Medigap Regulation: Lessons for Health Care Reform

Fox, Peter D.; Rice, Thomas; Alecxih, Lisa

doi:10.1215/03616878-20-1-31

Cited by 14 publications

(13 citation statements)

References 2 publications

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“…When the benefits to be included in the model Medigap plans were being debated by the National Association of Insurance Commissioners (NAIC), there was considerable concern over adverse risk selection if drug benefits were added. 4 In fact, the premiums for these plans tend to be much higher than those for other Medigap plans, and research has shown that insurance carriers are setting premium rates to account for the presence of adverse selection among plans with drug coverage. 5 Access to the remaining sources of coverage depends largely on a person's employment status and income, as well as geographic location.…”

mentioning

confidence: 99%

Prescription Drug Coverage, Utilization, And Spending Among Medicare Beneficiaries

et al. 1999

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Outpatient prescription drugs are not a covered benefit under Medicare. There have been proposals in the past to expand Medicare benefits to include drug coverage, and current discussions dealing with "modernizing" the Medicare benefit package have raised the issue again. Using data from the 1995 Medicare Current Beneficiary Survey (MCBS), we describe the sources and extent of drug coverage among Medicare beneficiaries. The data show that 65 percent of Medicare beneficiaries have some level of drug coverage-a figure much higher than previous published numbers-and that 95 percent of Medicare health maintenance organization (HMO) enrollees have drug coverage. The data provide a baseline to observe future changes in the level of coverage, particularly among Medicare managed care plans.

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mentioning

confidence: 99%

Prescription Drug Coverage, Utilization, And Spending Among Medicare Beneficiaries

et al. 1999

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“…Unlike the Baucus Amendment, the OBRA-90 reforms were mandatory (Fox, Rice, and Alecxih 1995). OBRA-90 changed the industry in several significant ways.…”

Section: Legislative Initiativesmentioning

confidence: 99%

“…OBRA-90 also established consumer counseling programs, increased loss ratio requirements, prevented the sale of duplicate policies (by requiring a written statement from the consumer about existing policies), limited agents' commissions, and required a 6-month open-enrollment period (Rice and Thomas 1992;Short and Vistnes 1992;Fox, Rice, and Alecxih 1995).…”

Section: Legislative Initiativesmentioning

confidence: 99%

“…The range of premiums offered by different insurers for the 10 plans narrowed significantly from 1991 to 1993, suggesting that the changes have increased ease of comparison between insurers and forced competitive pricing (Rice, Graham, and Fox 1997). The simplification has also dramatically lowered the search costs for beneficiaries seeking coverage and increased consumers' ability to understand and evaluate different supplemental insurance policies (Fox, Rice, and Alecxih 1995;McCormack et al 1996;Rice and Thomas 1992). Prior to OBRA-90 it was suggested that it was virtually impossible for most beneficiaries to assess the multiple options and make optimal choices because of the sheer number of choices (Firman 1985;Sofaer and Davidson 1990).…”

Section: Legislative Initiativesmentioning

confidence: 99%

“…These individuals use their knowledge to pick an optimal insurance package. Long (1994), Fox, Rice, and Alecxih (1995), McCormack et al (1996), and Atherly (1998) all found evidence of adverse selection into supplemental insurance policies which included any type of pharmaceutical benefit. The American Association of Retired Persons only experience rates policies with prescription drug benefits, and community rates all other supplemental policies (due to adverse selection concerns).…”

Section: Atherly / Medicare's Accidental Stepchildmentioning

confidence: 99%

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Supplemental Insurance: Medicare’s Accidental Stepchild

Atherly

2001

Med Care Res Rev

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The majority of Medicare beneficiaries supplement the basic Medicare benefit package with additional insurance. This article reviews the literature on Medicare supplemental insurance. Supplemental insurance plays a significant role in protecting Medicare beneficiaries from financial risk. The two major sources of coverage for beneficiaries--former employers and individual purchase--differ in benefit structure and characteristics of policy holders. Employer-sponsored policies tend to provide broader coverage with more cost sharing than individually purchased policies, and holders of employer policies tend to be younger, wealthier, healthier, and better educated. Supplemental insurance policies have been shown to be associated with higher Medicare expenditures, but there is no consensus on the cause of the higher expenditures. Some studies attribute the increase to adverse selection of policies; other studies point to the moral hazard effect of insurance.

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Atherly

2002

International Journal of Health Care Finance and Economics

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This study estimated the effect of Medicare supplemental insurance plans on Medicare expenditures, controlling for unobserved selection. For employer-sponsored policies, there was significant unobserved favorable selection into plans with and without prescription drug coverage. For individual plans, there was unobserved adverse selection into plans with drug benefits and unobserved favorable selection into plans without. Individual supplemental plans without prescription drugs increased Medicare expenditures by $914 annually, while those with drugs increased Medicare expenditures by $491. Employer policies also significantly increased Medicare expenditures ($207 without drug coverage and $447 with drug coverage), but the increase was less than that associated with individual policies.

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Medigap Regulation: Lessons for Health Care Reform

Cited by 14 publications

References 2 publications

Prescription Drug Coverage, Utilization, And Spending Among Medicare Beneficiaries

Prescription Drug Coverage, Utilization, And Spending Among Medicare Beneficiaries

Supplemental Insurance: Medicare’s Accidental Stepchild

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