive to potentially negative insurance experiences, problems obtaining needed care, and difficulties paying medical bills. ABSTRACT
T
he Affordable Care Act of 2010 introduced sweeping reforms to the health insurance market that will expand coverage options for adults under age sixty-five. The law also makes important changes to the Medicare program that are designed to reduce costs and encourage the development of new systems of health care delivery to improve health outcomes and efficiency.1 However, there is still a need to address Medicare’s remaining cost and utilization challenges posed by the retiring baby-boom generation.2,3 Policy leaders and various commissions are once again proposing different measures to reduce Medicare spending, such as shifting Medicare to a defined-contribution system.4,5 Since its inception, Medicare has been a defined-benefit plan in which the government pays for certain medical services and goods for beneficiaries
Karen Davis (
[email protected]) is president of the Commonwealth Fund, in New York City. Kristof Stremikis is a senior researcher to the president at the Commonwealth Fund. Michelle M. Doty is vice president of survey research and evaluation at the Commonwealth Fund. Mark A. Zezza is a senior program officer for health care delivery policy at the Commonwealth Fund.
until death. Under a defined-contribution system, Medicare payment for services and goods would be limited, and a larger share of the cost burden would shift to beneficiaries in the form of restructured benefits and increased costsharing requirements such as higher Medicare premiums. In discussions of the options for expanding coverage for those under age sixty-five and for ensuring meaningful coverage for those sixtyfive or older, serious consideration should be given to the experiences of people covered by public insurance programs such as Medicare and Medicaid, as well as people with private coverage through employer-based plans and the individual insurance or “nongroup” markets. Nationally representative health insurance surveys conducted in 2001 and 2007 showed that in important ways, Medicare works better for its beneficiaries than does coverage available to A u g u s t 201 2
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Web First those under age sixty-five in the employer and nongroup markets. In addition to being more satisfied with their insurance and health care in general, Medicare beneficiaries reported fewer problems with access to care and fewer instances of financial hardship as a result of medical bills, relative to their younger counterparts.6,7 This article revisits individuals’ experiences and preferences by examining a national health insurance survey conducted in 2010. In this update we compared the experience of people covered under Medicare to that of nonelderly adults covered by employer-sponsored plans and nongroup insurance. We also compared results from 2010 to those of another survey, conducted in 2001.7 As Congress continues to debate strategies to reduce the federal budget deficit, proposals to reduce Medicare spending by shifting more of the burden to beneficiaries and enrolling more beneficiaries in private plans should be carefully considered, given the experiences over the past decade of nonelderly adults who are privately insured. We also compared the perceptions of beneficiaries in traditional Medicare to those in Medicare Advantage plans. Since the 2001 survey was conducted, the proportion of beneficiaries enrolled in private Medicare Advantage plans as an alternative to traditional Medicare has increased from 15 percent to 24 percent.8 Understanding Medicare Advantage enrollees’ experiences relative to those of traditional Medicare beneficiaries can provide additional insights to inform the present debates.
Study Data And Methods Data Source The study data came from the Commonwealth Fund 2010 Health Insurance Survey, a nationally representative telephone survey of 4,005 adults, age nineteen or older, living in the continental United States. Conducted by Princeton Survey Research Associates International, the interviews took place from July 14 to November 30, 2010. The survey used an overlapping dual-frame survey of land-line phones and cell phones, recognizing that cell phone–only households now constitute nearly 30 percent of all US households, compared to less than 3 percent in 2003.9 The survey oversampled adults from telephone exchanges in geographic areas with a high density of low-income households. The final sample consisted of 2,550 interviews conducted by landline phone and 1,455 interviews conducted by cell phone, including 637 in households with no land-line phone. The survey was a twentyfive-minute telephone interview administered 2
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in English or Spanish, according to the respondent’s preference. To correct for the disproportionate sample design, we used the Census Bureau’s 2010 Annual Social and Economic Supplement to weight data by age, sex, race or ethnicity, education, household size, geographic region, population density, and telephone type. Sample In this study we restricted the analysis to a sample of 3,033 adults ages 19–64 and 940 adults age 65 and older. Thirty-two adults who did not report an age were dropped from the analysis. The land-line portion of the survey achieved a 29 percent response rate, and the cell-phone component, a 25 percent rate.10 The survey included questions about access to and experiences with health care, out-of-pocket spending for care, benefit characteristics, income, health status, insurance status, age, and other demographic characteristics. Respondents reported income, premiums, and out-of-pocket expenses in ranges, the midpoints of which were used to calculate ratios of spending to income. A small number of reported data on premium costs and out-of-pocket spending fell on the midpoint of the 5 percent or 10 percent spending thresholds.We categorized these cases as borderline. They included people in the highest income category (more than $100,000) who also reported premiums and out-of-pocket expenses at or above $10,000. These borderline cases were randomly assigned to either above or below the threshold. Approximately 25 percent of the Medicare sample and 10 percent of the nonelderly employer-sponsored insurance cohort did not report one or more of the following: income, out-of-pocket expenses, and premium costs. We categorized adults by insurance status as follows: all Medicare beneficiaries age sixty-five or older; nonelderly adults, ages nineteen to sixty-four, with employer-based or individual coverage; Medicare (disabled); or Medicaid. Results for all adults with no insurance or other insurance types are also reported. In the analyses, we assigned nonelderly adults with more than one source of coverage to one of the following insurance categories, in this order: employer, individual, Medicare, or Medicaid. We subdivided the sample of adults age sixty-five or older on Medicare into traditional Medicare, Medicare Advantage, and unknown Medicare type. Comparisons Throughout, we focused on comparisons between the experiences of Medicare beneficiaries age sixty-five or older and those of nonelderly adults insured through employer-based plans, as well as comparisons between beneficiaries age sixty-five or older with traditional Medicare and those with private Medicare Advantage plans.11 We also present re-
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sults for the individually insured, Medicare disabled, Medicaid beneficiaries, and uninsured where applicable. Given the small sample sizes for the individually insured (160), those age sixty-five or older in Medicare Advantage (188), and nonelderly Medicare disabled (208) groups, caution should be exercised in interpreting some of our results. Outcomes include people’s ratings of insurance and quality of care and their reported cost-related access problems, medical bill problems, and out-of-pocket costs.12 Key covariates in the regression analysis include poverty status, health status, and number of chronic conditions. These are analyzed as mutually exclusive categorical variables. We first compared key demographic characteristics and responses to outcomes, noting where differences between those age sixty-five or older on Medicare and the nonelderly with employer coverage were significant. We also present differences between the traditional Medicare and Medicare Advantage groups that were significant. We then used logistic regression to estimate the independent effects of insurance type, controlling for poverty and health status, and to indicate where estimates are significant at the p < 0:05, p < 0:01, or p < 0:001 levels. Odds ratios were transformed into adjusted proportions and expressed as percentages. We used the statistical software Stata, version 11.1, with the weighted survey estimator that adjusts the standard errors for clustering and the stratified sampling design. Limitations Similar to the recently expanded Census Bureau annual survey, the 2010 Commonwealth Fund survey asked adults to estimate their total out-of-pocket spending for medical care and premiums for a full year. Our analysis of medical expenses was thus limited by the extent to which adults’ estimates approximate what they actually spent. However, a recent study that compared data from the Medical Expenditure Panel Survey, which tracks health care costs and claims quarterly, to answers to questions on the Current Population Survey (the Census Bureau’s survey) indicates that respondents’ recall after one year does a reasonable job of capturing average trends.13 In addition, we were unable to calculate outof-pocket expenses as a percentage of income for approximately 25 percent of the Medicare respondents age sixty-five or older and 10 percent of the nonelderly respondents with employer-sponsored insurance because, as noted above, these respondents did not report one or more of the following: income, out-ofpocket expenses, and premium costs. This may introduce unknown bias in survey results.
The Commonwealth Fund survey does not ask Medicare respondents whether they currently have any supplemental coverage. However, respondents do list all current sources of insurance coverage, and 83 percent of adults age sixtyfive or older reported having Medicare as well as additional coverage through the individual market, an employer, or Medicaid. Given the relatively small sample size of those without supplemental coverage (n ¼ 153), we chose not to compare the experiences of those with and without such coverage. For the purposes of this study, we defined a person as probably having a patient-centered medical home if the respondent reported that he or she had a regular doctor or place of care; that it was very or somewhat easy to telephone the respondent’s doctor or place of care during regular hours; that the regular doctor or staff always or often knew the respondent’s medical history; and that the regular doctor or staff always or often helped coordinate the respondent’s care with other doctors. A positive response to all four of these indicators suggests that the respondent has an advanced relationship with a primary care clinician or facility. However, this does not necessarily mean that the respondent receives care from a formally certified patient-centered medical home provider.
Study Results Demographics The demographics of Medicare beneficiaries differ considerably from those of people whose primary source of coverage is private health insurance. People generally qualify for Medicare if they or a spouse have sufficient lifetime work history and either are age sixty-five or older or have been permanently and totally disabled for two years or more. In contrast, people with private health insurance obtain coverage because they or a family member work for an employer that provides coverage; are eligible for early retiree coverage through an employer; maintain Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) coverage through a former employer, or purchase health insurance through the individual market.14 Medicare beneficiaries age sixty-five or older are more likely than people with employer insurance to have health problems, low incomes, or both (Exhibit 1). Twenty-nine percent of this Medicare group rated their health as fair or poor, compared to 11 percent of the employer group. Nineteen percent of Medicare beneficiaries age sixty-five or older had incomes below $20,000, compared to 9 percent of adults with employerbased coverage. Not surprisingly, Medicaid A ugus t 201 2
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Web First Exhibit 1 Characteristics Of The Study Population, By Insurance Status, 2010 Type of insurance
Characteristic Estimated millions of US adults Unweighted n
Total
All Medicare, elderly
Traditional Medicare, elderly
Medicare Advantage, elderly
Employer insurance
Individual
Medicare, disabled
Medicaid
None
222.1 3,973
35.6 880
22.3 561
8.4 188
104.2 1,669
8.8 160
9.9 208
15.1 273
37.6 602
Sex Male Female
48% 52
41%a 59a
44% 56
34% 66
50% 50
47% 53
53% 47
39%a 61a
49% 51
Race/ethnicity White Black Hispanic
74 12 14
85 8 7b
89 7 5
83 10 7c
81 10 9
85b 6b 9
62a 25a 13
62a 25a 13a
46a 22e 32a
Self-rated health status Excellent/very good 49 Good 29 Fair/poor 22
41a 30 29a
43 29 28
39 30 31
59 29 11
68b 20b 12
19a 23 56a
30a 32 38a
37a 29 34a
Number of chronic conditionsd None 60 One 25 Two or more 15
28a 39a 32a
29 39 32
29 37 34
70 22 8
79b 16b 5
32a 28 40a
54a 24 22a
67 21 12e
19a 24b 19 15a 23a
18 25 19 16 23
19 28 24 13 16
9 19 19 44 9
20a 15 18 35e 12b
56a 21 4a 3a 16e
62a 18 3a 4a 12b
52a 24e 7a 4a 13a
Poverty status (percent of federal poverty level) 15 Less than 133% 26 16a 133%–249% 18 18 17 250%–399% 20 25b 25 400% or more 24 18a 20 Missing 13 23a 23
15 23 29 17 16
10 17 26 37 9
19e 14 25 30b 12b
53a 19 7a 4a 16e
67a 15 4a 2a 12b
52a 23a 8a 4a 13a
Annual income
